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<SEC-DOCUMENT>0001085037-05-000525.txt : 20050427
<SEC-HEADER>0001085037-05-000525.hdr.sgml : 20050427
<ACCEPTANCE-DATETIME>20050426204624
ACCESSION NUMBER:		0001085037-05-000525
CONFORMED SUBMISSION TYPE:	SB-2
PUBLIC DOCUMENT COUNT:		21
FILED AS OF DATE:		20050427
DATE AS OF CHANGE:		20050426

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PLURISTEM LIFE SYSTEMS INC
		CENTRAL INDEX KEY:			0001158780
		STANDARD INDUSTRIAL CLASSIFICATION:	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
		IRS NUMBER:				980351734
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		SB-2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-124346
		FILM NUMBER:		05774439

	BUSINESS ADDRESS:	
		STREET 1:		MATAM ADVANCED TECHNOLOGY PARK
		STREET 2:		BUILDING NO. 20
		CITY:			HAIFA
		STATE:			L3
		ZIP:			31905
		BUSINESS PHONE:		972-4-850-1080

	MAIL ADDRESS:	
		STREET 1:		MATAM ADVANCED TECHNOLOGY PARK
		STREET 2:		BUILDING NO. 20
		CITY:			HAIFA
		STATE:			L3
		ZIP:			31905

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AI SOFTWARE INC
		DATE OF NAME CHANGE:	20010906
</SEC-HEADER>
<DOCUMENT>
<TYPE>SB-2
<SEQUENCE>1
<FILENAME>formsb2.htm
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>UNITED STATES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Washington, D.C.  20549</font></b></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:center;'><font face="Arial"><b><font SIZE=2>FORM SB-2</font></b></font></p>


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            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><b><font SIZE=2>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</font></b></p>
<p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="638" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:2.0pt;text-align:center; line-height:normal'><font size=2>(Name of small business issuer in its charter)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="210" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:23.15pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><b><font size=2>Nevada</font></b></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:23.15pt'>
            <p  align=center style='margin-top:1.0pt;text-align:center; line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="198" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:23.15pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><b><font size=2>2836</font></b><b></b></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:23.15pt'>
            <p  align=center style='margin-top:1.0pt;text-align:center; line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="180" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:23.15pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><b><font size=2>98-0351734</font></b><b></b></p> </td> </tr>
    <tr style='height:23.15pt'>
        <td width="210" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:23.15pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal'><font size=2>State or jurisdiction of</font><br> <font size=2>incorporation or organization</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:23.15pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="198" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:23.15pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal'><font size=2>(Primary Standard Industrial Classification Code Number)</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:23.15pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal'><font size=1>&nbsp;</font></p> </td>
        <td width="180" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:23.15pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal'><font size=2>(I.R.S. Employer </font><br> <font size=2>Identification No.)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p  align=center style='margin-top:0in;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>MATAM Advanced Technology Park, Building No. 20, Haifa, Israel     31905</font></p>
<p  align=center style='margin-top:0in;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>011-972-4-850-1080</font></p> </td> </tr>
    <tr>
        <td width="638" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:2.0pt;text-align:center; line-height:normal'><font size=2>(Address and telephone number of principal executive offices)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p  align=center style='margin-top:0in;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>MATAM Advanced Technology Park, Building No. 20, Haifa, Israel  31905</font></p>
<p  align=center style='margin-top:0in;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>011-972-4-850-1080</font></p> </td> </tr>
    <tr>
        <td width="638" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:2.0pt;text-align:center; line-height:normal'><font size=2>(Address of principal place of business or intended principal place of business)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Dr. Shai Meretzki &#150; Chief Executive Officer</font><br> <font size=2>c/o The Nevada Agency and Trust Company</font><br> <font size=2>Suite 880 &#150; Bank of America Plaza</font><br> <font size=2>50 West Liberty Street</font><br> <font size=2>Reno, Nevada  89501</font><b><i></i></b></p> </td> </tr>
    <tr>
        <td width="638" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:2.0pt;text-align:center; line-height:normal'><font size=2>(Name, address and telephone number of agent for service)</font></p>
<p  align=center style='margin-top:2.0pt;text-align:center; line-height:normal'><font size=2>&nbsp;</font></p>
<p  align=center style='margin-top:2.0pt;text-align:center; line-height:normal'><font size=2>Copy of communications to:</font></p>
<p  align=center style='margin-top:2.0pt;text-align:center; line-height:normal'><font size=2>Bernard Pinsky, Esq.</font><br> <font size=2>Clark, Wilson</font><br> <font size=2>Suite 800 - 885 West Georgia Street</font><br> <font size=2>Vancouver, British Columbia, Canada  V6C 3H1</font><br> <font size=2>Telephone:  604.687.5700</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Approximate date of proposed sale to the public:&nbsp;&nbsp;From time to time after the effective date of this registration statement.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;[   ]</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;[   ]</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 2 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;[   ]</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="613" style=' border-collapse:collapse'>
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        <td width="589" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.&nbsp;&nbsp;[  </font></p> </td>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>]</font></p> </td> </tr></table>

<p style=' margin-bottom:6pt; margin-top:18pt;text-align:center;'><b><font SIZE=2>CALCULATION OF REGISTRATION FEE</font></b></p>


<table border="1" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
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        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; page-break-after:avoid'><font size=2>Title of each</font><br> <font size=2>class of securities</font><br> <font size=2>to be registered</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><br> <font size=2>Amount to be registered</font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>Proposed maximum</font><br> <font size=2>offering price</font><br> <font size=2>per share</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>Proposed maximum</font><br> <font size=2>aggregate offering</font><br> <font size=2>price</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><br> <font size=2>Amount of</font><br> <font size=2>registration fee</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by certain selling security holders</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>8,500,000</font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.22</font><sup><font size=2>(13)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$1,870,000</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$220.10</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by certain selling security holders upon exercise of share purchase warrants</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>8,500,000</font><sup><font size=2>(3)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.30</font><sup><font size=2>(14)</font></sup><b><i></i></b></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$2,550,000</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$300.13</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by a selling security holder upon exercise of share purchase warrants</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>245,000</font><sup><font size=2>(4)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.10</font><sup><font size=2>(14)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$24,500</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$2.88</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by certain selling security holders</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>12,000,000</font><sup><font size=2>(5)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.22</font><sup><font size=2>(13)</font></sup><b><i></i></b></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$2,640,000</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$310.73</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by certain selling security holders upon exercise of share purchase warrants</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>12,000,000</font><sup><font size=2>(6)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.30</font><sup><font size=2>(14)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$3,600,000</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$423.72</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by certain selling security holders</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>1,845,000</font><sup><font size=2>(7)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.22</font><sup><font size=2>(13)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$405,900</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$47.77</font></p>
<p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by certain selling security holders upon exercise of share purchase warrants</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>475,000</font><sup><font size=2>(8)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$2.50</font><sup><font size=2>(14)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$1,187,500</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$139.77</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 3 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="1" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by certain selling security holders</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>12,000,000</font><sup><font size=2>(9)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.22 </font><sup><font size=2>(13)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$2,640,000</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$310.73</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by certain other selling security holders upon exercise of share purchase warrants</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>12,000,000</font><sup><font size=2>(10)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.30</font><sup><font size=2>(14)</font></sup><b><i></i></b></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$3,600,000</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$423.72</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by a selling security holder upon exercise of share purchase warrants</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>600,000</font><sup><font size=2>(11)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.10</font><sup><font size=2>(14)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$60,000</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$7.06</font></p> </td> </tr>
    <tr style='height:46.3pt'>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Common Stock to be offered for resale by a selling security holder upon exercise of share purchase warrants</font></p> </td>
        <td width="116" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>2,400,000</font><sup><font size=2>(12)</font></sup></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$0.30</font><sup><font size=2>(14)</font></sup><b><i></i></b></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$720,000</font></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:46.3pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$84.74</font></p> </td> </tr>
    <tr>
        <td width="139" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 6.0pt;margin-left:0in;line-height:normal'><font size=2>Total Registration Fee</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '>&nbsp;<b></b></p> </td>
        <td width="128" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:6.0pt;margin-left:0in;text-align:center;line-height:normal; '><font size=2>$2,271.35</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(1)&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Rule 416 under the Securities Act, as amended, this registration statement also covers such indeterminate number of additional shares of common stock as may be issuable to our selling security holders to prevent dilution resulting from stock splits, stock dividends or similar transactions.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(2)&nbsp;&nbsp;&nbsp;&nbsp;Represents the 8,500,000 shares of our common stock that were sold to certain selling security holders pursuant to the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated October 25, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(3)&nbsp;&nbsp;&nbsp;&nbsp;Represents the 8,500,000 shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated October 25, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(4)&nbsp;&nbsp;&nbsp;&nbsp;Represents the 245,000 shares of our common stock that are issuable to certain security holders upon exercise of warrants issued to the security holders as consideration for services provided as placement agents. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(5)&nbsp;&nbsp;&nbsp;&nbsp;Represents the 12,000,000 shares of our common stock that were sold to certain selling security holders pursuant to the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated January 24, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(6)&nbsp;&nbsp;&nbsp;&nbsp;Represents the 12,000,000 shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated January 24, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(7)&nbsp;&nbsp;&nbsp;&nbsp;Represents the 1,845,000 shares of our common stock that were issued to a security holder as consideration for services provided as a placement agent. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 4 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(8)&nbsp;&nbsp;&nbsp;&nbsp;Represents part of the 475,000 shares of our common stock that are issuable to certain security holders upon exercise of warrants issued to the security holders as consideration for services provided as placement agents.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(9)&nbsp;&nbsp;&nbsp;&nbsp;Represents the 12,000,000 shares of our common stock that were sold to certain selling security holders pursuant to the Private Placement Subscription Agreements entered into between the selling security holders and our company dated January 31, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(10)&nbsp;&nbsp;Represents the 12,000,000 shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Private Placement Subscription Agreements entered into between the selling security holders and our company dated January 31, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(11)&nbsp;&nbsp;Represents the 600,000 shares of our common stock that are issuable to a security holder upon exercise of warrants issued to the security holder as consideration for services provided as a placement agent.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(12)&nbsp;&nbsp;Represents the 2,400,000 shares of our common stock that are issuable to our Chief Executive Officer, Dr. Shai Meretzki, upon exercise of warrants issued to him in connection with the issuance of a Notice of Allowance by the United States Patent Office for our patent application number 09/890,401.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(13)&nbsp;&nbsp; Fee calculated in accordance with Rule 457(c) of the Securities Act.  Estimated for the sole purpose of calculating the registration fee.  We have based the fee calculation on the average of the last reported bid and ask price for our common stock on the National Association of Securities Dealers OTC Bulletin Board on April 18, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>(14)&nbsp;&nbsp;Pursuant to Rule 457(c) and (g), the proposed maximum offering price per share is based on the exercise price therefor on the date hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font SIZE=2>THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON THE DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>PROSPECTUS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:5in;text-align:right;'><b><font size=2>Subject to Completion</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:5in;text-align:right;'><b><font size=2>________________, 2005</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>A NEVADA CORPORATION</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>SHARES OF COMMON STOCK OF PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>This prospectus relates to the resale by certain selling security holders of Pluristem Life Systems, Inc. of up to 70,565,000 shares of our common stock.  The selling security holders may offer to sell the shares of common stock being offered in this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We will not receive any proceeds from the resale of shares of our common stock by the selling security holders. We will, however, receive proceeds upon exercise of the share purchase warrants and these proceeds will be used for general working capital purposes.  We will pay for expenses of this offering.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Each of the selling security holders may be deemed to be an &#147;underwriter,&#148; as such term is defined in the Securities Act.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our common stock is traded on the National Association of Securities Dealers OTC Bulletin Board under the symbol "PLRS".  On April 18, 2005, the closing bid price of our common stock was $0.22 on the OTC Bulletin Board.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Our business is subject to many risks and an investment in our common stock will also involve a high degree of risk.  You should invest in our common stock only if you can afford to lose your entire investment.  You should carefully consider the various Risk Factors described beginning on page 11 before investing in our common stock.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.  Any representation to the contrary is a criminal offense.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The information in this prospectus is not complete and may be changed.  The selling security holders may not sell or offer these securities until this registration statement filed with the Securities and Exchange Commission is effective.  This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The date of this prospectus is _________________, 2005.</font>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 6-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>The following table of contents has been designed to help you find important information contained in this prospectus.  We encourage you to read the entire prospectus.</font></p>

<p style=' margin-bottom:6pt; margin-top:12pt;text-align:center;'><b><font SIZE=2>TABLE OF CONTENTS</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="630" style=' margin-left:5.4pt;border-collapse:collapse'>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'>&nbsp;<b></b></p>  </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center;  line-height:normal'><font SIZE=2>PAGE NUMBER</font></p>  </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>PROSPECTUS SUMMARY</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>8</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>RISK FACTORS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>11</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>RISKS RELATED TO OUR BUSINESS AND COMPANY</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>11</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>We have not earned any revenues since our incorporation and only have a limited operating history in our current business of developing and commercializing stem cell expansion technology, which raise doubt about our ability to continue as a going concern</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>11</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>Our likelihood of profit depends on our ability to develop and commercialize our stem cell expansion technology, which is currently in the development stage.  If we are unable to complete the development and commercialization of our stem cell expansion technology successfully, our likelihood of profit will be limited severely.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>11</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>If we encounter problems or delays in the research and development of our PluriX&#153; Bioreactor system, we may not be able to raise sufficient capital to finance our operation during the period required to resolve the problems or delays.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>11</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>We need to raise additional financing to support the research and development of our PluriX&#153; Bioreactor system in the future but we cannot be sure we will be able to obtain additional financing on terms favourable to us when needed.  If we are unable to obtain additional financing to meet our needs, our operations may be adversely affected or terminated.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>12</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>If we fail to obtain and maintain required regulatory approvals for our PluriX&#153; Bioreactor system, our ability to commercialize our PluriX&#153; Bioreactor system will be limited severely</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>12</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>Even if we obtain regulatory approvals to commercialize our technology, we may encounter a lack of commercial acceptance of our PluriX&#153; Bioreactor system, which would impair the profitability of our business</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>13</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>If we do not keep pace with our competitors and with technological and market changes, our technology may become obsolete and our business may suffer.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>13</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>We depend to a significant extent on certain key personnel, the loss of any of whom may materially and adversely affect our company.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>13</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>Our success depends in large part on our ability to develop and protect our PluriX&#153; Bioreactor system technology.  If our patents and proprietary right agreements do not provide sufficient protection for our PluriX&#153; Bioreactor system technology, our business and competitive position will suffer.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>14</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>We may be subject to intellectual property litigation such as patent infringement claims, which could adversely affect our business.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>14</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>Potential product liability claims could adversely affect our future earnings and financial condition.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>14</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font size=2>Our principal research and development facilities are located in Israel and the unstable military and political conditions of Israel may cause interruption or suspension of our business operations without warning</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>14</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>Because some of our officers and directors are located in non-U.S. jurisdictions, you may have no effective recourse against the management for misconduct and may not be able to enforce judgement and civil liabilities against our officers, directors, experts and agents.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>15</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 7-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="630" style=' margin-left:5.4pt;border-collapse:collapse'>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>Because we do not intend to pay any dividends on our common stock, investors seeking dividend income or liquidity should not purchase shares of our common stock.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>15</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><i><font size=2>Our stock is considered a &#147;penny stock&#148; and certain securities rules may hamper the tradability of our shares in the market.</font></i></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>15</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>FORWARD-LOOKING STATEMENTS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>15</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>15</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>THE OFFERING</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>16</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>USE OF PROCEEDS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>17</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DETERMINATION OF OFFERING PRICE</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>17</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>SELLING SECURITY HOLDERS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>17</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>PLAN OF DISTRIBUTION</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>21</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DESCRIPTION OF THE AGREEMENTS WITH CERTAIN SELLING SECURITY HOLDERS IN THE OCTOBER 25, 2004 PRIVATE PLACEMENT</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>22</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DESCRIPTION OF THE AGREEMENTS WITH CERTAIN SELLING SECURITY HOLDERS IN THE JANUARY 24, 2005 PRIVATE PLACEMENT</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>23</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DESCRIPTION OF THE AGREEMENTS WITH CERTAIN SELLING SECURITY HOLDERS IN THE JANUARY 31, 2005 PRIVATE PLACEMENT</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>24</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>LEGAL PROCEEDINGS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>26</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>26</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>28</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DESCRIPTION OF SECURITIES</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>30</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>30</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>30</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DESCRIPTION OF BUSINESS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>30</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>PLAN OF OPERATION</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>43</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DESCRIPTION OF PROPERTY</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>48</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>MARKET FOR COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>48</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>DIVIDEND POLICY</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>50</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>EXECUTIVE COMPENSATION</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>50</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>REPORTS TO SECURITY HOLDERS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>53</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>FINANCIAL STATEMENTS</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>53</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>54</font></p> </td> </tr>
    <tr>
        <td width="498" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:5.0pt;line-height:normal'><font SIZE=2>WHERE YOU CAN FIND MORE INFORMATION</font></p> </td>
        <td width="132" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:5.0pt;text-align:center; line-height:normal'><font size=2>54</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 8-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>As used in this prospectus, the terms "we", "us", "our", and "Pluristem" mean Pluristem Life Systems, Inc., unless otherwise indicated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>All dollar amounts refer to US dollars unless otherwise indicated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>PROSPECTUS SUMMARY</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>THIS IS ONLY A SUMMARY AND DOES NOT CONTAIN ALL OF THE INFORMATION THAT MAY BE IMPORTANT TO YOU.  YOU SHOULD READ THE ENTIRE PROSPECTUS, ESPECIALLY &#147;RISK FACTORS&#148; AND OUR FINANCIAL STATEMENTS AND THE RELATED NOTES INCLUDED IN THIS PROSPECTUS, BEFORE DECIDING TO INVEST IN SHARES OF OUR COMMON STOCK.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>Our Business</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We are a company engaging in the research and commercialization of an exclusive technology to expand stem cells outside of the human body.  Stem cells are unspecialized cells that renew themselves for long periods through cell division.  Scientists have developed sufficient fundamental understanding to use stem cells for bone marrow transplants and other methods of cell therapy.  However, generally there are not sufficient stem cells available to carry out transplants and other operations on adults.  Our technology grows stem cells for potential use in combating fatal disease.  We acquired our exclusive technology under a License Agreement with the Weizmann Institute of Science and the Technion-Israel Institute of Technology.  We intend to improve this technology platform and develop it into a functional stem cell expansion system that we can sell or license to other research laboratories, umbilical cord
blood banks, or clinics in the future.  We have decided to name this system the PluriX&#153; bioreactor system. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Currently, we are in the research and developmental stage of our PluriX&#153; bioreactor system and have not begun the process of seeking regulatory approval for marketing our PluriX&#153; bioreactor system in any jurisdiction.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our principal executive office is at MATAM Advanced Technology Park, Building No. 20, Haifa, Israel.  Our telephone number is 011-972-4-850-1080.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We were incorporated in the State of Nevada under the name A.I. Software, Inc. on May 11, 2001.  We were not successful in implementing our initial business plan of developing an artificial intelligence software called &#147;Randomix&#148;.  In March and April of 2003, our board of directors decided to pursue initiatives in the biotechnology industry as an extension of our business.  In May of 2003, we acquired our exclusive technology under a License Agreement with the Weizmann Institute of Science and the Technion-Israel Institute of Technology.  On June 10, 2003, we acquired all of the issued and outstanding shares of a research and development company called Pluristem, Ltd. so we would have the capacity to conduct further research and development of our exclusive technology.  On June 25, 2003, we changed our name to Pluristem Life Systems, Inc. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>Number of Shares Being Offered</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>This prospectus relates to the resale by certain selling security holders of Pluristem Life Systems, Inc. of up to 70,565,000 shares of our common stock in connection with the resale of:</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.25in; border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 8,500,000 shares of our common stock, representing those shares of our common stock that were sold to certain selling security holders pursuant to the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated October 25, 2004 &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 8,500,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Common Stock </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 9-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>and Warrant Purchase Agreements entered into between the selling security holders and our company dated October 25, 2004 - see &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement&#148;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.25in; border-collapse:collapse'>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 245,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued as consideration for services provided as placement agents - see &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 12,000,000 shares of our common stock, representing those shares of our common stock that were sold to certain selling security holders pursuant to the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated January 24, 2005 &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 12,000,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated January 24, 2005 - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 1,845,000 shares of our common stock, representing those shares of our common stock that were issued to a security holder as consideration for services provided as a placement agent - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 475,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued as consideration for services provided as placement agents - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 12,000,000 shares of our common stock, representing those shares of our common stock that were sold to certain selling security holders pursuant to the Private Placement Subscription Agreements entered into between the selling security holders and our company dated January 31, 2005 &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 12,000,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Private Placement Subscription Agreements entered into between the selling security holders and our company dated January 31, 2005 - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement&#148; and</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 600,000 shares of our common stock, representing those shares of our common stock that are issuable to a security holder upon exercise of warrants issued as consideration for services provided as a placement agent - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 2,400,000 shares of our common stock, representing those shares of our common stock that are issuable to our Chief Executive Officer, Dr. Shai Meretzki, upon exercise of warrants issued to him in connection with the issuance of a Notice of Allowance by the United States Patent Office for our patent application number 09/890,401.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The selling security holders may sell the shares of common stock in the public market or through privately negotiated transactions or otherwise.  The selling shareholders may sell these shares of common stock through </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 10-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>ordinary brokerage transactions, directly to market makers or through any other means described in the section entitled &#147;Plan of Distribution&#148;.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>Number of Shares Outstanding</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>There were 63,603,483 shares of our common stock issued and outstanding as at April 25, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>Use of Proceeds</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We will not receive any of the proceeds from the sale of the shares of our common stock being offered for sale by the selling security holders.  We will, however, receive proceeds upon exercise of the share purchase warrants and these proceeds will be used for general working capital purposes.  We will incur all costs associated with this registration statement and prospectus.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>Summary of Financial Data</font></p>

<p style=' margin-bottom:12pt; margin-top:18pt;text-align:left;'><font size=2>The summarized financial data presented below is derived from and should be read in conjunction with our audited consolidated financial statements for the years ended June 30, 2004 and June 30, 2003, and our unaudited consolidated financial statements for the six-month period ended December 31, 2004, (in each case including the notes to those financial statements) which are included elsewhere in this prospectus along with the section entitled "Plan of Operation" beginning on page 43 of this prospectus. </font></p>


<table border="1" cellspacing=0 cellpadding=0 width="575" style=' border-collapse:collapse'>
    <tr>
        <td width="265" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'>&nbsp;<b></b></p> </td>
        <td width="135" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><b><font size=2>For the 6-month</font></b><br> <b><font size=2>period ended </font></b><br> <b><font size=2>December 31, 2004</font></b><br> <b><font size=2>(unaudited)</font></b><b></b></p> </td>
        <td width="142" valign=top style='background:#E5E5E5;padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><b><font size=2>For the 6-month</font></b><br> <b><font size=2>period ended</font></b><br> <b><font size=2>December 31, 2003</font></b><br> <b><font size=2>(unaudited)</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Revenue</font></p> </td>
        <td width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td> </tr>
    <tr>
        <td width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Net Loss for the Period</font></p> </td>
        <td width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$708,955</font></p> </td>
        <td width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$693,084</font></p> </td> </tr>
    <tr>
        <td width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Net loss Per Share- basic and diluted</font></p> </td>
        <td width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$0.03</font></p> </td>
        <td width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$0.03</font></p> </td> </tr>
    <tr>
        <td width="265" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td>
        <td width="135" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><b><font size=2>As at</font></b><br> <b><font size=2>December 31, 2004</font></b><br> <b><font size=2>(unaudited)</font></b><b></b></p> </td>
        <td width="142" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><b><font size=2>As at</font></b><br> <b><font size=2>December 31, 2003</font></b><br> <b><font size=2>(unaudited)</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Working Capital (Deficiency)</font></p> </td>
        <td width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>$(117,737)</font></p> </td>
        <td width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>$(190,701)</font></p> </td> </tr>
    <tr>
        <td width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Total Assets</font></p> </td>
        <td width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>$860,190</font></p> </td>
        <td width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>$610,339</font></p> </td> </tr>
    <tr>
        <td width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after: avoid;margin-bottom:0.5pt'><font size=2>Total Share Capital</font></p> </td>
        <td width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$3,355,920</font></p> </td>
        <td width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$1,333,610</font></p> </td> </tr>
    <tr>
        <td width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after: avoid;margin-bottom:0.5pt'><font size=2>Accumulated deficit</font></p> </td>
        <td width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$(3,260,203)</font></p> </td>
        <td width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$(1,233,982)</font></p> </td> </tr>
    <tr>
        <td width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after: avoid;margin-bottom:0.5pt'><font size=2>Total Stockholders' Equity (Deficiency)</font></p> </td>
        <td width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$95,717</font></p> </td>
        <td width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$99,628</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="1" cellspacing=0 cellpadding=0 width="575" style=' border-collapse:collapse'>
    <tr >
        <td  width="265" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'>&nbsp;<b></b></p> </td>
        <td width="135" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><br> <b><font size=2>For the year ended</font></b><br> <b><font size=2>June 30, 2004</font></b><b></b></p> </td>
        <td  width="142" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><b><font size=2>For the year ended</font></b><br> <b><font size=2>June 30, 2003</font></b><b></b></p> </td> </tr>
    <tr >
        <td  width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Revenue</font></p> </td>
        <td  width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td  width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td> </tr>

    <tr >
        <td  width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Net Loss for the Period</font></p> </td>
        <td  width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$2,010,350</font></p> </td>
        <td  width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$462,995</font></p> </td> </tr>

    <tr >
        <td  width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Net loss Per Share - basic and diluted</font></p> </td>
        <td  width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$0.083</font></p> </td>
        <td  width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$0.01</font></p> </td> </tr>


    <tr>
        <td width="33" ></td>

        <td width="255" ></td>

        <td width="33" ></td>

        <td width="116" ></td>

        <td width="32" ></td>

        <td width="121" ></td>

        <td width="33" ></td> </tr> </table>




<table border="1" cellspacing=0 cellpadding=0 width="575" style=' border-collapse:collapse'>
    <tr >
        <td  width="265" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'>&nbsp;<b></b></p> </td>
        <td  width="135" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><br> <b><font size=2>For the year ended</font></b><br> <b><font size=2>June 30, 2004</font></b><b></b></p> </td>
        <td  width="142" valign=bottom style='background:#E5E5E5; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:0in;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><b><font size=2>For the year ended</font></b><br> <b><font size=2>June 30, 2003</font></b><b></b></p> </td>
 </tr>
    <tr >
        <td  width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Working Capital (Deficiency)</font></p> </td>
        <td  width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>$349,496</font></p> </td>
        <td  width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>$261,619</font></p> </td>
 </tr>
    <tr >
        <td  width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Total Assets</font></p> </td>
        <td  width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$1,377,198</font></p> </td>
        <td  width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$994,594</font></p> </td>
</tr>
    <tr >
        <td  width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Total Share Capital</font></p> </td>
        <td  width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$2,908,258</font></p> </td>
        <td  width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$1,031,315</font></p> </td> </tr>
    <tr >
        <td  width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Accumulated Deficit</font></p> </td>
        <td  width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$(2,551,248)</font></p> </td>
        <td  width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$(540,898)</font></p> </td> </tr>

    <tr >
        <td  width="265" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Total Stockholders' Equity</font></p> </td>
        <td  width="135" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$357,010</font></p> </td>
        <td  width="142" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:.05in; margin-bottom:0.5pt;margin-left:0in;text-align:center; line-height:normal'><font size=2>$490,417</font></p> </td>  </tr>

    <tr>
        <td width="33" ></td>

        <td width="255" ></td>

        <td width="33" ></td>

        <td width="116" ></td>

        <td width="32" ></td>

        <td width="121" ></td>

        <td width="33" ></td> </tr> </table>


<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>RISK FACTORS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>An investment in our common stock involves a number of very significant risks.  You should carefully consider the following risks and uncertainties in addition to other information in this prospectus in evaluating our company and our business before purchasing shares of common stock.  Our business, operating results and financial condition could be seriously harmed due to any of the following risks.  The risks described below are not the only ones facing our company.  Additional risks not presently known to us may also impair our business operations.  You could lose all or part of your investment due to any of these risks.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>RISKS RELATED TO OUR BUSINESS AND COMPANY</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>We have not earned any revenues since our incorporation and only have a limited operating history in our current business of developing and commercializing stem cell expansion technology, which raise doubt about our ability to continue as a going concern.</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our company has a limited operating history in our current business of developing and commercializing stem cell expansion technology and must be considered in the development stage.  We were incorporated on May 11, 2001 with a business plan to develop an artificial intelligence software called Randomix.  We were not successful in implementing our original business plan in regard to our Randomix software and as a result we decided in April of 2003 to pursue initiatives in the biotechnology industry as an extension to our business.  In May of 2003 we entered into a license agreement with the Weizmann Institute of Science and the Technion-Israel Institute of Technology to acquire an exclusive license for a stem cell expansion technology.  In June of 2003, we acquired our wholly-owned subsidiary, Pluristem, Ltd., based in Israel to conduct further research and development of the exclusive stem cell expansion
technology licensed to us.    </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We have not generated any revenues since our inception and we will, in all likelihood, continue to incur operating expenses without significant revenues until we successfully develop and commercialise our stem cell expansion technology.  Our primary source of funds has been the sale of our common stock.  We cannot assure that we will be able to generate any significant revenues or income.  These circumstances make us dependent on additional financial support until profitability is achieved.  There is no assurance that we will ever be profitable, and we had a going concern note as described in an explanatory paragraph to our consolidated financial statements for the year ended June 30, 2004. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Our likelihood of profit depends on our ability to develop and commercialize our stem cell expansion technology, which is currently in the development stage.  If we are unable to complete the development and commercialization of our stem cell expansion technology successfully, our likelihood of profit will be limited severely. </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We are engaged in the business of developing and commercializing a technology and proposed device called the PluriX&#153; Bioreactor system.  The proposed function of our PluriX&#153; Bioreactor system is to allow researchers and physicians to expand hematopoietic stem cells outside of the human body without differentiation so they may use in bone marrow transplants and other methods of cell therapy.  Our PluriX&#153; Bioreactor system is in the development stage and we have not begun the regulatory approval process for our PluriX&#153; Bioreactor system.  We have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the short or medium term.  Any profitability in the future from our business will be dependent upon successful commercialization of our PluriX&#153; Bioreactor system, which will require significant additional research and development
as well as substantial clinical trials.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 12-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>If we encounter problems or delays in the research and development of our PluriX&#153; Bioreactor system, we may not be able to raise sufficient capital to finance our operation during the period required to resolve the problems or delays.   </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our PluriX&#153; Bioreactor system is currently in the development stage and we anticipate that we will continue to incur operating expenses without significant revenues until we have successfully completed all necessary research and clinical trials.  We, and any of our potential collaborators, may encounter problems and delays relating to research and development, regulatory approval and intellectual property rights of our technology.  Our research and development programs may not be successful, and our cell culture technology may not facilitate the production of cells outside the human body with the expected result.  Our PluriX&#153; Bioreactor system may not prove to be safe and efficacious in clinical trials.  If any of these events occur, we may not have adequate resources to continue operations for the period required to resolve the issue delaying commercialization and we may not be able to raise
capital to finance our continued operation during the period required for resolution of that issue.  Accordingly, we may be forced to discontinue or suspend our operations. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>We need to raise additional financing to support the research and development of our PluriX&#153; Bioreactor system in the future but we cannot be sure we will be able to obtain additional financing on terms favourable to us when needed.  If we are unable to obtain additional financing to meet our needs, our operations may be adversely affected or terminated.  </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We raised proceeds of approximately $3,250,000 in three private placement offerings of our securities in October of 2004 and January of 2005 to support the development and commercialization of our PluriX&#153; Bioreactor system.  These funds are expected to fund operations until early summer of 2006.  Our ability to continue to develop and commercialize the PluriX&#153; Bioreactor system is dependent upon our ability to raise significant additional financing when needed.  If we are unable to obtain such financing, we will not be able to fully develop and commercialize our technology.  Our future capital requirements will depend upon many factors, including: </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="621" style=' border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>continued scientific progress in our research and development programs;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>costs and timing of conducting clinical trials and seeking regulatory approvals and patent prosecutions;</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td width="297" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>competing technological and market developments;</font></p> </td>
        <td   colspan="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>our ability to establish additional collaborative relationships; and</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the effect of commercialization activities and facility expansions if and as required.</font></p> </td>
        <td  width="109">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="322" ></td>

        <td width="77" ></td>

        <td width="44" ></td>

        <td width="60" ></td>

        <td width="118" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We have limited financial resources and to date, no cash flow from operations and we are dependent for funds on our ability to sell our common stock, primarily on a private placement basis.  There can be no assurance that we will be able to obtain financing on that basis in light of factors such as the market demand for our securities, the state of financial markets generally and other relevant factors.  Any sale of our common stock in the future will result in dilution to existing shareholders.  Furthermore, there is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay our future indebtedness or that we will not default on our future debts, jeopardizing our business viability.  Finally, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct the development and
commercialization of our PluriX&#153; Bioreactor system, which might result in the loss of some or all of your investment in our common stock.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>If we fail to obtain and maintain required regulatory approvals for our PluriX&#153; Bioreactor system, our ability to commercialize our PluriX&#153; Bioreactor system will be limited severely. </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Once fully developed, we intend to market our PluriX&#153; Bioreactor system primarily in the United States, Europe and Japan.  We must obtain the approval of the Food and Drug Administration before commercialization of our technology may commence in the United States and similar agencies in Europe.  We may also be required to obtain </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 13-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>additional approvals from foreign regulatory authorities to commence our marketing activities in those jurisdictions.  If we cannot demonstrate the safety, reliability and efficacy of our PluriX&#153; Bioreactor system, or of the cells produced in the PluriX&#153; Bioreactor system, including long-term sustained cell engraftment, or if one or more patients die or suffer severe complications in future clinical trials, the Food and Drug Administration or other regulatory authorities could delay or withhold regulatory approval of our technology. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Furthermore, even if we obtain regulatory approval for our PluriX&#153; Bioreactor system, that approval may be subject to limitations on the indicated uses for which it may be marketed.  Even after granting regulatory approval, the Food and Drug Administration, other regulatory agencies, and governments in other countries will continue to review and inspect marketed products, manufacturers and manufacturing facilities.  Later discovery of previously unknown problems with a product, manufacturer or facility may result in restrictions on the product or manufacturer, including a withdrawal of the product from the market.  Further, governmental regulatory agencies may establish additional regulations which could prevent or delay regulatory approval of our technology. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Even if we obtain regulatory approvals to commercialize our technology, we may encounter a lack of commercial acceptance of our PluriX&#153; Bioreactor system, which would impair the profitability of our business. </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our research and development efforts are primarily directed toward obtaining regulatory approval to market the PluriX&#153; Bioreactor system as an alternative to, or as an improvement for, the traditional bone marrow harvest and peripheral blood progenitor cell stem cell collection methods.  These stem cell collection methods have been widely practiced for a number of years, and our technology may not be accepted by the marketplace as readily as these or other competing processes and methodologies.  Additionally, our PluriX&#153; Bioreactor system may not be employed in all potential applications being investigated, and any reduction in applications would limit the market acceptance of our technology and our potential revenues.  As a result, even if we obtain all required regulatory approvals, we cannot be certain that our PluriX&#153; Bioreactor system will be adopted at a level that would allow us to
operate profitably. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>If we do not keep pace with our competitors and with technological and market changes, our technology may become obsolete and our business may suffer. </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The market for our technology is very competitive, is subject to rapid technological changes and varies for different individual products.  We believe that there are potentially many competitive approaches being pursued in competition to our technology, including some by private companies for which information is difficult to obtain. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Many of our competitors have significantly greater resources, more product candidates and have developed product candidates and processes that directly compete with our technology.  Our competitors may have developed, or could in the future develop, new technologies that compete with our technology or even render our technology obsolete.  Our technology is designed to expand hematopoietic stem cells outside of the human body without differentiation so they may be used in bone marrow transplants and other methods of cell therapy.  Even if we are able to demonstrate improved or equivalent results, researchers and practitioners may not use our technology and we will suffer a competitive disadvantage.  Finally, to the extent that others develop new technologies that address the targeted application for our PluriX&#153; Bioreactor system, our business will suffer. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>We depend to a significant extent on certain key personnel, the loss of any of whom may materially and adversely affect our company.</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our success depends on a significant extent to the continued services of certain highly qualified scientific and management personnel, including our Chief Executive Officer, Dr. Shai Meretzki, our President, John L. Bakos, and our Chief Financial Officer, Yossi Keret.  We face competition for qualified personnel from numerous industry sources, and there can be no assurance that we will be able to attract and retain qualified personnel on acceptable terms.  The loss of service of any of our key personnel could have a material adverse effect on our operations or financial condition.  In the event of the loss of services of such personnel, no assurance can be given that we will be able to obtain the services of adequate replacement personnel.  We do not maintain key person insurance on the lives of any of our officers or employees.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 14-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Our success depends in large part on our ability to develop and protect our PluriX&#153; Bioreactor system technology.  If our patents and proprietary right agreements do not provide sufficient protection for our PluriX&#153; Bioreactor system technology, our business and competitive position will suffer. </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We rely on an exclusive, world-wide license relating to the production of human cells granted to us by the Weizmann Institute of Science and Technion-Israel Institute of Technology for certain of our patent rights.  If we materially breach such agreement or otherwise fail to materially comply with such agreement, or if such agreement expires or is otherwise terminated by us, we may lose our rights under the patents held by the Weizmann Institute of Science and Technion-Israel Institute of Technology.  At the latest, the license will terminate when the patents underlying the license expire.  The underlying patents will expire in approximately 2020.  Also, the scope of the patents licensed to us may not be sufficiently broad to offer meaningful protection.  In addition, the patents licensed to us could be successfully challenged, invalidated or circumvented so that our patent rights would not create an
effective competitive barrier.  Significantly, we do not as yet have patents in the United States or Europe or any other major market, although patents have been applied for.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We also rely on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements with our employees, consultants, suppliers and licensees.  These agreements may be breached, and we might not have adequate remedies for any breach.  If this were to occur, our business and competitive position would suffer. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>We may be subject to intellectual property litigation such as patent infringement claims, which could adversely affect our business. </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our success will also depend in part on our ability to develop commercially viable technology without infringing the proprietary rights of others.  Although we have not been subject to any filed infringement claims, other patents could exist or could be filed which would prohibit or limit our ability to develop and market our PluriX&#153; Bioreactor system in the future.  In the event of an intellectual property dispute, we may be forced to litigate.  Intellectual property litigation would divert management's attention from developing our technology and would force us to incur substantial costs regardless of whether we are successful.  An adverse outcome could subject us to significant liabilities to third parties, and force us to curtail or cease the development and commercialization of our PluriX&#153; Bioreactor system. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Potential product liability claims could adversely affect our future earnings and financial condition. </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We face an inherent business risk of exposure to product liability claims in the event that the use of the PluriX&#153; Bioreactor system during research and development efforts, including future clinical trials, or after commercialization results in adverse affects.  As a result, we may incur significant product liability exposure.  We may not be able to maintain adequate levels of insurance at reasonable cost and/or reasonable terms.  Excessive insurance costs or uninsured claims would add to our future operating expenses and adversely affect our financial condition. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Our principal research and development facilities are located in Israel and the unstable military and political conditions of Israel may cause interruption or suspension of our business operations without warning.  </font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our principal research and development facilities are located in Israel.  As a result, we are directly influenced by the political, economic and military conditions affecting Israel.  Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors and, since September 2000, involving the Palestinian population, and a state of hostility, varying in degree and intensity, has led to security and economic problems for Israel and companies based in Israel.  Acts of random terrorism periodically occur which could affect our operations or personnel.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In addition, Israeli-based companies and companies doing business with Israel, have been the subject of an economic boycott by members of the Arab League and certain other predominantly Muslim countries since Israel's establishment.  Although Israel has entered into various agreements with certain Arab countries and the Palestinian Authority, and various declarations have been signed in connection with efforts to resolve some of the economic </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 15-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>and political problems in the Middle East, we cannot predict whether or in what manner these problems will be resolved.  Also, since the end of September 2000, there has been a marked increase in the level of terrorism in Israel, which has significantly damaged both the Israeli economy and levels of foreign and local investment. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Furthermore, certain of our officers and employees may be obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being called up for active military duty at any time.  All Israeli male citizens who have served in the army are subject to an obligation to perform reserve duty until they are between 45 and 54 years old, depending upon the nature of their military service. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Because some of our officers and directors are located in non-U.S. jurisdictions, you may have no effective recourse against the management for misconduct and may not be able to enforce judgement and civil liabilities against our officers, directors, experts and agents.</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Most of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of their assets are located outside the United States.  As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any U.S. state.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Because we do not intend to pay any dividends on our common stock, investors seeking dividend income or liquidity should not purchase shares of our common stock.</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.  Investors seeking dividend income or liquidity should not invest in our common stock.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Our stock is considered a &#147;penny stock&#148; and certain securities rules may hamper the tradability of our shares in the market.</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>See &#147;Market for Common Equity and Related Security Holder Matters&#148;.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>FORWARD-LOOKING STATEMENTS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>This prospectus contains forward-looking statements which relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" on pages 11 to 15, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.  The safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to the offering made in this prospectus.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Any member of the public may read and copy any materials filed by us with the Securities and Exchange Commission at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, D.C. 20549.  Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.  The SEC </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 16-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>maintains an Internet website (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>THE OFFERING</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>This prospectus relates to the resale by certain selling security holders of Pluristem Life Systems, Inc. of up to 70,565,000 shares of our common stock in connection with the resale of:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 8,500,000 shares of our common stock, representing those shares of our common stock that were sold to certain selling security holders pursuant to the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated October 25, 2004 &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement&#148;</font></p> </td> </tr>
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        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 8,500,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated October 25, 2004 - see &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 245,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued as consideration for services provided as placement agents - see &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 12,000,000 shares of our common stock, representing those shares of our common stock that were sold to certain selling security holders pursuant to the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated January 24, 2005 &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 12,000,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Common Stock and Warrant Purchase Agreements entered into between the selling security holders and our company dated January 24, 2005 - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 1,845,000 shares of our common stock, representing those shares of our common stock that were issued to a security holder as consideration for services provided as a placement agent - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 475,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued as consideration for services provided as placement agents - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement&#148;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 12,000,000 shares of our common stock, representing those shares of our common stock that were sold to certain selling security holders pursuant to the Private Placement Subscription Agreements entered into between the selling security holders and our company dated January 31, 2005 &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement&#148;</font></p> </td> </tr>
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        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 12,000,000 shares of our common stock, representing those shares of our common stock that are issuable to certain security holders upon exercise of warrants issued in connection with the Private Placement Subscription Agreements entered into between the selling security holders and our company </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>dated January 31, 2005 - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement&#148; and</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 600,000 shares of our common stock, representing those shares of our common stock that are issuable to a security holder upon exercise of warrants issued as consideration for services provided as a placement agent - see &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement&#148;</font></p> </td> </tr>
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        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>up to 2,400,000 shares of our common stock, representing those shares of our common stock that are issuable to our Chief Executive Officer, Dr. Shai Meretzki, upon exercise of warrants issued to him in connection with the issuance of a Notice of Allowance by the United States Patent Office for our patent application number 09/890,401.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The selling security holders may sell the shares of common stock being offered in this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices.  We will not receive any proceeds from the resale of shares of our common stock by the selling security holder.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>USE OF PROCEEDS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The shares of common stock offered by this prospectus are being registered for the account of the selling security holders named in this prospectus.  As a result, all proceeds from the sales of the common stock will go to the selling security holders and we will not receive any proceeds from the resale of the common stock by the selling security holders.  We will, however, incur all costs associated with this registration statement and prospectus.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Assuming all of the warrants for which the underlying shares of our common stock that are covered by this prospectus are exercised for cash, we will receive cash proceeds from the exercise of the warrants and we will use these proceeds for our general working capital.</font><i><b><font size=2> </font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DETERMINATION OF OFFERING PRICE</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>This prospectus covers the resale by the selling security holders named in this prospectus of up to 70,565,000 shares of our common stock.  The selling security holder may offer to sell the shares of our common stock being offered in this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices.  We will not receive any proceeds from the resale of shares of our common stock by the selling security holder.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>SELLING SECURITY HOLDERS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The selling security holders may offer and sell, from time to time, any or all of the common stock issued and those issuable to them upon exercise of the share purchase warrants.  Because any one of the selling security holders may offer all or only some portion of the shares of common stock registered for such holder, no estimate can be given as to the amount or percentage of these shares of common stock that will be held by the selling security holders upon termination of the offering.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The following table sets forth certain information regarding the beneficial ownership of shares of common stock by the selling security holders as of April 18, 2005, and the number of shares of common stock covered by this prospectus.  The number of shares in the table represents an estimate of the number of shares of common stock to be offered by the selling security holder.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The selling security holders identified by footnote 1 in the table below acquired their beneficial interests in the shares being offered hereby in the private placement described in this Prospectus under the caption &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement.&#148;  The selling security holders identified by footnote 2 in the table below acquired their beneficial interests in the shares being offered hereby in the private placement described in this Prospectus under the caption &#147;Description of the </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 18-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement.&#148;  The selling security holders identified by footnote 3 in the table below acquired their beneficial interests in the shares being offered hereby in the private placement described in this Prospectus under the caption &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement.&#148; </font></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:left;'><font size=2>Beneficial ownership is determined in accordance with SEC rules and includes voting or investment power with respect to the securities.  This includes shares which a person or entity has the right to acquire in the next 60 days.  However, each selling security holder identified by footnotes 1, 2, 3 or 4 in the table below is subject to certain limitations on the exercise of their warrants, if any.  Therefore, although they are included in the table below, the number of shares of Common Stock for some listed selling security holders may include shares that are not subject to purchase during the 60-day period. Other than the relationships described below, none of the selling security holders had or have any material relationship with us.  None of the selling security holders is a broker-dealer or an affiliate of a broker-dealer to our knowledge.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse; '>
    <tr>
        <td width="175" rowspan=2 valign=top style='border:solid black .5pt;border-color:gray;  background:#E5E5E5;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><br>  <br>  <br>  <br>  <b><font size=2>Name of Selling Security  Holder and Position, Office or Material Relationship with Pluristem</font></b><b></b></p>  </td>
        <td width="102" rowspan=2 valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center;  line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><br>  <br>  <br>  <br>  <b><font size=2>Common Shares owned by the  Selling Security Holder</font></b><b><i></i></b></p>  </td>
        <td width="108" rowspan=2 valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center;  line-height:normal;margin-bottom:0.5pt'><br>  <b><font size=2>Number of</font></b><br>  <b><font size=2>Shares</font></b><br>  <b><font size=2>Issuable</font></b><br>  <b><font size=2>Upon Exercise</font></b><br>  <b><font size=2>of all of the</font></b><br>  <b><font size=2>Share Purchase Warrants</font></b><b></b></p>  </td>
        <td width="90" rowspan=2 valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center;  line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><br>  <br>  <br>  <br>  <br>  <b><font size=2>Shares Offered Pursuant to  this Offering</font></b><b></b></p>  </td>
        <td  colspan="2" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center;  line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><b><font  size=2>Number  of Shares Owned by Selling Security Holder After Offering and Percent of  Total Issued and Outstanding if All Shares Offered are Sold</font></b><b></b></p>  </td> </tr>
    <tr>
        <td width="96" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center;  line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><b><font  size=2>#  of </font></b><br>  <b><font size=2>Shares</font></b><b></b></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center;  line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><b><font  size=2>%  of</font></b><br>  <b><font size=2>Class</font></b><b></b></p>  </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Park Ridge Investments A.V.V.</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,000,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,000,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>2,000,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Shay Britz</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>500,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>500,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,000,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Glenrock Israel Ltd.</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000</font><sup><font size=2> (1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000</font><sup><font size=2> (1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,200,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Bezalel Ziv Ron</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>100,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>100,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>200,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Alshuler-Shaham Ltd.</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>300,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>300,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Rolfe Investments Ltd.</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>250,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>250,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>500,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Eshed Dash Ltd. </font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>500,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>500,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,000,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Dahav Financial Systems Ltd</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>300,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>300,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Platinum Partners Value Arbitrage Fund L.P.</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,000,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,000,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>2,000,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Yosef Solt</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>250,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>262,500 </font><sup><font size=2>(1) (5)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>512,500</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Ori Ackerman</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>250,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>715,000 </font><sup><font size=2>(1) (5) (6)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>965,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Iris Nehoray</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,200,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Elazar Nehoray</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,200,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Ilana Nehoray</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,200,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Osnot Nehoray</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>600,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>1,200,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Avinoam Rapaport</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>100,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>110,000 </font><sup><font size=2>(1) (5)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>210,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Kopelman Ltd.</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>250,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>250,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>500,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Tibo Marcovich</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>200,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>200,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>400,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Shlomo Shmulelov</font></p> </td>
        <td width="102" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>263,889 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>250,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>500,000</font></p> </td>
        <td width="96" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>13,889</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid;margin-bottom:0.5pt'><font size=2>0.02%</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 19-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="1" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Ilana Rachmilovitz</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>50,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>50,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Rockwell Invest Ltd.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>400,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Shmuel Even</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>30,000</font><sup><font size=2>(5)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>30,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Izhak Brown</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>75,000</font><sup><font size=2>(5)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>75,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Amnon Dardik</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>12,500</font><sup><font size=2>(5)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>12,500</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Joseph Corso</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>7,000,000</font><sup><font size=2> (2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>7,000,000</font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>14,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Kevin Klier</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,500,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,500,000</font><sup><font size=2> (2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>3,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Frank Santo Jr.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>800,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>800,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,600,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Danielle Inserra</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Michele Inserra</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Christopher Short</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>250,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>250,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Robert V. Clark</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>250,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>250,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Gina M. Brody</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>400,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Joseph De Francesco</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>400,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Joseph Greco Sr.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>400,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Sean Walter</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>400,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Joseph Greco Jr.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Candace Lee</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Mauricio Perez</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>David P. Johnson</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>100,000 </font><sup><font size=2>(2)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>200,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Carlthon Corp.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,200,000</font><sup><font size=2>(6)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,200,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Mark Zegal</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,050,000</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>600,000</font><sup><font size=2>(6)</font></sup></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>450,000</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0.71%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Kinianie Barehet Ltd.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>20,000</font><sup><font size=2>(6)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>20,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Erets Hacamel Ltd.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>20,000</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>10,000</font><sup><font size=2>(6)</font></sup></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>10,000</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0.02%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>David Buch</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>15,000</font><sup><font size=2>(6)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>40,000</font><sup><font size=2>(5) (7)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>55,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Amir Uziel</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>25,000</font><sup><font size=2> (7)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>25,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Stonestreet Limited Partnership</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>4,000,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>4,000,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>8,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Whalehaven Capital Fund Limited</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>3,000,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>3,000,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>6,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Alpha Capital AG</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,000,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,000,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>2,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Bristol Capital Advisors, LLC</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,500,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,500,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>3,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Shimon Vogel</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 20-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="1" cellspacing=0 cellpadding=0 width="100%" style=' border-collapse:collapse'>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Tower Paper Co. Inc. Retirement Plan</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>250,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>250,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Mordechai Vogel</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>250,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>250,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Yokim Asset Management Corp.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,000,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,650,000</font><sup><font size=2> (3) (5) (8)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>2,650,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>David Klugmann Associates Inc.</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>500,000</font><sup><font size=2> (3)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>1,000,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><font size=2>Dr. Shai Meretzki, Chief Executive Officer </font></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>10,053,170</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>2,400,000</font><sup><font size=2>(4)</font></sup></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>2,400,000</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>7,653,170</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>12.16%</font></p> </td> </tr>
    <tr>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;line-height:normal'><b><font SIZE=2>TOTAL</font></b><b></b></p> </td>
        <td width="102" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><b><font size=2>44,872,059</font></b><b></b></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><b><font size=2>36,220,000</font></b><b></b></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><b><font size=2>70,565,000</font></b><b></b></p> </td>
        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>8,127,059</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;text-align:center; line-height:normal;page-break-after:avoid'><font size=2>12.78%</font><b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>&nbsp;</font></sup></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(1)</font></sup><font size=2>  Represents shares of common stock that were sold to the selling security holder or shares of our common stock that are issuable to the selling security holder upon exercise of the warrant issued to such holder in connection with the Common Stock and Warrant Purchase Agreement dated October 25, 2004 between the holder and our company &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(2)</font></sup><font size=2>  Represents shares of common stock that were sold to the selling security holder or shares of our common stock that are issuable to the selling security holder upon exercise of the warrant issued to such holder in connection with the Common Stock and Warrant Purchase Agreement dated January 24, 2005 between the holder and our company &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(3)</font></sup><font size=2>  Represents shares of common stock that were sold to the selling security holder or shares of our common stock that are issuable to the selling security holder upon exercise of the warrant issued to such holder in connection with the Common Stock and Warrant Purchase Agreement dated January 31, 2005 between the holder and our company &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><font size=2>(4)  Represents the shares of our common stock that are issuable upon the exercise of the warrants issued to Dr. Shai Meretzki in connection with the issuance of a Notice of Allowance by the United States Patent Office for our patent application number 09/890,401.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(5)</font></sup><font size=2>  Represents shares of common stock that are issuable to the selling security holders upon exercise of the warrant issued to such holders as consideration for services rendered as placement agents &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the October 25, 2004 Private Placement.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(6)</font></sup><font size=2>  Represents shares of common stock that were issued to the selling security holder as consideration for services rendered for financial advice and as a placement agent &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(7)</font></sup><font size=2>  Represents shares of common stock that are issuable to the selling security holder upon exercise of the warrant issued to such holder as consideration for services rendered for financial advice and as a placement agent &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 24, 2005 Private Placement.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(8)</font></sup><font size=2>  Represents shares of common stock that are issuable to the selling security holder upon exercise of the warrant issued to such holder as consideration for services rendered as a placement agent &#150; see &#147;Description of the Agreements with Certain Selling Security Holders in the January 31, 2005 Private Placement.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We may require the selling security holder to suspend the sales of the securities offered by this prospectus upon the occurrence of any event that makes any statement in this prospectus or the related registration statement untrue in any material respect or that requires the changing of statements in these documents in order to make statements in those documents not misleading.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>PLAN OF DISTRIBUTION</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The selling security holders may, from time to time, sell all or a portion of the shares of common stock on any market upon which the common stock may be quoted (currently the National Association of Securities Dealers OTC Bulletin Board), in privately negotiated transactions or otherwise.  Such sales may be at fixed prices prevailing at </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 21-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>the time of sale, at prices related to the market prices or at negotiated prices.  The shares of common stock being offered for resale by this prospectus may be sold by the selling security holders by one or more of the following methods, without limitation:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(a)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>block trades in which the broker or dealer so engaged will attempt to sell the shares of common stock as agent but may position and resell a portion of the block as principal to facilitate the transaction;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>purchases by broker or dealer as principal and resale by the broker or dealer for its account pursuant to this prospectus;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="595" style=' margin-left:.5in;border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an exchange distribution in accordance with the rules of the exchange;</font></p> </td>
        <td   colspan="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>ordinary brokerage transactions and transactions in which the broker solicits purchasers;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td width="198" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>privately negotiated transactions;</font></p> </td>
        <td   colspan="7">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(f)</font></p> </td>
        <td  colspan="7" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>market sales (both long and short to the extent permitted under the federal securities laws);</font></p> </td>
        <td  width="42">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(g)</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>at the market to or through market makers or into an existing market for the shares;</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(h)</font></p> </td>
        <td  colspan="8" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>through transactions in options, swaps or other derivatives (whether exchange listed or otherwise);</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a combination of any aforementioned methods of sale; and</font></p> </td>
        <td   colspan="5">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(j)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>any other method permitted pursuant to applicable law.</font></p> </td>
        <td   colspan="6">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="198" ></td>

        <td width="116" ></td>

        <td width="21" ></td>

        <td width="62" ></td>

        <td width="69" ></td>

        <td width="28" ></td>

        <td width="11" ></td>

        <td width="42" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In the event of the transfer by any selling security holder of his or her shares to any pledgee, donee or other transferee, we will amend this prospectus and the registration statement of which this prospectus forms a part by the filing of a post-effective amendment in order to have the pledgee, donee or other transferee in place of the selling security holder who has transferred his or her shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In effecting sales, brokers and dealers engaged by the selling security holders may arrange for other brokers or dealers to participate.  Brokers or dealers may receive commissions or discounts from the selling security holders or, if any of the broker-dealers act as an agent for the purchaser of such shares, from the purchaser in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved.  Broker-dealers may agree with the selling security holders to sell a specified number of the shares of common stock at a stipulated price per share.  Such an agreement may also require the broker-dealer to purchase as principal any unsold shares of common stock at the price required to fulfil the broker-dealer commitment to the selling security holders if such broker-dealer is unable to sell the shares on behalf of the selling security holders.  Broker-dealers who
acquire shares of common stock as principal may thereafter resell the shares of common stock from time to time in transactions which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above.  Such sales by a broker-dealer could be at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or in negotiated transactions.  In connection with such resales, the broker-dealer may pay to or receive from the purchasers of the shares, commissions as described above.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The selling security holders and any broker-dealers or agents that participate with the selling security holders in the sale of the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act in connection with these sales.  In that event, any commissions received by the broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Any sales of shares may be effected through the OTC Bulletin Board, in private transactions or otherwise, and the shares may be sold at market price prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 22-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The selling shareholders may also engage in short sales against the box, puts and calls and other transactions in our securities or derivatives of our securities and may sell or deliver shares in connection with these trades.From time to time, the selling security holders may pledge their shares of common stock pursuant to the margin provisions of their customer agreements with their brokers.  Upon a default by a selling security holder, the broker may offer and sell the pledged shares of common stock from time to time.  Upon a sale of the shares of common stock, the selling security holders intend to comply with the prospectus delivery requirements, under the Securities Act, by delivering a prospectus to each purchaser in the transaction.  We intend to file any amendments or other necessary documents in compliance with the Securities Act which may be required in the event any selling security holder defaults
under any customer agreement with brokers.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>To the extent required under the Securities Act, a post effective amendment to this registration statement will be filed, disclosing the name of any broker-dealers, the number of shares of common stock involved, the price at which the common stock is to be sold, the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable, that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus and other facts material to the transaction.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We and the selling security holders will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations under it, including, without limitation, Rule 10b-5 and, insofar as the selling security holders are distribution participants and we, under certain circumstances, may be a distribution participant, under Regulation M.  All of the foregoing may affect the marketability of the common stock.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>All expenses of the registration statement including, but not limited to, legal, accounting, printing and mailing fees are and will be borne by us. Any commissions, discounts or other fees payable to brokers or dealers in connection with any sale of the shares of common stock will be borne by the selling security holders, the purchasers participating in such transaction, or both. We have agreed to indemnify certain selling security holders and certain other persons against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments to which such selling security holders or their respective pledgees, donees, transferees or other successors in interest may be required to make in respect thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DESCRIPTION OF THE AGREEMENTS WITH CERTAIN SELLING SECURITY HOLDERS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>IN THE OCTOBER 25, 2004 PRIVATE PLACEMENT</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On October 25, 2004, we commenced a private placement offering with a group of investors who subscribed for units of our securities pursuant to Common Stock and Warrant Purchase Agreement dated for reference on October 25, 2004.  For the sake of clarity, we will refer to this private placement offering in this prospectus as the October 25, 2004 Private Placement.  We are registering a portion of the shares offered in this prospectus to satisfy our obligations to certain selling security holders of our common stock who participated in our October 25, 2004 Private Placement. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Under a Common Stock and Warrant Purchase Agreement, dated as of October 25, 2004, between our company and those selling security holders who participated in our October 25, 2004 Private Placement, the selling security holders collectively purchased 8,500,000 shares of our common stock at the price of $0.10 per share.  In connection with the purchase of our common stock by these holders, we issued to these holders warrants to purchase our common stock in an amount equal to one (1) share of common stock for each share of common stock purchased under the Common Stock and Warrant Purchase Agreement. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The warrants are exercisable at a per share exercise price equal to $0.30.  This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on the second annual anniversary date of the date when the warrants are issued.  The warrants will expire earlier if our company is acquired by another company which results in more than fifty percent (50%) of the outstanding voting securities of the surviving entity being held by person who were not shareholders of our company before such a transaction, or if our company sells, leases, assigns, transfers or disposes all or substantially </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 23-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>all of our assets.  The terms of the warrants specify that the holder can exercise its warrant by giving notice to our company together with a check payable in lawful money of the United States for the aggregate exercise price. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Pursuant to the Investors&#146; Rights Agreement executed and delivered at the same time, we are obligated to use our best efforts to register under the Securities Act the shares of our common stock held by the selling security holders who purchased our common stock under the Common Stock and Warrant Purchase Agreement dated for reference on October 25, 2004, including those shares of our common stock issuable upon exercise of the warrants.  We are also obligated to use our best efforts to keep the registration statement of which this prospectus forms a part effective until the earliest of the date on which the holders may sell without restriction all shares registered on their behalf under this prospectus under Rule 144 promulgated under the Securities Act, or the date on which such holders no longer own any of those shares of our common stock or any of those warrants. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Pursuant to the Escrow Agreement executed and delivered as a part of the transaction together with the Common Stock and Warrant Purchase Agreement dated for reference on October 25, 2004, the selling security holders agreed not to sell or offer for sale their shares of our common stock for a period of nine (9) months after closing and to place their shares and warrants in escrow with an escrow agent to be released as to twenty five percent (25%) at a time on each of the 9th, 12th, 15th and 18th month anniversaries of the closing.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We also committed to pay cash in the amount of $24,500 and issued warrants to purchase 245,000 shares of our common stock to certain selling security holders as consideration for their services to our company as placement agents for the October 25, 2004 Private Placement.  The warrants are exercisable at a per share exercise price equal to $0.10. The finders&#146; warrants were modified in March, 2005, from an exercise price of $0.30 to an exercise price of $0.10 based on negotiations with the finders. This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on November 30, 2006. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Reference is made to the Common Stock and Warrant Purchase Agreement, the form of warrants and the Investors&#146; Rights Agreement and Escrow Agreement that are filed as exhibits to the registration statement for more complete description of the complex provisions that are summarized under this caption. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DESCRIPTION OF THE AGREEMENTS WITH CERTAIN SELLING SECURITY HOLDERS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>IN THE JANUARY 24, 2005 PRIVATE PLACEMENT</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On January 24, 2005, we commenced another private placement offering with a group of investors who subscribed for units of our securities pursuant to Common Stock and Warrant Purchase Agreement dated for reference on January 24, 2005.  For the sake of clarity, we will refer to this private placement offering in this prospectus as the January 24, 2005 Private Placement.  We are registering a portion of the shares offered in this prospectus to satisfy our obligations to certain selling security holders of our common stock who participated in our January 24, 2005 Private Placement. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Under a Common Stock and Warrant Purchase Agreement, dated as of January 24, 2005, between our company and those selling security holders who participated in our January 24, 2005 Private Placement, the selling security holders collectively purchased 12,000,000 shares of our common stock at the price of $0.10 per share.  In connection with the purchase of our common stock by these holders, we issued to these holders warrants to purchase our common stock in an amount equal to one (1) share of common stock for each share of common stock purchased under the Common Stock and Warrant Purchase Agreement. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The warrants are exercisable at a per share exercise price equal to $0.30.  This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on November 30, 2006.  The warrants will expire earlier if our company is acquired by another company which results in more than fifty percent (50%) of the outstanding voting securities of the surviving entity being held by person who were not shareholders of our company before such a transaction, or if our company sells, leases, assigns, transfers or disposes all or substantially all of our assets.  The terms of the warrants specify that the holder can exercise its warrant by giving notice to our company together with a check payable in lawful money of the United States for the aggregate exercise price. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 24-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Pursuant to the Investors&#146; Rights Agreement executed and delivered at the same time, we are obligated to use our best efforts to register under the Securities Act the shares of our common stock held by the selling security holders who purchased our common stock under the Common Stock and Warrant Purchase Agreement dated for reference on January 24, 2005, including those shares of our common stock issuable upon exercise of the warrants.  We are also obligated to use our best efforts to keep the registration statement of which this prospectus forms a part effective until the earliest of the date on which the holders may sell without restriction all shares registered on their behalf under this prospectus under Rule 144 promulgated under the Securities Act, or the date on which such holders no longer own any of those shares of our common stock or any of those warrants. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Pursuant to the Escrow Agreement executed and delivered as a part of the transaction together with the Common Stock and Warrant Purchase Agreement dated for reference on January 24, 2005, the selling security holders agreed not to sell or offer for sale their shares of our common stock until August 30, 2005 and to place their shares and warrants in escrow with an escrow agent to be released as to twenty five percent (25%) at a time on each of the 9th, 12th, 15th and 18th month anniversaries of November 30, 2004.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We issued 1,845,000 shares of our common stock to certain selling security holders as consideration for their services to our company for financial advice and as placement agents for the January 24, 2005 Private Placement.  We are obligated to use our best efforts to register these shares of our common stock under the Securities Act.  We also issued warrants to purchase 475,000 shares of our common stock to seven selling security holders as consideration for their services to our company for financial advice and as placement agents for the January 24, 2005 Private Placement.  These warrants are exercisable at a per share exercise price equal to $2.50.  This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on November 30, 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Reference is made to the Common Stock and Warrant Purchase Agreement, the form of warrants and the Investors&#146; Rights Agreement and Escrow Agreement that are filed as exhibits to the registration statement for more complete description of the complex provisions that are summarized under this caption. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DESCRIPTION OF THE AGREEMENTS WITH CERTAIN SELLING SECURITY HOLDERS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>IN THE JANUARY 31, 2005 PRIVATE PLACEMENT</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On January 31, 2005, we commenced a private placement offering with a group of investors who subscribed for units of our securities pursuant to Private Placement Subscription Agreement dated for reference on January 31, 2005.  For the sake of clarity, we will refer to this private placement offering in this prospectus as the January 31, 2005 Private Placement.  We are registering a portion of the shares offered in this prospectus to satisfy our obligations to certain selling security holders of our common stock who participated in our January 31, 2005 Private Placement. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Under a Private Placement Subscription Agreement, dated as of January 31, 2005, between our company and those selling security holders who participated in our January 31, 2005 Private Placement, the selling security holders collectively purchased 12,000,000 shares of our common stock at the price of $0.10 per share.  In connection with the purchase of our common stock by these holders, we issued to these holders warrants to purchase our common stock in an amount equal to one (1) share of common stock for each share of common stock purchased under the Private Placement Subscription Agreement. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The warrants are exercisable at a per share exercise price equal to $0.30.  This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on November 30, 2006.  The warrants will expire earlier if our company is acquired by another company which results in more than fifty percent (50%) of the outstanding voting securities of the surviving entity being held by person who were not shareholders of our company before such a transaction, or if our company sells, leases, assigns, transfers or disposes all or substantially all of our assets.  The terms of the warrants specify that the holder can exercise its warrant by giving notice to our company together with a check payable in lawful money of the United States for the aggregate exercise price. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Pursuant to the Investors&#146; Rights Agreement executed and delivered at the same time, we are obligated to register </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 25-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>under the Securities Act the shares of our common stock held by the selling security holders who purchased our common stock under the Private Placement Subscription Agreement dated for reference on January 31, 2005, including those shares of our common stock issuable upon exercise of the warrants.  We are also obligated to keep the registration statement of which this prospectus forms a part effective until the earliest of the date on which the holders may sell without restriction all shares registered on their behalf under this prospectus under Rule 144 promulgated under the Securities Act, or the date on which such holders no longer own any of those shares of our common stock or any of those warrants. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In the Private Placement Subscription Agreement, we have agreed that we will not sell or transfer any of our common stock or securities exercisable or convertible into our common stock to any person at a price less than $0.10 per share without written consent of the selling security holders who participated in our January 31, 2005 private placement.  If we breach this agreement, the relevant selling security holders will be entitled to an additional number of shares of our common stock and warrants to purchase our common stock (in this paragraph we will refer to one share of our common stock and a warrant to purchase one share of our common stock as a unit).   The number of additional units entitled by each of the relevant selling security holders will be the difference between: </font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Original number of units issued to a relevant selling security holder (X) divided by the per share price (A) at which we sell our common stock at lower than $0.10 per share; minus</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td width="499" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Original number of units issued to a relevant selling security holder (X) divided by $0.10.</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>For the sake of clarity and by way of example, if there are 50,000 original units issued to a selling security holder and our company sold new shares of common stock to others at a price of $0.07 per share, the selling security holder would be entitled to (50,000 divided by 0.07 equals to 714,286 less 50,000 divided by 0.10 equals 500,000 totals 214,286) 214,286 additional units.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Under the Investors&#146; Rights Agreement, we will be obligated to pay liquidated damages to the holders of our common stock who are parties to that agreement, if the Registration Statement is not filed within 70 days after the closing date of the private placement, and if it is not declared effective by August 30, 2005 or if, the effectiveness of the Registration Statement is subsequently suspended for more than certain permitted periods.  The permitted suspension periods are up to two periods during any consecutive 12-month period, but each period shall not be for more than 15 days or begin less than 10 days after the preceding suspension period ended. (The first date any such suspension commences, beyond such permitted restrictions, is referred to as a restricted sale date.) </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The amount that we must pay to these holders in respect of the liquidated damages associated with the delays in the effective date or after a restricted sale date will be 2% of the purchase price paid by each holder in the January 31, 2005 private placement for each 30-day periods (or part).</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We also paid cash in the amount of $60,000 issued warrants to purchase 600,000 shares of our common stock to a selling security holder as consideration for its services to our company as a placement agent for the January 31, 2005 Private Placement.  The warrants are exercisable at a per share exercise price equal to $0.10.  This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on June 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Reference is made to the Private Placement Subscription Agreement, the form of warrants and the Investors&#146; Rights Agreement that are filed as exhibits to the registration statement for more complete description of the complex provisions that are summarized under this caption. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>LEGAL PROCEEDINGS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 26-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS</font></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:left;'><font size=2>All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified.  The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.  Our directors and executive officers, their ages, positions held, and duration as such, are as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style=' border-collapse:collapse; '>
    <tr>
        <td width="150" valign=top style='border:solid black .5pt;border-color:gray;  background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom:  3.0pt;margin-left:0in'><b><font size=2>Name</font></b><b></b></p>  </td>
        <td width="264" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:3.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Position  Held with our Company</font></b><b></b></p>  </td>
        <td width="78" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:3.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Age</font></b><b></b></p>  </td>
        <td width="132" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:3.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Date  First</font></b><br>  <b><font size=2>Elected or  Appointed</font></b><b></b></p>  </td> </tr>
    <tr>
        <td width="150" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in'><font size=2>Dr. Shai Meretizki</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>Chief Executive Officer</font></p> </td>
        <td width="78" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>37</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>October 17, 2004</font></p> </td> </tr>
    <tr>
        <td width="150" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in'><font size=2>Yossi Keret</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>Chief Financial Officer</font></p> </td>
        <td width="78" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>38</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>May 30, 2004</font></p> </td> </tr>
    <tr>
        <td width="150" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in'><font size=2>John L. Bakos</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>President</font></p> </td>
        <td width="78" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>50</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>February 3, 2005</font></p> </td> </tr>
    <tr>
        <td width="150" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in'><font size=2>Doron Shorrer</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>Chairman of the Board, Director</font></p> </td>
        <td width="78" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>51</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>October 2, 2003</font></p> </td> </tr>
    <tr>
        <td width="150" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in'><font size=2>Hava Meretzki</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>Director</font></p> </td>
        <td width="78" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>37</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>October 2, 2003</font></p> </td> </tr>
    <tr>
        <td width="150" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in'><font size=2>Yoram Drucker</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>Director</font></p> </td>
        <td width="78" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>40</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>January 26, 2005</font></p> </td> </tr>
    <tr>
        <td width="150" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in'><font size=2>Israel Ben-Yoram</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>Director</font></p> </td>
        <td width="78" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>43</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:center; page-break-after:avoid'><font size=2>January 26, 2005</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Business Experience</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The following is a brief account of the education and business experience of each director and executive officer during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he was employed.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>Dr. Shai Meretzki</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Dr. Shai Meretzki was the founder and the chief technology officer of our wholly owned subsidiary, Pluristem, Ltd.  He received his Ph.D. in biotechnology at the Technion-Israel Institute of Technology in 2002.  Dr. Meretski has conducted extensive research on the subject of stem cell expansion.  His research project for his Ph.D. thesis was &#147;Stationary packed bed bioreactor for propagation of transplantable human haemopoietic stem cells.&#148;  From 1995 to 1996, Dr. Meretzki was employed at the Department of Chemical Engineering at the Technion-Israel Institute of Technology.  From 1997 to 2001, he was an instructor teaching medical students cell biology and hematology at the Rappaport Faculty of Medicine in Haifa, Israel.  From 2001 to 2002, Dr. Meretzki was in charge of biological and chemical research and development for Polyheal, Ltd. in Nesher, Israel.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Yossi Keret</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Mr. Keret was appointed as our Chief Financial Officer on May 30, 2004.  Before his appointment as our Chief Financial Officer, Mr. Keret acted as the Chief Financial Officer of M.L.L. Software and Computers Industries Ltd. (TASE:MLL) where he oversaw the company's three subsidiaries. Prior to his employment at M.L.L., he was the Chief Financial Officer of Internet-Zahav Group, Ltd. (NASDAQ:IGLD) the leading Israeli ISP with revenues in excess of $45 million, 900 employees and three subsidiaries.  As the Chief Financial Officer of Top Image Systems Ltd. (NASDAQ:TISA), Mr. Keret directed all activities that led to a NASDAQ listing, formulated systems which </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 27-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>increased sales growth 60% during his 5 year term and opened branches and subsidiaries in Europe and USA . He began his career at Kost Forer and Gabai Accountants - a member of E&amp;Y International.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Mr. Keret holds a B.A. from Haifa University in Economics and Accounting, is a Certified Accountant in Israel and is working toward an MBA from Heriot-Watt University.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>John L. Bakos</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Mr. Bakos was most recently a co-founder and Vice President of Finance at Fluidnet LLC, a medical device company focused on the IV therapy device and disposable market.  He raised seed funding for Fluidnet LLC and was responsible for investors communications, business planning, and financial modeling.  From 1989 to 2001, Mr. Bakos served as an independent consultant to emerging private and public growth companies in healthcare, telecommunications, financial services, online education, manufacturing and government on issues involving finance, business planning and execution.  Mr. Bakos holds a B.A. degree and an MBA degree from Cornell University.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Doron Shorrer</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Mr. Shorrer was appointed a director on October 2, 2003.  Mr. Shorrer, ISR (CPA) was Chairman of the Board of Phoenix Insurance Company, one of the largest insurance companies in Israel and Mivtachim Pension Benefit Group, the largest pension fund in Israel. Prior to these positions, Mr. Shorrer held senior appointments that included Arbitrator at the Claims Resolution Tribunal for Dormant Accounts in Switzerland; Economic and Financial Advisor, Commissioner of Insurance and Capital Markets for the State of Israel; Member of the board of directors of "Nechasim" of the State of Israel; Member Committee for the Examination of Structural Changes in the Capital Market (The Brodet Committee); General Director of the Ministry of Transport; Co-Founder and director of an accounting firm with offices in Jerusalem, Tel-Aviv and Haifa; Member of the Lecture Staff of the Amal School Chain; Chairman of a Public Committee
for Telecommunications; and Economic Consultant to the Ministry of Energy.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Among many areas of expertise, Mr. Shorrer formulates, implements and administers business planning in the private and institutional sector in addition to consulting on economic, accounting and taxation issues to a large audience ranging from private concerns to government ministries.  Mr. Shorrer holds a B.A. in Economics and Accounting and an M.A. in Business Administration (specialization in finance and banking) from the Hebrew University of Jerusalem and is a Certified Public Accountant (ISR).</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Hava Meretzki</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Ms. Meretzki was appointed a director on October 2, 2003. Ms. Meretzki, Adv. is a partner in the law firm of Ben-Noun Meretzki in Haifa, Israel.  Ms. Meretzki specializes in civil, trade and labor law and is presently Vice-Chairman for the National Council of the Israel Bar Association.  Ms. Meretzki previously was a director of the Israel Electric Company.  Ms. Meretzki received a Bachelors Degree in Law from the Hebrew University in 1991, and in 1992 was admitted to the Israel Bar Association.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Yoram Drucker</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Mr. Drucker was appointed a director on January 26, 2005.  Mr. Drucker has been the Chief Operating Officer of Brainstorm Cell Therapeutics Inc. since November of 2004.  Before joining Brainstorm Cell Therapeutics Inc., Mr. Drucker was an independent business consultant providing consulting advice on business development, finance, strategy and operations.  From 1997 to 1998, Mr. Drucker managed a real estate brokerage firm.  From 1995 to 1996, Mr. Drucker managed his own promotion company, which created and designed marketing and promotional concepts for various companies in Israel.  From 1990 to 1995, Mr. Drucker served as a manager of the production department of one of Israel&#146;s largest diamond factories.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Israel Ben-Yoram</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 28-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Mr. Ben-Yoram was appointed a director on January 26, 2005.  Mr. Ben-Yoram has been a director and partner in the accounting firm of Mor, Ben-Yoram and Partners in Israel since 1985 to now.  This accounting firm currently employs over 15 employees in the field of auditing, consulting, and accompanying projects.  Since 1992 to now, Mr. Ben-Yoram has also served as a shareholder and the head director of Mor, Ben-Yoram Ltd., a private company in Israel in parallel to the operation of the Mor, Ben-Yoram and Partners accounting firm.  This company provides management services, economic consulting services and other professional services to businesses. Mr. Ben-Yoram received a B.A. in accounting from the University of Tel Aviv, an M.A. in Economics from the Hebrew University of Jerusalem, an LLB and an MBA from Tel Aviv University and an LLM from Bar Ilan University.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Significant Employees</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We currently do not have any significant employees aside from our directors and officers.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Family Relationships</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Shai and Hava Meretzki are husband and wife.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Involvement in Certain Legal Proceedings</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>1.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>2.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>3.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>4.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</font></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:left;'><font size=2>The following table sets forth, as of April 18, 2005, certain information with respect to the beneficial ownership of our common stock by each security holder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers.  Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated.  Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 29-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="620" style=' border-collapse:collapse; '>
    <tr>
        <td width="118" valign=top style='border:solid black .5pt;border-color:gray;  background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:  6.0pt'><br>  <b><font  size=2>Title of Class</font></b><b></b></p>  </td>
        <td width="264" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:  6.0pt'><br>  <b><font  size=2>Name and Address of Beneficial Owner</font></b><b></b></p>  </td>
        <td width="144" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><b><font size=2>Amount and Nature of Beneficial  Owner</font></b><b></b></p>  </td>
        <td width="94" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><b><font size=2>Percentage of Class</font><sup><font size=2>(1)</font></sup></b><b></b></p>  </td> </tr>
    <tr>
        <td width="118" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Common Shares</font></p> </td>
        <td width="264" style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>CEDE &amp; Co.</font><br> <font size=2>PO Box 20</font><br> <font size=2>Bowling Green Station</font><br> <font size=2>New York, NY  10004</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>16,315,470</font></p> </td>
        <td width="94" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>25.65%</font></p> </td> </tr>
    <tr>
        <td width="118" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Common Shares</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Shai Meretzki</font><br> <font size=2>38 Raul Wallenberg</font><br> <font size=2>Haifa, Israel</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>10,053,170</font><sup><font size=2> (2)</font></sup></p> </td>
        <td width="94" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>15.81%</font></p> </td> </tr>
    <tr>
        <td width="118" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Common Shares</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Joseph Corso</font><br> <font size=2>15 Ottavio Promenade</font><br> <font size=2>Staten Island, NY 10307</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>7,000,000</font></p> </td>
        <td width="94" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>11.01%</font></p> </td> </tr>
    <tr>
        <td width="118" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Common Shares</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Stonestreet Limited Partnership</font><br> <font size=2>#1300 &#150; 320 Bay Street</font><br> <font size=2>Toronto, ON M5H 4A6</font><br> <font size=2>Canada</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>4,000,000</font></p> </td>
        <td width="94" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>6.29%</font></p> </td> </tr>
    <tr>
        <td width="118" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Common Shares</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Hava Meretzki</font><br> <font size=2>38 Raul Wallenberg</font><br> <font size=2>Haifa, Israel</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>338,377 </font><sup><font size=2>(3)</font></sup></p> </td>
        <td width="94" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>0.53%</font></p> </td> </tr>
    <tr>
        <td width="118" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Common Shares</font></p> </td>
        <td width="264" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom: 6.0pt'><font size=2>Directors and Officers (as a group)</font></p> </td>
        <td width="144" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>11,005,640 </font><sup><font size=2>(4)</font></sup></p> </td>
        <td width="94" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:6.0pt'><font size=2>17.30%</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><sup><font size=2>(1)  </font></sup><font size=2> Based on 63,603,483 shares of common stock issued and outstanding as of April 25, 2005.  Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.  Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.  Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(2)</font></sup><font size=2>  4,802,000 of which are registered under the name of A.R.Y. Holdings Ltd., which are owned and controlled by Dr. Shai Meretzki.  451,170 of which are options to purchase shares of common stock granted on December 30, 2003 that are currently exercisable or exercisable within 60 days.  2,400,000 of which were granted in connection with the issuance of Notice of Allowance by the United States Patent Office for our patent application number 09/890,401.  2,400,000 of which are warrants to purchase shares of common stock granted in connection with the issuance of Notice of Allowance by the United States Patent Office for our patent application number 09/890,401. </font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(3)</font></sup><font size=2>  Representing options to purchase shares of our common stock granted on December 30, 2003 that are currently exercisable or exercisable within 60 days.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(4)</font></sup><font size=2>  614,093 of which are options to purchase shares of our common stock granted to directors and officers other than Shai Meretzki and Hava Meretzki on December 30, 2003 and other dates that are currently exercisable or exercisable within 60 days.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Changes in Control</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of our company.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DESCRIPTION OF SECURITIES</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We are authorized to issue 1,400,000,000 common shares with $0.00001 par value.  As at April 25, 2005 we had </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 30-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>63,603,483 common shares outstanding.  Upon liquidation, dissolution or winding up of the corporation, the holders of common stock are entitled to share ratably in all net assets available for distribution to security holders after payment to creditors.  The common stock is not convertible or redeemable and has no preemptive, subscription or conversion rights.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Each outstanding share of common stock is entitled to one vote on all matters submitted to a vote of security holders.  There are no cumulative voting rights.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available therefore at such times and in such amounts as our Board of Directors may from time to time determine. Holders of common stock will share equally on a per share basis in any dividend declared by the Board of Directors. We have not paid any dividends on our common stock and do not anticipate paying any cash dividends on such stock in the foreseeable future.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In the event of a merger or consolidation, all holders of common stock will be entitled to receive the same per share consideration.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our bylaws provide that directors and officers shall be indemnified by us to the fullest extent authorized by the Nevada General Corporation Law, against all expenses and liabilities reasonably incurred in connection with services for us or on our behalf if such persons acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interests, and with respect to any criminal action or proceeding, had not reasonable cause to believe his or her conduct was unlawful.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Insofar as indemnification for liabilities arising under the Securities Act might be permitted to directors, officers or persons controlling our company under the provisions described above, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Except as otherwise indicated below, we have not been a party to any transaction, proposed transaction, or series of transactions in which the amount involved exceeds $60,000, and in which, to its knowledge, any of its directors, officers, five percent beneficial security holder, or any member of the immediate family of the foregoing persons has had or will have a direct or indirect material interest.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Dr. Shai Meretzki is a signatory of the License Agreement with the Weizmann Institute of Science and the Technion-Israel Institute of Technology because he was an inventor of the technology listed in the License Agreement.  Dr. Meretzki is our Chief Executive Officer and an affiliate of our Company through his indirect acquisition of shares of our Common Stock.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The promoters of our company are our directors and officers.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DESCRIPTION OF BUSINESS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Corporate History</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We were incorporated in the State of Nevada under the name A.I. Software, Inc. on May 11, 2001 and commencing July 2001, we were engaged in software development.  Our initial business plan at the time of our incorporation was premised on the use of artificial intelligence in computer programming technology and in many areas of the computer, Internet, robotics, and games industries.  On July 1, 2001 we entered into a software development agreement with Empire Group, a software development firm, to develop for us the software algorithm program for an artificial intelligence software called "Randomix."  We were not successful in fully implementing our initial business plan in regards to our Randomix software.  As a result, during March and April of 2003, our Board of </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 31-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Directors conducted an in-depth analysis of our business plan and related future prospects for software development companies.  To better protect stockholder interests and provide future appreciation, it was decided to concurrently pursue initiatives in the biotech industry as an extension to our business.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On May 5, 2003, we entered into a License Agreement with the Weizmann Institute of Science and the Technion-Israel Institute of Technology to acquire an exclusive license for an innovative stem cell expansion technology.  This technology, if fully developed and commercialized, will offer novel solutions to make procedures like bone marrow transplants and other methods of cell therapy more accessible to patients suffering from leukemia, lymphoma, myaloma and a broad range of complicated diseases and disorders.  Under this License Agreement, we agreed to pay $400,000 cash over time and we will pay royalties on our future sales and product or rights distribution transactions.  Also, the licensors of the License Agreement has an option to assign all of their patent rights in the License Agreement to our company in exchange for an aggregate of 5% of all of the issued and outstanding share capital of our company.
This option may only be exercised within a 60-day period commencing from the date when we notify the licensors that the market capital of our company has exceeded $25,000,000.  The option will expire if it is not exercised within this period.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>To enable us to conduct further research and development of the exclusive license for the stem cell expansion technology we acquired from the Weizmann Institute of Science and the Technion-Israel Institute of Technology, on June 10, 2003 we purchased 100% of the issued and outstanding shares of a research and development company based in Israel called Pluristem, Ltd.  Pluristem, Ltd. was incorporated under the law of Israel on January 22, 2003 and has the facilities and personnel to conduct research and development in the field of stem cell research.  As consideration for the shares of Pluristem, Ltd., we paid to the shareholder of Pluristem, Ltd. cash in the amount of $1,000 and provided Pluristem, Ltd. with a line of credit in the amount of $500,000.  Accordingly, Pluristem, Ltd. became our wholly-owned subsidiary as of June 10, 2003.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On June 25, 2003, we changed our name from "A.I. Software, Inc." to "Pluristem Life Systems, Inc."  The name change was effected with the Nevada Secretary of State on June 25, 2003 and took effect with the OTCBB at the opening of trading on June 30, 2003 under our new stock symbol "PLRS".</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Our Current Business</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>With the acquisition of Pluristem, Ltd., we aim to become a leader in expansion of hematopoietic stem cells outside of the human body.  Stem cells are unspecialized cells that can renew themselves for long periods through cell division.  Scientists have developed sufficient fundamental understanding to use stem cells for cell therapy and bone marrow transplants for the potential treatment of a broad range of complicated diseases.  Cell therapy is the use of living cells in the treatment of medical disorders.  Cell therapy is still in its beginning stages of research and development and only a few potential products are already in clinical studies.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We plan to specialize initially in the expansion of hematopoietic stem cells found in umbilical cord blood, using the technology platform we acquired under the License Agreement with the Weizmann Institute of Science and the Technion-Israel Institute of Technology.  We intend to improve this technology platform and develop it into a functional stem cell expansion system that we can sell or license to other research laboratories, umbilical cord blood banks, or clinics in the future.  We have named this system the PluriX&#153; Bioreactor system.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Brief Introduction on Stem Cell Research and Cell Therapy</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Since 1998, when embryonic human stem cells were first isolated, research on stem cells has received much public attention.  Stem cells have two important characteristics that distinguish them from other types of cells.  First, they are unspecialized cells that renew themselves for long periods through cell division.  Second, under certain physiologic or experimental conditions, stem cells can be induced to become cells with special functions, such as the beating cells of the heart muscle or the insulin-producing cells of the pancreas. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Scientists primarily work with two kinds of stem cells from animals and humans: embryonic stem cells and adult stem cells, which have different functions and characteristics.  In some adult tissues, such as bone marrow, muscle, and brain, discrete populations of adult stem cells generate replacements for cells that are lost through normal wear </font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>and tear, injury, or disease.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Cell therapy is the use of living cells in the treatment of medical disorders.  Stem cells, progenitors and differentiated functional cells of various tissues are evolving as potential treatment modality for life threatening diseases and major clinical indications lacking effective cures.  Cell therapy is still in its beginning stages of research and development and only a few potential products are already in clinical studies.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Even though we have the capability to work with embryonic stem cells, we have chosen to concentrate our efforts on hematopoietic stem cells.  Hematopoietic stem cells can be found in every adult's bone marrow, which is the spongy tissue found in the cavities of our bones.  Hematopoietic stem cells are the precursors of the various types of blood cells in the human body.  These cells include: </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>White cells that fight infections and inflammations (leukocytes) and form the basis of the immune system (lymphocytes); </font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Red cells that carry oxygen through our bodies (erythrocytes); and</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Platelets that help blood to clot.</font></p> </td>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Scientists have developed sufficient understanding to actually use hematopoietic stem cells for therapy, such as through the procedure of bone marrow transplant.  Thus, this class of human stem cell holds the promise of being able to repair or replace cells or tissues that are damaged or destroyed by many of our most devastating diseases and disabilities.  Furthermore, bone marrow transplants are ultimate treatments in many pathological disorders, including: </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Malignant blood system diseases, such as leukemia, lymphoma and myaloma,</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Diseases characterized by the lack of, or defective, production of bone marrow, such as aplastic anemia,</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Severe combined immune deficiency,</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non-hematopoietic malignancies (solid tumors), or bone marrow disorders, following chemotherapy and radiation, and</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Metabolic diseases or congenital hemoglobinopathies, such as thalessemia.</font></p> </td>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>For stem cell transplants to succeed, the donated stem cells must repopulate and/or engraft the recipient's bone marrow, where they will provide a new source of essential blood and immune system cells.  Within the hematopoietic cell system, only a special type of stem cells called pluripotent hematopoietic stem cells have extensive capacities to expand, differentiate and self-renew.  Accordingly, pluripotent hematopoietic stem cells are exclusively required for repopulation and engraftment of donated stem cells following transplantation.  In spite of the key role of pluripotent hematopoietic stem cells in maintaining the hematopoietic cell system, they appear in extremely low frequency in the bone marrow tissue.  The current technology limitation on maintaining or expanding undifferentiated stem cells outside of human body is a major drawback to essential clinical applications of these cells.  This current
unavailability of technology to expand the number of stem cells outside of human body reflects the need for novel stem cell regulators.  However, in spite of all the challenges involved in hematopoietic stem cell transplants, physicians are now trying, sometimes successfully, to assist in hematopoietic and immune system recovery following high-dose chemotherapy and/or radiation therapy treatment for malignant and non-malignant diseases such as leukemia and certain immune and genetic disorders.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Brief Introduction on Bone Marrow Transplants</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Bone marrow transplantation is a relatively new medical procedure being used to treat diseases once thought incurable.  Since its first successful use in 1968, bone marrow transplants have been used to treat patients diagnosed </font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>with leukemia, aplastic anemia, lymphomas such as Hodgkin's disease, multiple myeloma, immune deficiency disorders and some solid tumors such as breast and ovarian cancer.  The bone marrow transplant procedure generally involves three phases.  In the first phase, lasting 5 to 14 days, the bone marrow recipient is prepared for the graft.  Immunosuppressive and cytotoxic chemotherapy administered with or without irradiation are used to enable the recipient to accept the graft, to prevent graft rejection, and in cases of acute leukemia, to eliminate residual leukemia.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In the second phase, bone marrow is procured from a compatible donor and intravenously administered to the graft recipient. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The third phase is a period of waiting for the bone marrow to engraft and function normally in the recipient.  During the time required for engraftment (approximately 2 to 4 weeks), the graft recipient is vulnerable to infection, bleeding, severe weight loss, rejection of the graft and graft-versus-host disease.  Graft-versus-host disease occurs in approximately 50% of bone marrow transplant patients.  If the marrow engrafts and the patient survives the immediate post-transplant period (first 3 to 6 weeks), the patient faces another set of complications, including graft-versus-host disease and interstitial pneumonia.  Interstitial pneumonia occurs in 60% of bone marrow transplant patients, typically 4 to 6 weeks post transplant.  The disease progresses rapidly and is fatal in approximately 50% of the cases.  50%-60% of patients survive where the bone marrow transplant is made during disease remission, and
only 10%-25% survive in cases where the bone marrow transplant is done outside of remission.  (Source: The Cost Effectiveness of BMT Therapy and Its Policy Implications, School of Public Health, UCLA).</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>There are several types of bone marrow transplants.  They are distinguished according to the source of the stem cells.  An autologus bone marrow transplant means the transplant stem cells come from the patient.  An allogenic bone marrow transplant means the stem cells come from a donor.  A syngeneic bone marrow transplant means the stem cells come from an identical twin. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Research and clinical work in the field of bone marrow transplants is presently limited due to: </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The average number of active pluripotent hematopoietic stem cells in any given bone marrow is extremely low, less than 0.5% of total mononuclear cells;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The difficulties of the human body to accept bone marrow transplants from donors, and the ensuing damaging reactions;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The patient is quite prone to infections following radiation and/or chemotherapy treatments, and may have been infected even prior to the transplant; </font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sorting of healthy cells from cancerous cells has not proven 100% successful;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The great complications in storing and enriching these cells in the absence of </font><i><font size=2>in vitro</font></i><font size=2> differentiation;</font></p> </td>
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        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The absence of a large-scale and sustainable model that enables the testing of the ability of hematopoietic stem cells to renew the hematopoietic cell system; and </font></p> </td> </tr>
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        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>There are some clinical situations where autologus bone marrow after tumor purging provides insufficient numbers of hematopoietic stem cells for the bone marrow transplant.</font></p> </td> </tr>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Transplantation experts believe that the ideal approach to a successful stem cell transplant is to use a large number of stem cells to maximize the probability of bone marrow repopulation and minimize the time needed for the return of normal numbers of hematopoietic and immune cells in the patient.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>One of the major efforts in developing hematopoietic stem cell technologies has been to identify new and better sources for stem cells.  The majority of transplantable hematopoietic stem cells in adults currently come primarily from peripheral blood or adult donor bone marrow.  Another important and attainable source of transplantable and </font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>lasting hematopoietic stem cells is from umbilical cord blood.  Such blood is drawn from the umbilical cord after birth, but before the discharge of the placenta, giving way to the following advantages:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The standard procedure at birth is that umbilical cord blood is discarded with the placenta.  No morbidity is involved, making this option free of ethical controversy.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Collection of umbilical cord blood is simple and non-invasive both to the mother and the baby;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Use of umbilical cord blood is already approved by the Federal Drug Administration and does not require further clinical testing;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The hematopoietic stem cells drawn from umbilical cord blood can differentiate into primary hematopoietic precursors and create hematopoietic clones in cultures better than those hematopoietic stem cells taken from adult bone marrow; </font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Umbilical cord blood has lower levels of contamination with common viral pathogens, such as Cytomegalovirus, and is more tolerant of alloantigens; and</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Umbilical cord blood hematopoietic stem cells have high tolerance levels, giving way to lower graft-versus-host diseases.</font></p> </td> </tr>
    <tr>
        <td width="24" ></td>

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        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>It is important to note that scientists have found no difference in the functionality of hematopoietic stem cells drawn from bone marrow, peripheral blood or umbilical cord blood.  However, owing to the small volume of blood collected from umbilical cords (typically less than 100 ml), use of umbilical cord blood has been limited to date to transplants in babies and children weighing less than 45 kg.  Moreover, there are no existing hematopoietic stem cell expansion technologies for umbilical cord blood that can increase to the best of our knowledge the number of hematopoietic stem cells without causing differentiation of the hematopoietic stem cells.  Once the hematopoietic stem cells have differentiated, they cannot be transplanted into the patient.  Therefore, the development of a system that will facilitate the proliferation of hematopoietic stem cells in an appropriate culture media or substrate could
enable the use of such hematopoietic stem cells drawn from umbilical cord blood for transplanting in adults where insufficient hematopoietic stem cells are available. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In summary, transplants of hematopoietic stem cells derived from umbilical cord blood are a novel alternative to conventional bone marrow transplants and have several unique advantages, in spite of their present quantitative limitations.  Umbilical cord blood lends itself to sorting and storing in cord blood banks and transplant clinics, leading to the ability to build data bases of expanded umbilical cord blood for national and worldwide access and use, making search of bone marrow transplant donors easily facilitated and making autologus bone marrow transplants in adults potentially feasible.  We believe that the advantages in use of umbilical cord blood hematopoietic stem cells, combined with our platform technology have the potential to change the ways bone marrow transplants are conducted in the future.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Our Core Technology &#150; the PluriX&#153; Bioreactor System</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>For decades, scientists have attempted to "grow" stem cells outside of human body in culture to increase the number of stem cells for transplantation.  The challenge of this undertaking lies in overcoming stem cells' predisposition to differentiate.  Adult hematopoietic stem cells tend to produce other cells with limited repopulating properties when grown in culture rather than to replicate and regenerate additional stem cells.  Current stem cell expansion techniques are complicated by the diverse mix of differentiated cells generated in stem cell cultures.  Existing scientific methods considered in increasing the number of stem cells include culturing the stem cells on two dimensional stromal layers and growing in the presence of cytokines.  To the best of our knowledge, none of these existing methods to grow stem cells outside of patients' bodies are able to prevent differentiation of stem cells while
promoting their proliferation.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Through the License Agreement we entered with the Weizmann Institute of Science and the Technion-Israel </font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Institute of Technology, we acquired an exclusive license for an innovative stem cell expansion technology.  This technology, if fully developed and commercialized, will offer novel solutions to expand hematopoietic stem cells taken from umbilical cord blood.  We intend to improve this technology and develop it into a functional stem cell expansion system that we can sell or license to other research laboratories, umbilical cord blood banks, or clinics in the future.  We have named this system the PluriX&#153; Bioreactor system.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The PluriX&#153; Bioreactor system is a system of stromal cell cultures and substrates that create an artificial physiological environment in which hematopoietic stem cells can grow and reproduce outside of the human body.  The system recreates the environment which exists in human bones, in which stem cells reproduce in nature.  The stem cells are &#147;tricked&#148; into growing and reproducing in the PluriX&#153; Bioreactor in the same way they would in living bone, and because the size and scale of the PluriX&#153; Bioreactor can be much bigger than a human bone, the stem cell growth can be greatly expanded.  We expect that the three dimensional PluriX&#153; Bioreactor system has the potential to bring about the expansion of umbilical cord blood hematopoietic stem cells to proportions that will be enough for a number of adult transplants, without promoting differentiation. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We are designing and developing the PluriX&#153; Bioreactor system to perform controlled expansion of hematopoietic stem cells for bone marrow transplants.  The general idea is to cause self-renewal of early stage stem cells and prevent them from differentiating through use of the PluriX&#153; Bioreactor system.  The PluriX&#153; Bioreactor system creates an artificial physiological environment in which hematopoietic stem cells can grow and reproduce.  This system is in direct contrast to standard teflon bags or culture flasks, which cannot promote hematopoietic stem cells self-renewal and prevent their differentiation.  In the PluriX&#153; Bioreactor system, hematopoietic stem cells are influenced by contact with the surrounding environment, made up of stromal cell cultures and substrates.  Therefore, by keeping the hematopoietic stem cells in the closed environment of the PluriX&#153; Bioreactor system, the
hematopoietic stem cells maintain their original form, which means that they can proliferate without differentiating.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We believe that the PluriX&#153; Bioreactor system, once fully developed, will</font><i><font size=2> </font></i><font size=2>enable the production of certain stem cells, such as umbilical cord blood hematopoietic stem cells, for which there might otherwise be insufficient quantities available for many transplants. </font><i><font size=2> </font></i><font size=2>Having access to a sufficient number of hematopoietic stem cells is essential to successful clinical outcomes.  This is particularly the case with umbilical cord blood transplants.  The limited quantities of available hematopoietic stem cells in umbilical cord blood and difficulties in expanding the starting volumes to therapeutic quantities have restricted the widespread practice of umbilical cord blood transplants.  The PluriX&#153; Bioreactor system is designed to solve this dilemma by providing the capability to easily and cost-effectively expand
umbilical cord blood hematopoietic stem cells to higher quantities for therapeutic treatments. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The PluriX&#153; Bioreactor system is comprised of several components, including </font><i><b><font size=2> </font></b></i><font size=2>(1) a reservoir, (2) gas mixture, (3) a gas filter, (4) an injection point, (5) a Plug Flow Bioreactor, (6) a flow monitor and a flow valve, (7) a separating container, (8) a container for medium exchange, (9) a peristaltic pump, (10) a sampling point, (11) a container for medium exchange and (12) an oxygen monitor.  The PluriX&#153; Bioreactor system is designed to be operated with minimal operator activity by a medical or laboratory technician.  Operation of the PluriX&#153; Bioreactor system is intended to be relatively simple, and therefore, a trained lab technician will be able to operate and monitor between 10 to 20 PluriX&#153; Bioreactor systems at any one time.  In other words, one lab technician will operate 70 to 100 PluriX&#153; Bioreactor systems per year.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Primary Advantages of PluriX&#153; Bioreactor System</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We believe our core technology, the PluriX&#153; Bioreactor system, once fully developed, will have the following advantages:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Our PluriX&#153; Bioreactor system can be used to expand umbilical cord blood hematopoietic stem cells for use in adult transplants.  With the assistance of our PluriX&#153; Bioreactor system, one portion of umbilical cord blood hematopoietic stem cells can be expanded to quantities enough for a number of transplants.  This means that healthy autologus umbilical cord blood hematopoietic stem cells can be taken at the time of birth, expanded into mature hematopoietic stem cells and stored by a cell bank in the instance that it may be needed by that specific </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in;text-align:left;'><font size=2>patient at a later date.  This will eliminate the current practice of transplanting cancerous cells back into the patient.  </font></p>


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    <tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Our PluriX&#153; Bioreactor system can be used for allogenic expansion, i.e. to expand the hematopoietic stem cells from donors other than the patient himself.  Allogenic stem cells can also be expanded for use as a transplant source for adults in the instances that enough stem cells are not attainable from a particular donor.</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Our PluriX&#153; Bioreactor system can also be used for autologus proliferation, i.e. to expand the hematopoietic stem cells taken from the transplant patients themselves.  Contrary to any existing available technologies known to us, our PluriX&#153; Bioreactor system will allow the use of autologus bone marrow transplantation in the case that healthy cells are not clearly attainable from the patient. </font></p> </td> </tr>
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        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Our PluriX&#153; Bioreactor system can be used to produce a high number of hematopoietic stem cells, which will result in increased potential for faster, successful engraftment of stem cells in transplant patients. </font></p> </td> </tr>
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        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By making the option of expanding hematopoietic stem cells taken from transplant patients themselves available, we believe that costs related to donor searches for bone marrow transplants will be reduced significantly;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>We believe that our PluriX&#153; Bioreactor system may produce by-products that will speed up the recovery time of transplant patients, thereby reducing the number of hospitalization days needed.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Alongside our research process on the PluriX&#153; Bioreactor system, we have also identified characterization processes of new proteins that are important to the differentiation of stem cells, both within and without patients' bodies.  We plan to continue in the cleaning and characterization of these proteins with the intention of making them into commercial products.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Markets for Our Product and Services</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>There are presently between 40,000 to 50,000 bone marrow transplants performed annually</font><b><font size=2> </font></b><font size=2>worldwide.  Approximately 18,000 of these bone marrow transplants are performed in the United States and approximately 25,000 are performed in Europe.  We have not taken steps to determine the number of bone marrow transplants performed elsewhere.  Of the 40,000 to 50,000 bone marrow transplants performed, only 5,000 are performed on babies and children.  Furthermore, most of these 40,000 to 50,000 bone marrow transplants are allogeneic transplants, requiring patients to locate donors with compatible hematopoietic stem cells.  Based on the fact that only one in three patients actually finds a compatible donor, we estimate that the number of potential bone marrow transplants should exceed 150,000 annually.  Based on these statistics, we believe that the existing methods of
transplanting human bone marrow have not been perfected and are far from reaching an ideal level of success.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Presently, the standard bone marrow transplant procedure costs approximately $100,000 per patient.  This translates into approximately $5 billion annually</font><b><font size=2> </font></b><font size=2>that patients and their medical insurers around the world are spending currently for this procedure alone.  In addition, to manage the risk of incompatibility between donor and patient stem cells, a separation procedure of the stem cells is frequently also performed at a cost of $70,000.  We believe that 15% to 20%, or 15,000 to 20,000 of the patients require this stem cell separation procedure as well, adding a further $700 million to the current spending on bone marrow transplants in the United States.  Combining these figures with similar expenditures in Europe and Asia, we estimate the current worldwide spending on bone marrow transplants to exceed $7 billion per year.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We estimate that there are between 50 to 100 cord blood banks in the world, most of them located in the United States.  In 2001, they collective cryo-preserved (frozen) and stored cord blood from some 34,000 to 36,000 donors and they project that the annual rate of growth of cord blood preserved will be over 15%.  Due to the increased use of umbilical cord blood hematopoietic stem cells in bone marrow transplants, we expect that the number of cord blood banks will also grow significantly around the world.  We also expect that, in developed countries, in the near future, umbilical cord blood may be drawn at the time of every birth and stored for later use.  We believe that the </font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>stem cell expansion technology that we will make available through our PluriX&#153; Bioreactor system, together with proper marketing efforts, will increase the number of umbilical cord blood donors for personal use, i.e., parents storing the umbilical cord blood for their children's future, by increasing the existing growth rate.  This will also provide a full base of hematopoietic stem cells donor opportunities to patients throughout the world.  We project that the global market for the provision of stem cell expansion services can reach approximately $8 billion.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Intellectual Property</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our success will depend in part on our ability, and the ability of our licensors, to obtain patent protection for our technology and processes we acquired under the License Agreement with the Weizmann Institute of Science and the Technion-Israel Institute of Technology.  Under the License Agreement we have exclusive rights to the technology covered a patent application entitled "Method and Apparatus for Maintenance and Expansion of Hematopoietic Stem Cells and/or Progenitor Cells" filed with the World Intellectual Property Organization under the Patent Cooperation Treaty (PCT) patent number PCT/US00/02688.  Corresponding patent application have also been filed in a number of countries including the United States under patent application number 09/890,401.  On January 4, 2005, we received notice from the U.S. Patent and Trademark Office that it has allowed the U.S. patent application number 09/890,401, but
changing the title of the patent from &#147;Method and Apparatus for Maintenance and Expansion of Hemopoietic Stem Cells and/or Progenitor Cells&#148; to &#147;Method of Producing Undifferentiated Hemopoietic Stem Cells Using a Stationary Phase Plug-Flow Bioreactor.&#148;  This patent allowance provides coverage to our concept of creating a three-dimensional bone-like environment that supports stem cell expansion without differentiation.  Our other issued patent presents claims to: (i) certain apparatus for cell culturing, including a bioreactor suitable for culturing human hematopoietic stem cells or hematopoietic progenitors cells; (ii)three dimensional stromal cells based bioreactor.  A patent was issued in South Africa in October, 2002, and is due to expire in approximately 2020.  Patents were approved in Australia and New Zealand in July 2003 and are due to expire in approximately 2020.  In addition, we and our exclusive licensors plans to file applications for patents in the
United States and equivalent applications in certain other countries claiming other aspects of our technology and processes, including a number of U.S. patent applications and corresponding applications in other countries relating to various components of the PluriX&#153; Bioreactor system. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The validity and breadth of claims in medical technology patents involve complex legal and factual questions and, therefore, may be highly uncertain.  No assurance can be given that any patents based on pending patent applications or any future patent applications by us, or our licensors, will be issued, that the scope of any patent protection will exclude competitors or provide competitive advantages to us, that any of the patents that have been or may be issued to us or our licensors will be held valid if subsequently challenged or that others will not claim rights in or ownership of the patents and other proprietary rights held or licensed by us.  Furthermore, there can be no assurance that others have not developed or will not develop similar products, duplicate any of our technology or design around any patents that have been or may be issued to us or our licensors.  Since patent applications in the
United States are maintained in secrecy until patents issue, we also cannot be certain that others did not first file applications for inventions covered by our, and our licensors' pending patent applications, nor can we be certain that we will not infringe any patents that may be issued to others on such applications. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We rely on the license granted by Weizmann Institute of Science and Technion-Israel Institute of Technology and others for the patent rights related to our core technology, the PluriX&#153; Bioreactor system.  If we breach the License Agreement or otherwise fail to comply with the License Agreements, or if the License Agreement expires or is otherwise terminated, we may lose our rights in such patents, which would have a material adverse affect on our business, financial condition and results of operations. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We applied for a U.S. Trademark on the word "PluriX" on June 22, 2003.  The application has been reviewed by the assigned examining attorney of the U.S. Patent and  Trademark office.  No objections were lodged, although additional information was requested.  We submitted a response on February 17, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We also rely on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements.  It has not been, but is now our intended policy to require our employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers, board of directors, technical review board and other advisors to execute confidentiality agreements upon the commencement of employment or consulting </font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>relationships with us.  These agreements will provide that all confidential information developed or made known to the individual during the course of the individual's relationship with us is to be kept confidential and not disclosed to third parties except in specific limited circumstances.  We also will commence to require signed confidentiality or material transfer agreements from any company that is to receive our confidential information.  In the case of employees, consultants and contractors, the agreements will generally provide that all inventions conceived by the individual while rendering services to us shall be assigned to us as the exclusive property of Pluristem, Ltd.  There can be no assurance, however, that all persons who we desire to sign such agreements will sign, or if they do, that these agreements will not be breached, that we would have adequate remedies for any breach, or that our trade
secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our success will also depend in part on our ability to commercialize our technology without infringing the proprietary rights of others.  We have not conducted freedom of use patent searches and no assurance can be given that patents do not exist or could not be filed which would have an adverse affect on our ability to market our technology or maintain our competitive position with respect to our technology.  If our technology components, devices, designs, products, processes or other subject matter are claimed under other existing United States or foreign patents or are otherwise protected by third party proprietary rights, we may be subject to infringement actions.  In such event, we may challenge the validity of such patents or other proprietary rights or we may be required to obtain licenses from such companies in order to develop, manufacture or market our technology.  There can be no assurances that we
would be able to obtain such licenses or that such licenses, if available, could be obtained on commercially reasonable terms.  Furthermore, the failure to either develop a commercially viable alternative or obtain such licenses could result in delays in marketing our proposed technology or the inability to proceed with the development, manufacture or sale of products requiring such licenses, which could have a material adverse affect on our business, financial condition and results of operations.  If we are required to defend ourselves against charges of patent infringement or to protect our proprietary rights against third parties, substantial costs will be incurred regardless of whether we are successful.  Such proceedings are typically protracted with no certainty of success.  An adverse outcome could subject us to significant liabilities to third parties and force us to curtail or cease our development and commercialization of our technology.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Research and Development</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Foundational Research</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>For the last five years, our Chief Executive Officer, Dr. Shai Meretzki, has made the initial strides in the development of our core technology, the PluriX&#153; Bioreactor system.  Research was performed by Dr. Meretzki and his team in the laboratory of Dr. Shosh Merchav at the Technion - Israel Institute of Technology's Rappaport Faculty of Medicine.  Dr. Meretzki also worked in close collaboration with Professor Dov Zipori and Dr. Avinoam Kadouri, both from the Weizmann Institute of Science.  Professor Zipori specializes in cultures and stromal cells and Dr. Kadouri specializes in the planning and creation of bioreactors.  Special carriers were used in our research and development process.  In addition, this foundational research was conducted in joint cooperation with the laboratory of SCID-NOD mice at the Weizmann Institute of Science and with Plumacher Laboratories in Rotterdam.  To this end, Plumacher
Laboratories allocated a research physician to the project for over two years.  The technology resulting from this research is the subject of our License Agreement (see &#147;Intellectual Property&#148;).</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Ongoing Research and Development Plan</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>For the next three to four years, we intend to continue developing our stem cell expansion technology based on the PluriX&#153; Bioreactor system, which will consist of four broad stages:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>3D Stroma Culture Optimization &#150; During this stage, we are collecting stroma cells from donor bone marrow and growing them within the PluriX&#153; 3-D culture.  We intend to focus on optimizing the capacity of the PluriX&#153; system to support the growth and long-term maintenance of our high-density three dimensional stromal cells cultures.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Stem-cells/Stromal cells Co-Culture Development &amp; Optimization - At this stage we intend to focus on the establishment of the PluriX&#153; Bioreactors containing high-density cell and pluripotent hematopoietic stem cells co-</font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>cultures; maintenance of common cells on high-density cell-coated carriers and testing of expanded stem cells outside a host body using mice without immune systems repopulating cells assay.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Characterization &amp; Protein Analysis - At this stage we intend to focus on the analysis of activity in media conditioned by the high-density cell cultures in the PluriX&#153; Bioreactor systems; expansion standardization of pluripotent hematopoietic stem cells and hematopoietic progenitors in the PluriX&#153; Bioreactor system and comparison to expansion in standard stromal cell cultures and analysis of protein content expressed in PluriX&#153; cell cultures by two-dimensional electrophoresis.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Regulatory Approval - We intend to prepare and file with the Food and Drug Administration and other relevant health authorities an Investigational New Drug or an Investigational Device Exemption application to initiate human clinical trials designed to demonstrate the safety, efficacy and clinical benefits of selectively expanded stem cell populations from umbilical cord blood.  All research and development activities will be carried out under the advice of a Food and Drug Administration advisor.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Employees</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We presently have nine employees in Research &amp; Development and five employees in management through our wholly owned subsidiary, Pluristem, Ltd. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Competition</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The biotechnology and medical device industries are characterized by rapidly evolving technology and intense competition.  Our competitors include major pharmaceutical, medical device, medical products, chemical and specialized biotechnology companies, many of which have financial, technical and marketing resources significantly greater than ours.  In addition, many biotechnology companies have formed collaborations with large, established companies to support research, development and commercialization of products that may be competitive with ours.  Academic institutions, governmental agencies and other public and private research organizations are also conducting research activities and seeking patent protection and may commercialize products on their own or through joint ventures.  We are aware of certain other products manufactured or under development by competitors that are used for the prevention or
treatment of certain diseases and health conditions that we have targeted for product development.  There can be no assurance that developments by others will not render our technology obsolete or noncompetitive, that we will be able to keep pace with new technological developments or that our technology will be able to supplant established products and methodologies in the therapeutic areas that are targeted by us.  The foregoing factors could have a material adverse affect on our business, financial condition and results of operations. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our competition will be determined in part by the potential indications for which our technology is developed and ultimately approved by regulatory authorities.  In addition, the first product to reach the market in a therapeutic or preventive area is often at a significant competitive advantage relative to later entrants to the market.  Accordingly, the relative speed with which we, or our potential corporate partners, can develop products, complete the clinical trials and approval processes and supply commercial quantities of the products to the market are expected to be important competitive factors.  Our competitive position will also depend on our ability to attract and retain qualified scientific and other personnel, develop effective proprietary products, develop and implement production and marketing plans, obtain and maintain patent protection and secure adequate capital resources.  We expect our
technology, if approved for sale, to compete primarily on the basis of product efficacy, safety, patient convenience, reliability, value and patent position. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We believe we compete with the following larger and more established specialized biotechnology companies that are developing devices and products to be used for the prevention or treatment of certain diseases and health conditions that we have targeted for product development:  Aastrom Biosciences, Inc., ViaCell Inc., Gamida-Cell Ltd., Advanced Cell Technology, Inc., BioTransplant Inc.,</font><b><font size=2> </font></b><font size=2>and CellGenix.  However, to the best of our knowledge none of these companies have developed a platform that can support expansion of hematopoietic stem cells without promoting their differentiation in cytokines free conditions.  </font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Once fully developed, we intend to market our technology, the PluriX&#153; Bioreactor system, to research laboratories, clinics and umbilical blood banks primarily in the United States and in Europe.  Accordingly, we believe our research and development activities and the manufacturing and marketing of our technology are subject to the laws and regulations of governmental authorities in the United States and other countries in which our technology will be marketed.  Specifically, in the United States, the Food and Drug Administration, among other agencies, regulates new product approvals to establish safety and efficacy of these products.  Governments in other countries have similar requirements for testing and marketing. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Regulatory Process in the United States</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Regulatory approval of new medical devices and biological products is a lengthy procedure leading from development of a new product through pre-clinical and clinical testing.  This process takes a number of years and requires the expenditure of significant resources.  There can be no assurance that our technology will ultimately receive regulatory approval. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We may develop our PluriX&#153; Bioreactor system into a GMP-compliant cell culture system for production of</font><i><font size=2> </font></i><font size=2>human cells outside of the human body to be sold for therapeutic applications.  &#147;GMP&#148; is a standard set for laboratories by the World Health Organization and other health regulatory authorities.  Therefore, to a certain degree, the manner in which the Food and Drug Administration will regulate our PluriX&#153; Bioreactor system is uncertain.  While normally there is extreme caution in allowing matter to be transplanted into the human body, the severity of the diseases our applications will treat may result in certain leniency from the Food and Drug Administration for terminally ill patients (see &#147;Product Approval&#148;).</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We understand that the Food and Drug Administration is still in the process of developing its requirements with respect to somatic cell therapy and gene cell therapy products and has issued draft documents concerning the regulation of cellular and tissue-based products.  If the Food and Drug Administration adopts the regulatory approach set forth in the draft document, the Food and Drug Administration will require regulatory approval for certain human cellular or tissue based products, including cells produced in the PluriX&#153; Bioreactor system, through a biologic license application. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In addition, the output of expanded human stem cells from our PluriX&#153; Bioreactor system is potentially subject to regulation as medical products under the Federal Food, Drug and Cosmetic Act, and as biological products under the Public Health Service Act.  Different regulatory requirements may apply to our technology depending on how they are categorized by the Food and Drug Administration under these laws. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Furthermore, the Food and Drug Administration has published regulations which require registration of certain facilities, which may include our future clinics, and is in the process of publishing regulations for the manufacture or manipulation of human cellular or tissue based products which may impact our future clinics. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Regardless of how our technology is regulated, the Federal Food, Drug, and Cosmetic Act and other Federal statutes and regulations govern or influence the research, testing, manufacture, safety, labeling, storage, record-keeping, approval, distribution, use, reporting, advertising and promotion of our future products.  Noncompliance with applicable requirements can result in civil penalties, recall, injunction or seizure of products, refusal of the government to approve or clear product approval applications or to allow us to enter into government supply contracts, withdrawal of previously approved applications and criminal prosecution. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Product Approval</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We are currently only in the developmental stage of our technology, PluriX&#153; Bioreactor system and have not begun the process of seeking regulatory approval from the Food and Drug Administration.  Once our PluriX&#153; Bioreactor system is fully developed, we intend to consult with a Food and Drug Administration advisor to assist us in determining our path in the process toward gaining regulatory approval from the Food and Drug Administration.  Obtaining regulatory approval of new medical devices and biological products from the Food and Drug </font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Administration is a lengthy procedure leading from development of a new product through pre-clinical and clinical testing.  This process takes a number of years and requires the expenditure of significant resources.  There can be no assurance that our technology will ultimately receive regulatory approval.  We summarize below our understanding of the regulatory approval requirements that may be applicable to us if we begin the process of seeking an approval from the Food and Drug Administration.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Generally, in order to obtain an approval from the Food and Drug Administration of a new medical product, an applicant must submit proof of safety and efficacy.  In some cases, such proof entails extensive pre-clinical and clinical laboratory tests.  The testing, preparation of necessary applications and processing of those applications by the Food and Drug Administration is expensive and may take several years to complete.  There can be no assurance that the Food and Drug Administration will act favorably or in a timely manner in reviewing submitted applications, and an applicant may encounter significant difficulties or costs in its efforts to obtain Food and Drug Administration approvals, in turn, which could delay or preclude the applicant from marketing any products it may develop.  The Food and Drug Administration may also require post-marketing testing and surveillance of approved products, or place
other conditions on the approvals.  These requirements could cause it to be more difficult or expensive to sell the products, and could therefore restrict the commercial applications of such products.  Product approvals may be withdrawn if compliance with regulatory standards is not maintained or if problems occur following initial marketing.  For patented technologies, delays imposed by the governmental approval process may materially reduce the period during which an applicant will have the exclusive right to exploit such technologies. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>If human clinical trials of a proposed medical product are required, the manufacturer or distributor of the product will have to file an Investigational Device Exemption or Investigational New Drug submission with the Food and Drug Administration prior to commencing human clinical trials.  The submission must be supported by data, typically including the results of pre-clinical and laboratory testing.  Following submission of the Investigational Device Exemption or Investigational New Drug, the Food and Drug Administration has 30 days to review the application and raise safety and other clinical trial issues.  If an applicant is not notified of objections within that period, clinical trials may be initiated, and human clinical trials may commence at a specified number of investigational sites with the number of patients approved by the Food and Drug Administration. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The Food and Drug Administration categorizes medical devices into three regulatory classifications subject to varying degrees of regulatory control.  In general, Class I devices require compliance with labeling and record keeping regulations, Quality System Regulation, 510(k) pre-market notification, and are subject to other general controls.  Class II devices may be subject to additional regulatory controls, including performance standards and other special controls, such as post-market surveillance.  Class III devices, which are either invasive or life-sustaining products, or new products never before marketed (for example, non-"substantially equivalent" devices), require clinical testing to demonstrate safety and effectiveness and the approval of the Food and Drug Administration prior to marketing and distribution.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Because the technology represented by our PluriX&#153; Bioreactor system has never before been marketed, we believe that our PluriX&#153; Bioreactor system, if successfully developed, will be classified as Class III medical devices and be subject to the requirements of clinical testing to demonstrate safety and effectiveness and the approval of the Food and Drug Administration prior to marketing and distribution.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In addition, we, and any contract manufacturer, may be required to be registered as a medical device manufacturer with the Food and Drug Administration.  These manufacturers will be inspected on a routine basis by the Food and Drug Administration for compliance with the Food and Drug Administration's Quality System Regulations.  The regulations of the Food and Drug Administration would require that we, and any contract manufacturer, design, manufacture and service products and maintain documents in a prescribed manner with respect to manufacturing, testing, distribution, storage, design control and service activities.  The Medical Device Reporting regulation requires that we provide information to the Food and Drug Administration on deaths or serious injuries alleged to be associated with the use of our devices, as well as product malfunctions that are likely to cause or contribute to death or serious injury
if the malfunction were to recur.  In addition, the Food and Drug Administration prohibits a company from promoting an approved device for unapproved applications and reviews company labeling for accuracy. </font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Also, if we are able to successfully develop our PluriX&#153; Bioreactor system, we believe that the stem cells produced in the PluriX&#153; Bioreactor system may be regulated by the Food and Drug Administration as a licensed biologic, although there can be no assurance that the Food and Drug Administration will not choose to regulate these stem cells in a different manner.  The Food and Drug Administration categorizes human cell or tissue based products as either minimally manipulated or more than minimally manipulated, and has proposed that more than minimally manipulated products be regulated through a "tiered approach intended to regulate human cellular and tissue based products only to the extent necessary to protect public health." For products which may be regulated as biologics, the Food and Drug Administration requires: (i) preclinical laboratory and animal testing; (ii) submission to the Food and
Drug Administration of an Investigational Device Exemption or Investigational Device Exemption New Drug application which must be effective prior to the initiation of human clinical studies; (iii) adequate and well-controlled clinical trials to establish the safety and efficacy of the product for its intended use; (iv) submission to the Food and Drug Administration of a biologic license application; and (v) review and approval of the biologic license application as well as inspections of the manufacturing facility by the Food and Drug Administration prior to commercial marketing of the product. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Generally, pre-clinical testing covers laboratory evaluation of product chemistry and formulation as well as animal studies to assess the safety and efficacy of the product.  The results of these tests are submitted to the Food and Drug Administration as part of the Investigational Device Exemption.  Following the submission of an Investigational Device Exemption, the Food and Drug Administration has 30 days to review the application and raise safety and other clinical trial issues.  If an applicant is not notified of objections within that period, clinical trials may be initiated.  Clinical trials are typically conducted in three sequential phases.  Phase I represents the initial administration of the drug or biologic to a small group of humans, either healthy volunteers or patients, to test for safety and other relevant factors.  Phase II involves studies in a small number of patients to assess the efficacy
of the product, to ascertain dose tolerance and the optimal dose range and to gather additional data relating to safety and potential adverse affects.  Once an investigational drug is found to have some efficacy and an acceptable safety profile in the targeted patient population, multi-center Phase III studies are initiated to establish safety and efficacy in an expanded patient population and multiple clinical study sites.  The Food and Drug Administration reviews both the clinical plans and the results of the trials and may request an applicant to discontinue the trials at any time if there are significant safety issues. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The results of the pre-clinical tests and clinical trials are submitted to the Food and Drug Administration in the form of a biologic license application for marketing approval.  The testing and approval process is likely to require substantial time and effort and there can be no assurance that any approval will be granted on a timely basis, if at all.  Additional animal studies or clinical trials may be requested during the Food and Drug Administration review period that may delay marketing approval.  After the Food and Drug Administration approval for the initial indications, further clinical trials may be necessary to gain approval for the use of the product for additional indications.  The Food and Drug Administration requires that adverse affects be reported to the Food and Drug Administration and may also require post-marketing testing to monitor for adverse affects, which can involve significant expense. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Under current requirements, facilities manufacturing biological products must also be licensed.  To accomplish this, a biologic license application must be filed with the Food and Drug Administration.  The biologic license application describes the facilities, equipment and personnel involved in the manufacturing process.  An establishment license is granted on the basis of inspections of the applicant's facilities in which the primary focus is on compliance with regulations and procedures</font><b><font size=2> </font></b><font size=2>and the ability to consistently manufacture the product in the facility in accordance with the Investigational Device Exemption.  If the Food and Drug Administration finds the inspection unsatisfactory, it may decline to approve the biologic license application, resulting in a delay in production of products. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>As part of the approval process for human biological products, each manufacturing facility must be registered and inspected by the Food and Drug Administration prior to marketing approval.  In addition, state agency inspections and approvals may also be required for a biological product to be shipped out of state. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font size=2>Regulatory Process in Europe</font></b></p>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>If we successfully develop our PluriX&#153; bioreactor system and seek regulatory approval in Europe, we believe our PluriX&#153; Bioreactor system may be regulated in Europe as a Class I Sterile, Class IIb or Class III medical device, under the authority of the Medical Device Directives being implemented by European Union member countries.  These classifications apply to medical laboratory equipment and supplies including, among other products, many devices that are used for the collection and processing of blood for patient therapy. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The Medical Device Directives regulations vest the authority to permit affixing of the CE Mark with various notified bodies.  These are private and state organizations which operate under license from the member states of the European Union to certify that appropriate quality assurance standards and compliance procedures are followed by developers and manufacturers of medical device products or, alternatively, that a manufactured medical product meets a more limited set of requirements.  Notified bodies are also given the responsibility for determination of the appropriate standards to apply to a medical product.  Receipt of permission to affix the CE Mark enables a company to sell a medical device in all European Union member countries.  Other registration requirements may also need to be satisfied in certain countries.  We have not received permission from a notified body to affix the CE Mark to our
PluriX&#153; Bioreactor system. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>PLAN OF OPERATION</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Overview</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>You should read the following discussion of our financial condition and results of operations together with the unaudited financial statements and the notes to unaudited financial statements included elsewhere in this filing prepared in accordance with accounting principles generally accepted in the United States.  This discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those anticipated in these forward-looking statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>From our inception on May 11, 2001 to April, 2003, we had been engaged in software development, premised on the use of artificial intelligence in computer programming technology and in many areas of the computer, Internet, robotics, and games industries, and as well, a software application to assist in finding domain names.  In May 2003, our board of directors conducted an in-depth analysis of our business plan and related future prospects for software development companies.  To better protect stockholder interests and provide future appreciation, it was decided to concurrently pursue initiatives in the biotech industry as an extension to our existing business.  On May 5, 2003, we entered into a License Agreement with Weizmann Institute to Science and the Technion-Israel Institution of Technology to acquire an exclusive license for a stem cell expansion technology.  To better develop this exclusively licensed
technology, we purchased 100% of the issued and outstanding shares of Pluristem, Ltd. on June 10, 2003.  Pluristem, Ltd. is a research and development company based in Israel.  As of July 1, 2003, we have suspended our efforts to further develop artificial intelligence in computer programming and other software applications.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Liquidity and Capital Resources</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>During the six months ended December 31, 2004, we incurred a net loss of $708,955, as compared to a net loss of $693,084 in the six month period to December 31, 2003.  For the three months ended December 31, 2004 we incurred a loss of $401,881 compared to a loss of $370,625 in the three months ended December 31, 2003.  This resulted from moving forward with our R&amp;D plan.  We obtained funds to carry on our business from private placements we conducted in October of 2004 and January of 2005, which raised proceeds of approximately $3,250,000 through the issuance of 32,500,000 units comprising one common share and one common share purchase warrants.  By the end of the six month period, on December 31, 2004, we had cash of $265,409, which together with the proceeds from the recent private placement offerings, would be sufficient to fund our operations for approximately 18 months. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On October 25, 2004, we commenced a private placement offering with a group of investors who subscribed for units of our securities pursuant to Common Stock and Warrant Purchase Agreement dated for reference on October 25, 2004.  For the sake of clarity, we have referred to this private placement offering as the October 25, 2004 Private Placement.  The October 25, 2004 Private Placement closed in four different tranches:   </font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On November 30, 2004, we closed the first tranche of the October 25, 2004 Private Placement and issued 3,250,000 units at a price of $0.10 per unit to seven investors for total gross proceeds of $325,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On January 26, 2005, we closed the second tranche of the October 25, 2004 Private Placement and issued 4,300,000 units at a price of $0.10 per unit to nine investors for total gross proceeds of $430,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On March 3, 2005, we closed the third tranche of the October 25, 2004 Private Placement and issued 750,000 units at a price of $0.10 per unit to four investors for total gross proceeds of $75,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On March 23, 2005, we closed the fourth tranche of the October 25, 2004 Private Placement and issued 200,000 units at a price of $0.10 per unit to one investor for total gross proceeds of $20,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>We have  committed to pay certain placement agents cash in the amount of $24,500 and issued to them 245,000 warrants, each exercisable for one common share at a price of $0.10 until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On January 24, 2005, we commenced another private placement offering with a group of investors who subscribed for units of our securities pursuant to Common Stock and Warrant Purchase Agreement dated for reference January 24, 2005.  For the sake of clarity, we have referred to this private placement offering as the January 24, 2005 Private Placement.  We closed the January 24, 2005 Private Placement on March 3, 2005 and issued 12,000,000 units at a price of $0.10 per unit to fifteen investors for total gross proceeds of $1,200,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>We have paid certain placement agents fees consisted of 1,845,000 common shares and 475,000 common share purchase warrant. These warrants are exercisable at a per share exercise price equal to $2.50.  The warrants expire on November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On January 31, 2005, we commenced a private placement offering with a group of investors who subscribed for units of our securities pursuant to Private Placement Subscription Agreement dated for reference on January 31, 2005.  For the sake of clarity, we have referred to this private placement offering as the January 31, 2005 Private Placement.  The January 31, 2005 Private Placement closed in three different tranches:   </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On February 16, 2005, we completed the first tranche of the January 31, 2005 Private Placement effective January 31, 2005 and issued 7,000,000 units at a price of $0.10 per unit to two investors for total gross proceeds of $700,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On February 16, 2005, we closed the second tranche of the January 31, 2005 Private Placement and issued 4,500,000 units at a price of $0.10 per unit to six investors for total gross proceeds of $450,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On February 17, 2005, we closed the third tranche of the January 31, 2005 Private Placement and issued 500,000 units at a price of $0.10 per unit to one investor for total gross proceeds of $50,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 45-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>We paid a placement agent a fee of $60,000 and have issued 600,000 common share purchase warrants, each warrant exercisable into one common share at a price of $0.10. The warrants expire on November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>While we expect that we have sufficient funds to operate until summer of 2006, we will have to raise additional funds from the market before we have any cash flow from operations.  The approval process for our products in the United States and other jurisdictions is protracted and we believe will take several years.  In addition, any acquisitions that we may plan or product development that is beyond the scope of what is described in our Plan of Operations below will require additional capital, which must be raised through the issuance of our securities.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Plan of Operations</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our primary objective over the next twelve months will be to further develop the expanded hematopoietic stem cell product and process.  We will perform the development of the production process performed in the PluriX Bioreactor.  Methods for the preparation of the cord blood seed, its freezing and thawing, development of the stromal cells and establishment of a master cell bank and working cell bank will be developed first.  Following bioprocess development, fill and finish and development of analytical methods will be performed.  In parallel, we will set up a quality assurance plan and implement it.  A documentation center and compliance procedures will be established.  In parallel, we will execute pre-clinical studies to demonstrate the expanded hematopoietic stem cell product activity in repopulating mice bone marrow.  Regulatory activities will start by crystallizing the regulatory strategy, preparing a
pre-filing document and perform a pre-filing meeting with the Food and Drug Administration.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Concurrently, we will initiate contact with research centers and cord blood banks to establish cooperative relations for future business development.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We will continue our cooperation with the Technion Institute of Technology in Israel regarding the Magneton grant received from the Israeli government.  Within this grant we, together with the Technion researchers will further develop the PluriX</font><sup><font SIZE=2>TM</font></sup><font size=2> bioreactor using biodegradable scaffold structure which imitates the human bone.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We intend to consult with Food and Drug Administration consultants to assist us in determining the process toward gaining Food and Drug Administration regulatory approval.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We have not generated any revenues and our operating activities have used cash resources of over $651,057 for the six month period ended December 31, 2004.  This negative cash flow is attributable to our operation expenses, including but not limited to, research and development expense and the payment of our audit fees and legal fees.  We anticipate that our operating expenses will increase as we intend to conduct detailed development of our first product - expanded hematopoietic stem cell product, animal pre-clinical trials and experiments and clinical trials and work towards its completion.  We estimate our expenses in the next twelve months will be approximately $2,000,000, generally falling in two major categories: research and development costs and general and administrative expenses.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Research and Development Costs</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>For the next twelve months, we estimate that our research and development costs will be approximately $1,000,000.  We intend to spend our research and development costs on optimizing the 3-D bioreactor operations, developing the expanded hematopoietic stem cell product, implanting stem cells from cord blood into the stromal cell cultures of PluriX&#153; bioreactors for expansion and on conducting studies on mice to examine stem cell development and expansion.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>General and Administrative Expenses</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>For the next twelve months, we estimate that our general and administrative expenses will be approximately $1,000,000.  These expenses will include office and miscellaneous charges, which consist primarily of charges incurred for purchase of office supplies and other administrative expenses.  These expenses will also include professional fees, which consist primarily of accounting and auditing fees for the year-end audit and legal fees for securities advice, directors liability insurance and cost of fundraising.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 46-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We do not expect to generate any revenues in the next twelve months.  Our products will not be ready for sale for up to five years.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In our management's opinion, we need to achieve the following events or milestones in the next twelve months in order for us to begin generating revenues as planned within five years:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="625" style=' border-collapse:collapse'>
    <tr >
        <td  width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Raise equity or debt financing or a combination of equity and debt financing of at least $10,000,000.</font></p> </td>
        <td   width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Build new bioreactor prototypes for continued research and for testing its functionality in production operation conditions.</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Optimize 3-D PluriX&#153; bioreactor operations - Using the 3-D environment of the PluriX&#153;, a dense population of stromal cells (support cells) has been reached to provide the basis for stem cell expansion without differentiation.  The stromal cells release a signal to prevent differentiation. Optimization of the bioreactor system is a continuous process to enable the stem cells to self-renew while remaining in their original state.</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Development of expanded hematopoietic stem cell product process and analytical methods.</font></p> </td>
        <td   width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Studies to obtain an animal model.  Trials will be conducted on SCID mice to examine the stem cell development and expansion process.  "SCID mice" are mice without immune systems so that they can be used to simulate human immune systems.</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td  width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Crystallize the regulatory and medical strategy prior to meeting with the Food and Drug Administration.</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Prepare a pre-filing document and attend pre-filing meeting with the Food and Drug Administration.</font></p> </td>
        <td   width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Establish relations with research centres and cord blood banks.</font></p> </td>
        <td   width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="24" ></td>

        <td width="24" ></td>

        <td width="357" ></td>

        <td width="152" ></td>

        <td width="48" ></td>

        <td width="1" ></td>

        <td width="18" ></td>

        <td width="1" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><i><font size=2>Research and Development</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Since June 10, 2003, the date we acquired Pluristem, Ltd., we set up and began research activities in our clean rooms and laboratory.  We built bioreactors to conduct research and development in a 3-D environment and seeded stromal cells into the bioreactors to produce the stromal cell culture where the stem cells will be implanted. Throughout this period and into 2005, we will continue with the R&amp;D activities referenced above.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Purchase or Sale of Equipment</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>With the acquisition of Pluristem Ltd., we obtained much of the specialized laboratory equipment that we need to conduct our research. This equipment included incubators, freezers, computers, hot plates, generators, microscopes, and other equipment. We expect that we now own most of the laboratory equipment that we will need to conduct our planned research and development for the next twelve months.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Going Concern</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Due to our being a development stage company and not having generated revenues, in the consolidated financial statements for the year ended June 30, 2004, we included an explanatory paragraph regarding concerns about our ability to continue as a going concern.  Our consolidated financial statements contain additional note disclosures describing the circumstances that lead to this disclosure.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The continuation of our business is dependent upon us raising additional financial support.  The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 47-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Recently Issued Accounting Standards</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. This Statement is effective for financial instruments entered into or modified after May 31. 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003 except for mandatory redeemable financial instruments of nonpublic entities.  The adoption of this standard did not have a material effect on our financial position or
results of operations.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities (&#147;FIN 46&#148;).  The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities.  A variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either 9(a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities.  FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity&#146;s activities or entitled to receive a majority of the entity&#146;s residual returns or both.  FIN 46 also requires disclosures about variable interest entities that the company is not required to
consolidate but in which it has a significant variable interest.  The consolidation requirements of Interpretation 46 apply immediately to variable interest entities created after January 31, 2003.  The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003.  Certain of the disclosure variable interest entity were established. As of December 31, 2003, we adopted FIN 46, but the adoption of this standard had no material effect on our financial position or results of operations.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004) (&#147;123(R)&#148;), &#147;Share-Based Payment&#148;, which in revision of FASB Statement No. 123, &#147;Accounting For Stock- Based Compensation&#148;. Statement 123(R) supersedes APB Opinion No. 25, &#147;Accounting For Stock Issued To Employees&#148;, and amends FASB statement 123(R) is similar  to the approach describe in statement 123. However, Statement 123(R) requires all share-based payments to employees, including grant of employees stock options, to be recognized in the income statements based on their fair value .Pro forma disclosure is no longer an alternative.  Statement 123(R) must be adopted no later than January 1, 2006. Early adoption will be permitted in periods in which financial statements have not yet been issued. The company except to adopt statement 123(R) on January 1, 2006. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Statement 123(R), permits public companies to adopt its requirements using one of two methods:</font></p>


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        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A &#147;Modified prospective&#148; method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of statement 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of statements 123(R) for all awards granted to employees prior to the effective date of statements 123(R) that remains unvested on the effective date.</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A &#147;Modified retrospective&#148;  method which includes the requirements of the modified prospective method describe above but also permits entities to restate based on the amounts previously recognized under statements 123 for purpose of Pro forma disclosure either (a) all periods presented or (b) prior interim periods of the year of adoption. </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The company plans to adopt statement No. 123(R) using the modified prospective method.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In December 2004, the FASB issued Statement of Financial Accounting Standard No. 153, </font><i><font size=2>Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29</font></i><font size=2> (&#147;SFAS 153&#148;).  The guidance in APB Opinion No. 29, </font><i><font size=2>Accounting for Nonmonetary Transactions</font></i><font size=2> (&#147;APB 29&#148;), is based on the principle that exchanges of nonmonetary assets should be measure based on fair value of the assets exchanged.  APB 29 included certain exceptions to that principle.  SFAS 153 amends APB 29 to eliminate the exception for nonmonetary exchanges of similar productive </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 48-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange.  SFAS 153 is effective for nonmonetary assets exchanges occurring in fiscal periods beginning after June 15, 2005.  The Company does not expect that the adoption of SFAS 153 will have a material effect on its financial position or results of operations. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;line-height:95%;'><font SIZE=2>APPLICATION OF CRITICAL ACCOUNTING POLICIES</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;line-height:95%;'><font size=2>Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States.  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies.  We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;line-height:95%;'><i><font size=2>Acquisition of technology rights</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;line-height:95%;'><font size=2>In the acquisition of stem cell expansion technology rights through the License Agreement, we considered whether these rights meet the criteria of an asset or should be expensed.  As a result of the negative cash flows that have occurred and are expected to continue in the foreseeable future, the PluriX&#153; Bio-reactor System and License Agreement technology assets which we acquired in the 2003 fiscal year were written off during the 2004 fiscal year.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;line-height:95%;'><i><font size=2>Going Concern</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;line-height:95%;'><font size=2>Our annual financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations.  The financial statements have been prepared assuming we will continue as a going concern.  However, certain conditions exist which raise doubt about our ability to continue as a going concern.  We have suffered recurring losses from operations and have accumulated losses of approximately $2,551,248 since inception through the year ended June 30, 2004 and an additional $708,955 through the six month period ending December 31, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;line-height:95%;'><i><font size=2>Off Balance Sheet Arrangements</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our company has no off balance sheet arrangements that are not disclosed in our Annual Report on Form 10-KSB as filed with the Securities and Exchange Commission on September 28, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DESCRIPTION OF PROPERTY</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our principal offices are located at MATAM Advanced Technology Park, Building No. 20, Haifa, Israel  31905.  Our telephone number is 011-972-4-850-1080. We lease our office space from MATAM Advanced Technology Park on a month to month basis and our monthly rental is approximately $6,700.  During the fiscal year ending June 30, 2004, we paid $80,665 for rent and $40,834 for the six months ending December 31. 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On December 19, 2002, our common stock received approval for quotation on the National Association of Securities Dealers Inc.'s Over-the-Counter Bulletin Board under the name "A.I. Software, Inc." and under the symbol "AISF".  On April 8, 2003, we effected a fourteen (14) for one (1) forward stock split.  Accordingly, our symbol was changed to "ASOW".  On June 30, 2003, we effected a name change to "Pluristem Life Systems, Inc." and our symbol was changed to "PLRS".  The following table reflects the high and low bid information for our common stock obtained from Yahoo! Finance and reflects inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 49-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:left;'><font size=2>The high and low bid prices of our common stock for the periods indicated below are as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="432" style=' margin-left:72.4pt;border-collapse:collapse'>
    <tr>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>National Association of Securities Dealers</font></b><br> <b><font size=2>OTC Bulletin Board</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Quarter Ended</font><sup><font size=2>(1)</font></sup></b><b></b></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>High</font><sup><font size=2>(2)</font></sup></b><b></b></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Low</font><sup><font size=2>(2)</font></sup></b><b></b></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>March 31, 2005</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.37</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.22</font></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>December 31, 2004</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.32</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.20</font></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>September 30, 2004</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.40</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.16</font></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>June 30, 2004</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.75</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.34</font></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>March 31, 2004</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$1.12</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.59</font></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>December 31, 2003</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$1.24</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.55</font></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>September 30, 2003</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$1.88</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$1.07</font></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>June 30, 2003</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$2.29</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.05</font></p> </td> </tr>
    <tr>
        <td width="192" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>March, 31, 2003</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.42</font></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$0.42</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt; margin-left:1in;text-align:left;'><sup><font size=2>(1)  </font></sup><font size=2>Our common stock received approval for quotation on December 19, 2002. The first trade occurred January 21, 2003.</font></p>

<p style=' margin-bottom:0pt; margin-top:6pt; margin-left:1in;text-align:left;'><sup><font size=2>(2)  </font></sup><font size=2>On April 8, 2003, we effected a 14 for 1 forward split of our common stock, as a result all stock prices have been adjusted on a post-split basis.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On April 18, 2005, the closing price for the common stock as reported by the quotation service operated by the OTC Bulletin Board was $0.22.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>As of April 25, 2005, there were 88 holders of record of our common stock.  As of such date, 63,603,483 common shares were issued and outstanding.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our common shares are issued in registered form.  The Nevada Agency and Trust Company, Suite 880, Bank of America Plaza, 50 West Liberty Street, Reno, Nevada  89501 (Telephone:  775.322.0626; Facsimile:  775.322.5623) is the registrar and transfer agent for our common shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Shares of our common stock are subject to rules adopted by the Securities and Exchange Commission that regulate broker-dealer practices in connection with transactions in "penny stocks".  "Penny stock" is defined to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.  Our common stock are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors."  The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.  The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules.  Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 50-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>DIVIDEND POLICY</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We have not declared or paid any cash dividends since inception and we do not intend to pay any cash dividends in the foreseeable future.  Although there are no restrictions that limit our ability to pay dividends on our common shares other than as described below, we intend to retain future earnings, if any, for use in our operations and the expansion of our business.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>EXECUTIVE COMPENSATION</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The following table summarizes, to the end of fiscal year ended June 30, 2004, the compensation of Dr. Irit Arbel, who served as our Chief Executive Officer and a director from May 30, 2003 to June 10, 2004, and Mr. Harvey M.J. Lawson, who served as our Chief Executive Officer from May 11, 2001 to May 30, 2003 and as a director from May 11, 2001 to February 11, 2004.  No other officers or directors received annual compensation in excess of $100,000 during the most recently completed fiscal year and are considered to be named executive officers for the purposes of our executive compensation disclosure on this registration statement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="678" style=' margin-left:0pt;border-collapse:collapse; '>
    <tr>
        <td  colspan="9" valign=top style='border:solid black .5pt;border-color:gray;  background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font SIZE=2>SUMMARY  COMPENSATION TABLE</font></p>  </td> </tr>
    <tr>
        <td width="126" valign=top style='border:solid black .5pt;border-color:gray;  border-top:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="54" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td  colspan="3" valign=top style='border-top:none;  border-left:none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Annual  Compensation</font></p>  </td>
        <td  colspan="3" valign=top style='border-top:none;  border-left:none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Long  Term Compensation</font></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td> </tr>
    <tr>
        <td width="126" valign=top style='border:solid black .5pt;border-color:gray;  border-top:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="54" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="60" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td  colspan="2" valign=top style='border-top:none;  border-left:none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Awards</font></p>  </td>
        <td width="66" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Payouts</font></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td> </tr>
    <tr style='height:68.55pt'>
        <td width="126" valign=top style='border:solid black .5pt;border-color:gray;  border-top:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Name and Principal</font><br>  <font size=2>Position</font></p>  </td>
        <td width="54" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Year</font></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Salary</font><br>  <font size=2>(US$)</font></p>  </td>
        <td width="60" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Bonus</font><br>  <font size=2>(US$)</font></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Other</font><br>  <font size=2>Annual</font><br>  <font size=2>Compen-</font><br>  <font size=2>sation  </font><br>  <font size=2>(US$)</font></p>  </td>
        <td width="84" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Securities</font><br>  <font size=2>Underlying</font><br>  <font size=2>Options/</font><br>  <font size=2>SARs</font><br>  <font size=2>Granted</font></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Restricted</font><br>  <font size=2>Shares  or</font><br>  <font size=2>Restricted</font><br>  <font size=2>Share</font><br>  <font size=2>Units</font></p>  </td>
        <td width="66" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  SIZE=2>LTIP</font><br>  <font size=2>Payouts</font><br>  <font size=2>(US$)</font></p>  </td>
        <td width="72" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:68.55pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>All Other</font><br>  <font size=2>Compen-</font><br>  <font size=2>sation</font></p>  </td> </tr>
    <tr style='height:48.3pt'>
        <td width="126" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt;height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Dr. Irit Arbel</font><br> <font size=2>Former Chief Executive Officer and Director</font></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt; height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>2004</font><br> <font size=2>2003</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt; height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>108,000</font><br> <font size=2>Nil</font></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt; height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt; height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>$20,000</font></p> </td>
        <td width="84" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt; height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>563,962</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt; height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><br> <font size=2>Nil</font></p> </td>
        <td width="66" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt; height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt; padding:0in 6.0pt 0in 6.0pt; height:48.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td> </tr>
    <tr style='height:37.85pt'>
        <td width="126" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt; height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Harvey Lawson</font><br> <font size=2>Former Chief Executive Officer &amp; Director</font></p> </td>
        <td width="54" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>2003</font><br> <font size=2>2002</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td>
        <td width="60" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td>
        <td width="84" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>56,396</font><br> <font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td>
        <td width="66" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td>
        <td width="72" valign=top style='border-top:none;border-left:none; border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:37.85pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font><br> <font size=2>Nil</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font SIZE=2>OPTION GRANTS IN THE LAST FISCAL YEAR</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The following table sets forth for Dr. Irit Arbel, who served as our Chief Executive Officer and a director from May 30, 2003 to June 10, 2004, certain information concerning the number of stock options granted in the fiscal year ended June&nbsp;30, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="667" style=' margin-left:5.6pt;border-collapse:collapse; '>
    <tr style='height:61.6pt'>
        <td   width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='border:solid black .5pt;border-color:gray;  background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:61.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Name</font></p>  </td>
        <td width="120" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:61.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Number of Securities Underlying Options/SARs granted  (#)</font></p>  </td>
        <td width="120" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:61.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font  size=2>Percent of total options/SARs granted to employees in  fiscal year</font></p>  </td>
        <td width="174" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:61.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Exercise  or base price ($/Sh)</font></p>  </td>
        <td  colspan="3" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:61.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Expiration  Date</font></p>  </td> </tr>
    <tr >
        <td   width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='border:solid black .75pt;border-color:gray;  border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Dr. Irit Arbel</font></p>  </td>
        <td width="120" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>563,962</font></p>  </td>
        <td width="120" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>15.47%</font></p>  </td>
        <td width="174" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$0.30/share*</font></p>  </td>
        <td  colspan="3" valign=top style='border-top:none;  border-left:none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>June 10, 2007**</font></p>  </td> </tr>
    <tr >
        <td  colspan="3" valign=top style='padding: 12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>*</font></p> </td>
        <td  colspan="5" valign=top style=' padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>These options were originally granted at the exercise price of $0.76/share.  The exercise price was reduced to $0.30 on October 17, 2004.</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  colspan="2" valign=top style=' padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>**  </font></p> </td>
        <td  colspan="7" valign=top style=' padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>According to the terms of the Stock Option Agreement between our company and Dr. Irit Arbel, under which</font></p> </td>
        <td  width="38">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="1" ></td>

        <td width="22" ></td>

        <td width="1" ></td>

        <td width="79" ></td>

        <td width="120" ></td>

        <td width="120" ></td>

        <td width="174" ></td>

        <td width="107" ></td>

        <td width="5" ></td>

        <td width="38" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 51-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in;text-align:left;'><font size=2>these options were granted, these options expire 3 years after the she ceased to be a director of our company.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font SIZE=2>AGGREGATED OPTION/EXERCISES IN LAST FISCAL YEAR AND 2004 FISCAL YEAR END OPTION/VALUES</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The following table sets forth for Dr. Irit Arbel, who served as our Chief Executive Officer and a director from May 30, 2003 to June 10, 2004, certain information concerning the number of shares subject to both exercisable and unexercisable stock options as of June&nbsp;30, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style=' margin-left:6.0pt;border-collapse:collapse; '>
    <tr style='height:84.3pt'>
        <td width="114" valign=top style='border:solid black .5pt;border-color:gray;  background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:84.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><br>  <br>  <br>  <br>  <br>  <br>  <font size=2>Name</font></p>  </td>
        <td width="78" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:84.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><br>  <br>  <br>  <br>  <font size=2>Shares</font><br>  <font size=2>Acquired  on</font><br>  <font size=2>Exercise  (#)</font></p>  </td>
        <td width="84" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:84.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><br>  <br>  <br>  <br>  <font size=2>Aggregate</font><br>  <font size=2>Value</font><br>  <font size=2>Realized</font></p>  </td>
        <td  colspan="2" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:84.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><br>  <font size=2>Number  of Securities Underlying</font><br>  <font size=2>Unexercised  Options/SARs at</font><br>  <font size=2>FY-End  (#)</font><br>  <br>  <font size=2>Exercisable  /</font><br>  <font size=2>Unexercisable</font></p>  </td>
        <td  colspan="2" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:84.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><br>  <font size=2>Value  of Unexercised In-the</font><br>  <font size=2>-Money  Options/SARs at FY-</font><br>  <font size=2>end  ($)</font><br>  <br>  <font size=2>Exercisable / Unexercisable</font></p>  </td> </tr>
    <tr>
        <td width="114" valign=top style='border:solid black .5pt;border-color:gray;  border-top:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="78" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="84" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>  </td>
        <td width="78" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Exercisable</font></p>  </td>
        <td width="96" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Unexercisable</font></p>  </td>
        <td width="78" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Exercisable</font></p>  </td>
        <td width="96" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .5pt;border-right:solid black .5pt;    background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Unexercisable</font></p>  </td> </tr>
    <tr>
        <td width="114" valign=top style='border:solid black .75pt;border-color:gray;  border-top:none;padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Dr. Irit Arbel</font></p>  </td>
        <td width="78" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font></p>  </td>
        <td width="84" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font></p>  </td>
        <td width="78" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>407,228*</font></p>  </td>
        <td width="96" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>156,734**</font></p>  </td>
        <td width="78" valign=top style='border-top:none;border-left:  none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font></p>  </td>
        <td width="96" valign=top style='border-top:none;border-left:none;  border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Nil</font></p>  </td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to the terms of the Stock Option Agreement between our company and Dr. Irit Arbel, under which these options were granted, these options expire 3 years after the she ceased to be a director of our company.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before Dr. Irit Arbel ceased to be a director of our company on June 10, 2004, these options have not vested.  Accordingly, these options expired automatically and were return to the pool under our 2003 Stock Option Plan.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font SIZE=2>REPRICING OF OPTIONS/SARS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We did not re-price any options awarded to any executive officers during fiscal year ended June 30, 2004.  However, on October 17, 2004, the Board of Directors of our company passed a resolution to reduce the exercise price of the outstanding stock options granted to the directors, employees and consultants of our company under our 2003 Stock Option Plan to $0.30 per share.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font SIZE=2>LONG-TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We have no long-term incentive plans, other than the Stock Option Plan described below.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font SIZE=2>STOCK OPTION PLAN</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On November 25, 2003, we adopted our 2003 Stock Option Plan, under which options to purchase up to 4,100,000 shares of our common stock can be granted to our directors, officers, employees and consultants.  We granted a total of 3,589,384 options on December 30, 2003 with various exercise prices and expiration dates, to directors, officers, employees and consultants. On June 10, 2004 the former chief executive officer left our company and 156,734 of her options expired and were returned to the option pool. As at June 30, 2004, there were 610,954 unallocated options remaining under the 2003 Stock Option Plan.  On August 4, 2004 we granted an additional 451,170 options to the company's new chief financial officer.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font SIZE=2>COMPENSATION OF DIRECTORS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We reimburse our directors for expenses incurred in connection with attending board meetings and on April 15, 2004, we approved of the following compensation for directors: annual compensation of $8,400 plus applicable taxes; meeting participation fees of $750 plus taxes; and for meeting participation by telephone, 50% of the regular </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 52-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>meeting compensation. In fiscal 2004 we paid a total of $57,804 to directors as compensation.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Other than as described in the paragraph above, we have no present formal plan for compensating our directors for their service in their capacity as directors.  Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board.  The board may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director.  Other than indicated in this registration statement, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments during the fiscal year ended June 30, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On December 30, 2003, we granted the following directors stock options to purchase shares of common stock.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="552" style=' margin-left:6.0pt;border-collapse:collapse; '>
    <tr style='height:29.65pt'>
        <td width="132" valign=top style='border:solid black .5pt;border-color:gray;  background:#E5E5E5;padding:0in 6.0pt 0in 6.0pt;  height:29.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Name</font></p>  </td>
        <td width="162" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:29.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Number  of Securities Underlying Options/SARs granted (#)</font></p>  </td>
        <td width="132" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:29.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Exercise  or base price ($/Sh)</font></p>  </td>
        <td width="126" valign=top style='border:solid black .5pt;border-color:gray;  border-left:none;background:#E5E5E5;  padding:0in 6.0pt 0in 6.0pt;  height:29.65pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Expiration  Date</font></p>  </td> </tr>
    <tr style='height:14.1pt'>
        <td width="132" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt; height:14.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Harvey M.J. Lawson, Former Director</font><sup><font size=2>(1)</font></sup></p> </td>
        <td width="162" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:14.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>56,396</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:14.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$0.30/share</font><sup><font size=2>(3)</font></sup></p> </td>
        <td width="126" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:14.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Feb 11, 2007</font><sup><font size=2>(2)</font></sup></p> </td> </tr>
    <tr style='height:18.6pt'>
        <td width="132" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt; height:18.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Meir Segev,</font><br> <font size=2>Former Director</font></p> </td>
        <td width="162" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:18.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>338,377</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:18.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$0.30/share</font><sup><font size=2>(3)</font></sup></p> </td>
        <td width="126" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:18.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Feb 26, 2008</font><sup><font size=2>(2)</font></sup></p> </td> </tr>
    <tr style='height:17.25pt'>
        <td width="132" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt; height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Doron Shorrer, Director</font></p> </td>
        <td width="162" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>451,170</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$0.30/share</font><sup><font size=2>(3)</font></sup></p> </td>
        <td width="126" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>May 1, 2013</font></p> </td> </tr>
    <tr style='height:17.25pt'>
        <td width="132" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt; height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Hava Meretzki, Director</font></p> </td>
        <td width="162" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>338,377</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$0.30/share</font><sup><font size=2>(3)</font></sup></p> </td>
        <td width="126" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>May 1, 2013</font></p> </td> </tr>
    <tr style='height:17.25pt'>
        <td width="132" valign=top style='border:solid black .75pt;border-color:gray; border-top:none;padding:0in 6.0pt 0in 6.0pt; height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Robert Pico,</font><br> <font size=2>Former Director</font></p> </td>
        <td width="162" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>169,189</font></p> </td>
        <td width="132" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>$0.30/share</font><sup><font size=2>(3)</font></sup></p> </td>
        <td width="126" valign=top style='border-top:none;border-left: none;border-bottom:solid black .75pt;border-right:solid black .75pt;  padding:0in 6.0pt 0in 6.0pt;height:17.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=2>Feb 26, 2008</font><sup><font size=2>(2)</font></sup></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><sup><font size=2>(1) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></sup><font size=2>Mr. Harvey M.J. Lawson ceased to be a director of our company on February 11, 2004.  Mr. Meir Segev and Mr. Robert Pico ceased to be directors of our company on January 26, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><sup><font size=2>(2)</font></sup><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to the terms of the Stock Option Agreements between our company and the respective directors, under which these options were granted, these options expire 3 years after the they ceased to be directors of our company.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><sup><font size=2>(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></sup><font size=2>All of the stock options granted to the directors and former directors named above were granted pursuant to our 2003 Stock Option Plan at the exercise price of $0.76/share. Subsequently on October 17, 2004, the Board of Directors of our company passed a resolution to reduce the exercise price of the outstanding stock options granted to the directors, employees and consultants of our company under our 2003 Stock Option Plan to $0.30 per shares. The exercise price of all outstanding options under our 2003 Stock Option Plan have now all reduced to $0.30. This change to the exercise price for the stock options did not affect other terms and conditions of the outstanding stock options, which terms and conditions have been set out specifically in the respective
stock option agreements entered into between our company and each of the optionees pursuant to our 2003 Stock Option Plan. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font SIZE=2>EXECUTIVE EMPLOYMENT AGREEMENTS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>There are no written employment or consulting agreements between our company and any of our directors and executive officers, except an agreement with Yossi Keret dated May 29, 2004, under which Mr. Keret is paid 33,000 New Israeli Shekels per month (US$7,290 at a conversion rate of 4.52645 NIS to the $US).  We had unwritten agreements with Dr. Irit Arbel and Shmuel Levi whereby our compensation committee will decide on their annual gross salary. For the fiscal year ended June 30, 2004, Dr. Arbel's salary was $108,000 per annum and Shmuel Levi's salary was $49,000 per annum. On April 15, 2004, our compensation committee increased the salary of Dr. Irit Arbel to $10,000 per month. Dr. Arbel resigned as CEO on June 10, 2004, and Dr. Mendi Ze'evi was </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 53-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>appointed in her place. Dr. Ze'evi's gross compensation is $15,000 per month.   On October 17, 2004, Dr. Mendi Ze&#146;evi ceased to be CEO of our company and his contract was not renewed.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Arrangements and plans to provide pension, retirement or similar benefits for directors or executive officers will be decided upon by the compensation committee.  We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.  We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;line-height: 150%;'><i><font size=2>Pension, Retirement or Similar Benefit Plans</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers, except that our directors and executive officers may receive stock options at the discretion of our board of directors.  We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>REPORTS TO SECURITY HOLDERS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We are not required to deliver an annual report to our security holders but intend to voluntarily send an annual report, together with our annual audited financial statements.  We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission.  Our Securities and Exchange Commission filings are available to the public over the Internet at the SEC's website at http://www.sec.gov.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The public may read and copy any materials filed by us with the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington DC  20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  We are an electronic filer.  The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.  The Internet address of the site is http://www.sec.gov.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>FINANCIAL STATEMENTS</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;line-height:95%;'><font size=2>Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The following consolidated financial statements are filed as part of this registration statement:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Consolidated Balance Sheets at December 31, 2004 (Unaudited)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Consolidated Statements of Operations &#150; Six Months and Three Months Ended December 31, 2004 (Unaudited) and 2003 (Unaudited) and for the period from May 11, 2001 (incorporation) through December 31, 2004 (Unaudited)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Consolidated Statements of Changes in Stockholders&#146; Equity (Deficiency) &#150; Six Months Ended December 31, 2004 (Unaudited) and Years Ended June 30, 2004, June 30, 2003, June 30, 2002 and for the period from May 11, 2001 (incorporation) through June 30, 2001</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Consolidated Statements of Cash Flows &#150; Six Months Ended December 31, 2004 (Unaudited) and 2003 (Unaudited) and for the period from May 11, 2001 (incorporation) through December 31, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 54-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Notes to Consolidated Financial Statements (Unaudited) &#150; Six Months Ended December 31, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Report of Independent Registered Public Accounting Firm, dated September 28, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Consolidated Balance Sheets as at June 30, 2004 and June 30, 2003</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Consolidated Statements of Operations for the years ended June 30, 2004 and June 30, 2003</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Consolidated Statements of Changes in Stockholders' Equity (Deficiency) for the years ended June 30, 2004, June 30, 2003, June 30, 2002 and the period from May 11, 2001 (incorporation) through June 30, 2001</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Consolidated Statements of Cash Flows for the years ended June 30, 2004, June 30, 2003 and for the period from May 11, 2001 (incorporation) through June 30, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Notes to the Consolidated Financial Statements for the year ended June 30, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font size=2>(A Company in the Development Stage)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font SIZE=2>CONSOLIDATED FINANCIAL STATEMENTS </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font size=2>As of December 31, 2004</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="407" style=' margin-left:122.55pt;border-collapse:collapse'>
    <tr>
        <td width="407" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font SIZE=2>CONSOLIDATED FINANCIAL STATEMENTS </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font size=2>As of December 31, 2004</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><b><font SIZE=2>IN U.S. DOLLARS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><u><b><font SIZE=2>INDEX</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="480" style=' margin-left:90.45pt;border-collapse:collapse'>
    <tr>
        <td width="400" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><u><b><font size=2>Page</font></b></u><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="400" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="400" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Consolidated Balance Sheet</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>2-3</font></p> </td> </tr>
    <tr>
        <td width="400" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Consolidated Statements of Operations</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>4</font></p> </td> </tr>
    <tr>
        <td width="400" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Statements of changes in Stockholders&#146; Equity (Deficiency)</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>5-7</font></p> </td> </tr>
    <tr>
        <td width="400" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Consolidated Statements of Cash Flows</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>8-9</font></p> </td> </tr>
    <tr>
        <td width="400" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Notes to Consolidated Financial Statements</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>10-14</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="340" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>CONSOLIDATED BALANCE SHEETS</font></b><b><u></u></b></p> </td>
        <td width="340" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars (except share data)</font></b><b><u></u></b></p> </td>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<table border="0" cellspacing=0 cellpadding=0 width="102%" style=' margin-left:5.4pt;border-collapse:collapse'>
    <tr>
        <td width="528" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>December 31,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="528" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="528" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>(Unaudited)</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>ASSETS</font></b><b><u></u></b></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font SIZE=2>CURRENT ASSETS:</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Cash and cash equivalents</font><u></u></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>265,409</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Prepaid expenses</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,439</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Other accounts receivables</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>24,807</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><u><font size=2>Total</font></u><font size=2> current assets</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>292,655</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>LONG-TERM RESTRICTED LEASE DEPOSIT</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,204</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>SEVERANCE PAY FUND</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,560</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>PROPERTY AND EQUIPMENT, NET </font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>240,533</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>DEFERRED ISSUANCE EXPENSES</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>287,238</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:22.3pt'>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:22.3pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:22.3pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:22.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="528" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><u><font size=2>Total </font></u><font size=2>assets</font></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="108" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>860,190</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


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            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>CONSOLIDATED BALANCE SHEETS</font></b><b><u></u></b></p> </td>
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            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
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            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars (except share data)</font></b><b><u></u></b></p> </td>
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            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>









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            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>December 31,</font></b><b></b></p> </td> </tr>
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            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
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            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>(Unaudited)</font></b><b></b></p> </td> </tr>
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            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>LIABILITIES AND STOCKHOLDERS&#146; EQUITY </font></b><b></b></p> </td>
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            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font SIZE=2>CURRENT LIABILITIES:</font></p> </td>
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            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Short-term bank credit</font></p> </td>
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            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>12,539</font></p> </td> </tr>
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        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Current maturities know-how licensors</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>68,750</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Trade payables</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>110,574</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Accrued expenses</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>159,961</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Other accounts payable </font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>58,568</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><u><font size=2>Total </font></u><font size=2>current liabilities</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>410,392</font></p> </td> </tr>
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        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font SIZE=2>LONG-TERM LIABILITIES</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Know-how licensors, net of current maturities</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>174,688</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Liability in respect of warrants </font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>150,000</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Accrued severance pay</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>29,393</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>354,081</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>STOCKHOLDERS&#146; EQUITY</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.0pt'>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Share capital:</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:2.9pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Common stock $0.00001 par value:</font></p>
<p style='margin-left:14.15pt;text-indent:2.9pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Authorized: 1,400,000,000 shares </font></p>
<p style='margin-left:14.15pt;text-indent:2.9pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Issued and Outstanding: 30,108,483 shares </font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><br> <br> <font size=2>301</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Additional paid-in capital</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>3,355,619</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Deficit accumulated during the development stage</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(3,260,203)</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>95,717</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="491" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="108" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.75pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>860,190</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>




<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font size=2>(A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars (except share and per share data)</font></b><b><u></u></b></p> </td>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width=900 style=' margin-left:0pt;border-collapse:collapse'>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <b><font size=2>Six Month Period Ended</font></b><br> <b><font size=2>December 31,</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <b><font size=2>Three Month Period Ended</font></b><br> <b><font size=2>December 31,</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Period From May 11, 2001 (Inception) Through </font></b><br> <b><font size=2>December 31,</font></b><b></b></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="93" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="83" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td style='border-bottom:solid black .5pt; ' width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Research and development costs, net (*)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b><b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>411,305</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>394,117</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>149,970</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>188,041</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,768,737</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.75pt;text-indent:-.75pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>General and administrative expenses (*)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>478,857</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>279,836</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>265,508</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>169,061</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,410,893</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>In-process research and development</font><br> <font size=2>  Write-off</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>246,470</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>890,162</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>673,953</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>415,478</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>357,102</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,426,100</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Financial expenses (income), net</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(181,207)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>19,131</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(13,597)</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13,523</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,165,897)</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Net loss for the period</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0pt'><b><font size=2>$</font></b><b></b></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>708,955</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>693,084</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>401,881</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="93" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>370,625</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="83" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,260,203</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr style='height:13.45pt'>
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:13.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Basic and diluted net loss per share </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><b><font size=2>$</font></b><b></b></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.03)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:0in;text-align:right; line-height:normal'><font size=2>(0.03)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.01)</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="93" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.02)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average number of shares </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>used in computing basic and diluted  </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="240" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Net loss per share:</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>27,423,700</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,495,398</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>27,953,592</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="93" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:30.4pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,558,483</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>(*) Reclassified</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width=1000 style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>STATEMENTS OF CHANGES IN  STOCKHOLDERS&#146; EQUITY (DEFICIENCY)</font></b><b><u></u></b></p> </td>
        <td width="255" valign=top style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars (except shares data)</font></b><b><u></u></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" ></td>

        <td width="320" ></td>

        <td width="255" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width=1000 style=' border-collapse:collapse'>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Deficit</font></b><b></b></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Accumulated</font></b><b></b></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Additional</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Receipts</font></b><b></b></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>during the</font></b><b></b></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Stockholders&#146;</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>Common Stock</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>paid-in</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>On account</font></b><b></b></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Development</font></b><b></b></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Equity</font></b><b></b></p> </td> </tr>
    <tr style='height:6.4pt'>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:6.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt;height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>Shares</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Amount</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Capital</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>of shares</font></b><b></b></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Stage</font></b><b></b></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="96" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(Deficiency)</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Balance as of May 11, 2001 (date of incorporation)</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:55.5pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:5.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Issuance of common stock July 9, 2001</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35,000,000</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>350</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,150</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,500</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-top:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-top:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='border-top:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-top:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-top:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-top:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Balance as of June 30, 2001</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35,000,000</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>350</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,150</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,500</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net loss for the year ended June 30, 2002</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(77,903)</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(77,903)</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Balance as of June 30, 2002</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35,000,000</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>350</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,150</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(77,903)</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(75,403)</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Issuance of common stock on October 14, 2002, </font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-5.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Net of issuance expenses of $17,359</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,133,000</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>141</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>83,450</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>83,591</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Forgiveness of debt</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,760</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,760</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Stocks cancelled on March 19, 2003</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(27,300,000)</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(273)</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>273</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Receipts on account of stock and warrants, net of finders and legal fees of $56,540</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>933,464</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>933,464</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net loss for the year ended June 30, 2003</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(462,995)</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-bottom:solid black .5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(462,995)</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="315" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Balance as of June 30, 2003</font></p> </td>
        <td width="8" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:double black 1.5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21,833,000</font></p> </td>
        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:6.75pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>218</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:5.25pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="74" valign=top style='border-bottom:double black 1.5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>97,633</font></p> </td>
        <td width="16" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:5.25pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>33,464</font></p> </td>
        <td width="15" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:4.5pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='border-bottom:double black 1.5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(540,898)</font></p> </td>
        <td width="10" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0in;text-indent:.75pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="96" valign=top style='border-bottom:double black 1.5pt; padding:0in 2.15pt 0in 2.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>490,417</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="914" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY </font></b><b><u></u></b></p> </td>
        <td width="255" valign=top style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars (except shares data)</font></b><b><u></u></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" ></td>

        <td width="320" ></td>

        <td width="255" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width=1000 style=' border-collapse:collapse'>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Deficit</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>accumulated</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Additional</font></b><b></b></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Receipts</font></b><b></b></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>During the</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>Common Stock</font></b><b></b></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>paid-in </font></b><b></b></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>on account</font></b><b></b></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>development</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Shareholders&#146;</font></b><b></b></p> </td> </tr>
    <tr style='height:6.4pt'>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>Shares</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Amount</font></b><b></b></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="88" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Capital</font></b><b></b></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>of shares</font></b><b></b></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>stage</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="103" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Equity</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Balance as of July 1, 2003</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21,833,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>218</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>97,633</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>933,464</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(540,898)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>490,417</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Issuance of common stock on July 16, 2003, </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-3.1pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>net of issuance expenses of $70,110</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>725,483</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,235,752</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(933,464)</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>302,295</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Issuance of common stock on January 20, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,000,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>30</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>30</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Issuance of warrants on January 20, 2004 for finder fee</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>192,000</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>192,000</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=2>Common stock granted to consultants on </font><br> <font size=2>&nbsp;&nbsp;February 11, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>1,000,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>10</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>799,990</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>800,000</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Stock based compensation related to warrants granted to consultants on December 31, 2003</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>357,618</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>357,618</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Exercise of warrants on  </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-3.1pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>April 19, 2004 </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>300,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>224,997</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>225,000</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net loss for the year ended June 30, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,010,350)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,010,350)</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Balance as of June 30, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26,858,483</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>268</font></p> </td>
        <td width="21" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="88" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,907,990</font></p> </td>
        <td width="34" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="81" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>- </font></p> </td>
        <td width="26" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="89" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,551,248)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="103" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>357,010</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="914" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY </font></b><b><u></u></b></p> </td>
        <td width="255" valign=top style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars (except shares data)</font></b><b><u></u></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" ></td>

        <td width="320" ></td>

        <td width="255" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="966" style=' border-collapse:collapse'>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Deficit</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>accumulated</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="4" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Additional</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Receipts</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>During the</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Total</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="4" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>Common Stock</font></b><b></b></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>paid-in </font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>on account</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>development</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Shareholders&#146;</font></b><b></b></p> </td> </tr>
    <tr style='height:6.4pt'>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>Shares</font></b><b></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="67" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Amount</font></b><b></b></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>capital</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>of shares</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>stage</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="104" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Equity</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Balance as of July 1, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26,858,483</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>268</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,907,990</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,551,248)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>357,010</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Stock-based compensation related to warrants</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-3.1pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>granted to consultants on September 30, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>151,570</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>151,570</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Issuance of common stock and warrants on November 30, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:.65pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>net of issuance costs of $28,908</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,250,000</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>333</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>296,059</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>296,092</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:51.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net loss for the period </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(708,955)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(708,955)</font></p> </td> </tr>
    <tr style='height:16.15pt'>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.15pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.15pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:16.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:4.0pt'>
        <td width="321" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:4.0pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Balance as of December 31, 2004 (unaudited)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:4.0pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>30,108,483</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:4.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="67" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:4.0pt'>
            <p style='margin-left:0pt;text-indent:8.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>301</font></p> </td>
        <td width="33" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:4.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:4.0pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,355,619</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:4.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:4.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(3,260,203)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:4.0pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="104" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:4.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>95,717</font></p> </td> </tr>
    <tr>
        <td width="321" ></td>

        <td width="16" ></td>

        <td width="87" ></td>

        <td width="16" ></td>

        <td width="7" ></td>

        <td width="67" ></td>

        <td width="33" ></td>

        <td width="87" ></td>

        <td width="16" ></td>

        <td width="84" ></td>

        <td width="18" ></td>

        <td width="95" ></td>

        <td width="16" ></td>

        <td width="104" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-9</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>




<table border="0" cellspacing=0 cellpadding=0 width="674" style=' border-collapse:collapse'>
    <tr>
        <td width="381" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>CONSOLIDATED STATEMENTS OF CASH FLOWS</font></b><b><u></u></b></p> </td>
        <td width="293" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td>
        <td width="293" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>











<table border="0" cellspacing=0 cellpadding=0 width="107%" style=' border-collapse:collapse'>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><br> <br> <br> <b><font size=2>Six months ended </font></b><br> <b><font size=2>December 31,</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:4.5pt;text-indent:-4.5pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>Period from May 11, 2001 (inception)</font></b><br> <b><font size=2>through</font></b><br> <b><font size=2>December 31,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="18" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="72" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>CASH FLOWS FROM OPERATING ACTIVITIES:</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Net loss </font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(708,955)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:1.15pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(693,084)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(3,260,203)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Adjustments to reconcile net loss to net cash used in operating activities:</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br > <br > </p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Depreciation and amortization</font>                             </p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>15,675</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>43,192</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>125,476</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Impairment of know-how</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>264,807</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Amortization of deferred issuance costs</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>69,868</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>131,972</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Stock-based compensation to consultants</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>151,570</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,309,188</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>In-process research and development write-off</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>246,470</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Know-how licensors &#150; imputed interest</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,811</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>15,082</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>29,288</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Increase in accounts receivable</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(9,475)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(18,346)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(15,971)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Decrease (increase) in prepaid expenses</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>54,471</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(2,439)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Increase (decrease) in trade payables</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,301)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(32,068)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>101,167</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Increase (decrease) in other accounts payable and accrued expenses</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>39,814</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(7,156)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(208,080)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Increase in accrued interest due to related parties</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>3,450</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Linkage differences and interest on long-term restricted lease deposit</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(1,245)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><br> <font size=2>(459)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2> (2,221)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Change in fair value of liability in respect of warrants </font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(270,000)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,349,970)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Accrued severance pay, net</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,710</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>2,555</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>11,833</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net cash used in operating activities</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(651,057)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(690,284)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(2,615,233)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>CASH FLOWS FROM INVESTING ACTIVITIES:</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Acquisition of Pluristem Ltd. (1)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>31,899</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Purchase of property and equipment</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(29,759)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(24,530)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(155,416)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Investment in long-term restricted lease deposit</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>2,629</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,176)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Purchase of know-how </font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(100,000)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net cash used in investing activities</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(29,759)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(21,901)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(224,693)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>CASH FLOWS FROM FINANCING ACTIVITIES:</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Issuance of common stock, net of issuance costs</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>296,092</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>302,295</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>909,508</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Issuance of warrants</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,272,790</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Receipts on account of stocks</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>933,464</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Short-term bank credit, net</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,516</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>10,351</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>12,513</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Repayment of know-how licensors</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(31,250)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(31,250)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Proceeds from notes and loan payable to related parties</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>78,195</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Repayments of know &#150; how licenses</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(69,885)</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net cash provided by financing activities</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>277,358</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>312,646</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>3,105,335</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Increase (decrease) in cash and cash equivalents</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(403,458)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(399,539)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>265,409</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Cash and cash equivalents at the beginning of the period</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>668,867</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>507,337</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="108" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="367" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Cash and cash equivalents at the end of the period</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>265,409</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="72" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>107,798</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="108" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:1.5pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>265,409</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>















<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-10</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="387" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>CONSOLIDATED STATEMENTS OF CASH FLOWS</font></b><b><u></u></b></p> </td>
        <td width="292" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td>
        <td width="292" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="625" style=' border-collapse:collapse'>
    <tr style='height:78.6pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:78.6pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:78.6pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt;height:78.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <b><font size=2>Six months ended</font></b><br> <b><font size=2>December 31,</font></b><b></b></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:78.6pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:78.6pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Period from May 11, 2001 (inception) through</font></b><br> <b><font size=2> December 31,</font></b><b></b></p> </td> </tr>
    <tr style='height:25.7pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:25.7pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:25.7pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="80" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt; height:25.7pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="18" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:25.7pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="74" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt;height:25.7pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:25.7pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt; height:25.7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:24.9pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:24.9pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><b><font size=2>Non-cash investing and financing information:</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:24.9pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:24.9pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:24.9pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:24.9pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:24.9pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:24.9pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'><font size=2>Unpaid know-how</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="80" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0in;text-indent:4.0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="74" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>300,000</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0in;text-indent:4.0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:4.0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>268,750</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0pt;text-indent:4.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:4.0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0pt;text-indent:4.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0pt;text-indent:4.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:4.0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'><font size=2>Forgiveness of debt</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="80" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0in;text-indent:4.0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="74" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,760</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0in;text-indent:4.0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:4.0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,760</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.2pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.2pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><b><font size=2>(1) Acquisition of Pluristem Ltd.</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.2pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><b><font size=2>Fair value of assets acquired and</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.2pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:11.25pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><b><font size=2>liabilities assumed at the acquisition date:</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.2pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=2>Working capital (excluding cash and cash equivalents)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0pt;text-indent:4.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(427,176)</font></p> </td> </tr>
    <tr style='height:13.2pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=2>Long-term restricted lease deposit</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>18,807</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=2>Property and equipment</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>130,000</font></p> </td> </tr>
    <tr style='height:13.2pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in;line-height:129.6%'><font size=2>In-process research and development write-off</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:13.2pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:13.2pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>246,470</font></p> </td> </tr>
    <tr style='height:12.45pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.0pt'>
        <td width="328" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="80" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:14.0pt'>
            <p style='margin-left:0in;text-indent:4.0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt;height:14.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(31,899)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-11</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="169" style=' border-collapse:collapse'>
    <tr>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 1: -</font></b></p> </td>
        <td width="93" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>GENERAL</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-1.18in;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:56.9pt; border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pluristem Life Systems Inc. (the Company&#148;), a Nevada Corporation, was incorporated and commenced operations on May 11, 2001.  The Company has a wholly owned subsidiary, Pluristem Ltd. (the &#147;subsidiary&#148;) that was incorporated under the laws of Israel, and began its activity in January 2004.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.29in; text-indent:-0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:56.9pt; border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>b.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Company is devoting substantially all of its efforts towards conducting research and development of critical cell expansion services to cord blood banks.  In the course of such activities, the Company and its subsidiary have sustained operating losses and expect such losses to continue in the foreseeable future. The Company and its subsidiary have not generated any revenues or product sales and have not achieved profitable operations or positive cash flows from operations.  The Company&#146;s deficit accumulated during the development stage aggregated to approximately $3,260,203 through December 31, 2004.  There is no assurance that profitable operations, if ever achieved, could be sustained on a continuing basis.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.29in;text-align:justify;'><font size=2>The Company plans to continue to finance its operations with a combination of stock issuance and private placements and in the longer term, revenues from product sales. There are no assurances, however, that the Company will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of its planned products.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.29in;text-align:justify;'><font size=2>These conditions raise substantial doubt about the Company&#146;s ability to continue as a going concern.  The consolidated financial statements do not include any adjustments that might arise from this uncertainty, relating to the recoverability and classification of recorded assets amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.29in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:56.9pt; border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>c.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The accompanying unaudited interim consolidated financial statements have been prepared as of December 31, 2004 and for the six months and three months then ended, in accordance with United States generally accepted accounting principles relating to the preparation of financial statements for interim periods.  Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the six-month period ended December 31, 2004 are not necessarily indicative of the results that may be expected for the year ended June 30, 2005.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2><font face="Arial">&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-12</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="373" style=' border-collapse:collapse'>
    <tr>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2: -</font></b></p> </td>
        <td width="297" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>SIGNIFICANT ACCOUNTING POLICIES </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:56.7pt; border-collapse:collapse'>
    <tr>
        <td width="37" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The significant accounting policies applied in the annual consolidated financial statements of the Company as of June 30, 2004 are applied consistently in these consolidated financial statements.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>These financial statements should be read in conjunction with the audited annual financial statements of the Company as of June 30, 2004 and their accompanying notes.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>Certain amounts from prior years have been reclassified to conform to current period presentation.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="303" style=' margin-left:57.0pt;border-collapse:collapse'>
    <tr>
        <td width="37" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>b.</font></p> </td>
        <td width="266" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Accounting for stock-based compensation</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>The Company has elected to follow Accounting Principles Board Opinion No. 25 &#147;Accounting for Stock Issued to Employees (&#147;APB 25&#148;) and FASB Interpretation No. 44 &#147;Accounting for Certain Transactions Involving Stock Compensation (&#147;FIN 44&#148;) in accounting for its employee stock option plan.  Under APB 25, when the exercise price of the Company&#146;s stock options is less than the market price of the underlying stocks on the date of grant, compensation expense is recognized over the vesting period.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>Pro forma information regarding the Company&#146;s net loss and net loss per stock as required by Financial Accounting Standards Board Statement No. 148 &#147;Accounting for Stock Based Compensation &#150; Transaction and Disclosure (&#147;SFAS No. 148&#148;) that amended Financial Accounting Standards Board Statement No. 123 (&#147;SFAS 123&#148;) has been determined as if the Company had accounted for its stock options under the fair value method prescribed by SFAS No. 123.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>The fair value for options granted is amortized over their vesting period and estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="523" style=' margin-left:1.2in;border-collapse:collapse'>
    <tr>
        <td width="300" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Dividend yield</font></p> </td>
        <td width="223" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="300" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Volatility</font></p> </td>
        <td width="223" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>98%</font></p> </td> </tr>
    <tr>
        <td width="300" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average risk-free interest rate</font></p> </td>
        <td width="223" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.2%</font></p> </td> </tr>
    <tr>
        <td width="300" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected life (in years)</font></p> </td>
        <td width="223" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-13</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="449" style=' border-collapse:collapse'>
    <tr>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2: -</font></b></p> </td>
        <td width="373" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SIGNIFICANT ACCOUNTING POLICIES (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>Pro forma information under SFAS No. 123, is as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="107%" style=' margin-left:0pt;border-collapse:collapse'>
    <tr style='height:46.7pt'>
        <td width="191" valign=top style=' height:46.7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5" valign=top style=' height:46.7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style=' height:46.7pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <br> <br> <br> <b><font size=2>Six months ended</font></b><b></b></p> </td>
        <td width="2" valign=top style=' height:46.7pt'>
            <p style='margin-left:49.65pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="2" valign=top style=' height:46.7pt'>
            <p style='margin-left:17.5pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><br> <br> <br> <br> <br> <b><font size=2>Three months ended</font></b><b></b></p> </td>
        <td width="112" valign=top style=' height:46.7pt'>
            <p style='margin-left:0pt;text-indent:10.0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>Period from</font></b><br> <b><font size=2> May 11,</font></b><br> <b><font size=2>2001</font></b><br> <b><font size=2>(inception)</font></b><br> <b><font size=2> through</font></b><b></b></p> </td> </tr>
    <tr style='height:12.25pt'>
        <td width="191" valign=top style=' height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5" valign=top style=' height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b><b></b></p> </td>
        <td width="2" valign=top style=' height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31,</font></b><b></b></p> </td>
        <td width="112" valign=top style='border-bottom:solid black .5pt; height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>December 31</font></b><b></b></p> </td> </tr>
    <tr style='height:11.5pt'>
        <td width="191" valign=top style=' height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5" valign=top style=' height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='border-bottom:solid black .5pt; height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="7" valign=top style='border-top:solid black .5pt; height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td  colspan="2" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="86" valign=top style='border-bottom:solid black .5pt; height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="112" valign=top style='border-bottom:solid black .5pt; height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr style='height:11.5pt'>
        <td width="191" valign=top style=' height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5" valign=top style=' height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="7" valign=top style='height: 11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style=' height:11.5pt'>
            <p  style='margin-top:0in; '><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=top style=' height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="112" valign=top style='height:11.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:38.3pt'>
        <td width="191" valign=top style=' height:38.3pt'>
            <p style='margin-left:14.15pt;text-indent:-.1pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Net loss available to Common stock &#150; as</font><br> <font size=2>&nbsp;&nbsp; Reported</font></p> </td>
        <td width="5" valign=top style=' height:38.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style=' height:38.3pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><br> <font size=2>$708,955</font></p> </td>
        <td width="7" valign=top style='height: 38.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style=' height:38.3pt'>
            <p style='margin-left:0pt;text-indent:5.1pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$693,084</font></p> </td>
        <td  colspan="2" valign=top style=' height:38.3pt'>
            <p style='margin-left:0pt;text-indent:5.1pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$401,881</font></p> </td>
        <td width="86" valign=top style=' height:38.3pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$370,625</font><b></b></p> </td>
        <td width="112" valign=top style=' height:38.3pt'>
            <p style='margin-left:0pt;text-indent:6.4pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$3,260,203</font></p> </td> </tr>
    <tr style='height:39.05pt'>
        <td width="191" valign=top style=' height:39.05pt'>
            <p style='margin-left:14.15pt;text-indent:-.1pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Deduct &#150; stock-based employee compensation   &#150; intrinsic value</font></p> </td>
        <td width="5" valign=top style=' height:39.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style=' height:39.05pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><br> <br> <font size=2>-</font></p> </td>
        <td width="7" valign=top style='height: 39.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style=' height:39.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>-</font></p> </td>
        <td  colspan="2" valign=top style=' height:39.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="86" valign=top style=' height:39.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>-</font></b><b></b></p> </td>
        <td width="112" valign=top style=' height:39.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="191" valign=top >
            <p style='margin-left:14.15pt;text-indent:-2.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Add  - stock based employee compensation</font><br> <font size=2>&nbsp;</font>        <font size=2>&#150; fair value</font></p> </td>
        <td width="5" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><br> <br> <font size=2>396,238</font></p> </td>
        <td width="7" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>1,207</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: solid black .5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>204,418</font></p> </td>
        <td width="86" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>1,207</font></p> </td>
        <td width="112" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>1,595,438</font></p> </td> </tr>
    <tr style='height:13.0pt'>
        <td width="191" valign=top style=' height:13.0pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="5" valign=top style=' height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='height:13.0pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="7" valign=top style='height: 13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=top style='height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="112" valign=top style='height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.0pt'>
        <td width="191" valign=top style=' height:13.0pt'>
            <p style='margin-left:14.15pt;text-indent:-3.1pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Pro forma net loss</font></p> </td>
        <td width="5" valign=top style=' height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='border-bottom:double black 1.5pt; height:13.0pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>$1,105,193</font></p> </td>
        <td width="7" valign=top style='height: 13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; height:13.0pt'>
            <p style='margin-left:0pt;text-indent:6.8pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$694,291</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: double black 1.5pt;height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$606,299</font></p> </td>
        <td width="86" valign=top style='border-bottom:double black 1.5pt; height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>$</font></b><font size=2>371,832</font><b></b></p> </td>
        <td width="112" valign=top style='border-bottom:double black 1.5pt; height:13.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$4,855,641</font></p> </td> </tr>
    <tr style='height:12.25pt'>
        <td width="191" valign=top style=' height:12.25pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="5" valign=top style=' height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='height:12.25pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="7" valign=top style='height: 12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=top style='height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="112" valign=top style='height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.05pt'>
        <td width="191" valign=top style=' height:14.05pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0in;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="5" valign=top style=' height:14.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style=' height:14.05pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="7" valign=top style='height: 14.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style=' height:14.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style=' height:14.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=top style=' height:14.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="112" valign=top style=' height:14.05pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:25.25pt'>
        <td width="191" valign=top style=' height:25.25pt'>
            <p style='margin-left:14.15pt;text-indent:-2.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Basic and diluted net loss per stock as reported</font></p> </td>
        <td width="5" valign=top style=' height:25.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='border-bottom:double black 1.5pt; height:25.25pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><br> <font size=2>$(0.03)</font></p> </td>
        <td width="7" valign=top style='height: 25.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; height:25.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$(0.03)</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: double black 1.5pt;height:25.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$(0.01)</font></p> </td>
        <td width="86" valign=top style='border-bottom:double black 1.5pt; height:25.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$(0.02)</font><b></b></p> </td>
        <td width="112" valign=top style=' height:25.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.25pt'>
        <td width="191" valign=top style=' height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="5" valign=top style=' height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='height:12.25pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="7" valign=top style='height: 12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=top style='height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="112" valign=top style=' height:12.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:24.5pt'>
        <td width="191" valign=top style=' height:24.5pt'>
            <p style='margin-left:14.15pt;text-indent:-2.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'><font size=2>Basic and diluted pro forma net loss per stock</font></p> </td>
        <td width="5" valign=top style=' height:24.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='border-bottom:double black 1.5pt; height:24.5pt'>
            <p style='margin-left:4.5pt;text-indent:-.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><br> <font size=2>$(0.04)</font></p> </td>
        <td width="7" valign=top style='height: 24.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; height:24.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$(0.03)</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: double black 1.5pt;height:24.5pt'>
            <p style='margin-left:0pt;text-indent:53.25pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$(0.02)</font></p> </td>
        <td width="86" valign=top style='border-bottom:double black 1.5pt; height:24.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <b><font size=2>$</font></b><font size=2>(0.02)</font><b></b></p> </td>
        <td width="112" valign=top style=' height:24.5pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="191" ></td>

        <td width="5" ></td>

        <td width="102" ></td>

        <td width="7" ></td>

        <td width="87" ></td>

        <td width="2" ></td>

        <td width="79" ></td>

        <td width="86" ></td>

        <td width="112" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="228" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>c.</font></p> </td>
        <td width="180" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Non-royalty-bearing grants</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>The Company receives non-royalty-bearing grants from the European Union Research and Development Program, and from the MOST and STRIMM consortiums, which are part of the Office of the Chief Scientist Magnet program. These grants are recognized at the time the Company is entitled to such grants on the basis of the costs incurred and are recorded as a reduction of research and development costs.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.41in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.41in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.41in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-14</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.41in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.41in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="448" style=' margin-left:0pt;border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2: -</font></b></p> </td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SIGNIFICANT ACCOUNTING POLICIES (continued)</font></b></p> </td> </tr>
    <tr >
        <td  width="50">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>d.</font></p> </td>
        <td width="299" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Impact of recently issued accounting standards:</font></u></p> </td>
        <td  width="70">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="50" ></td>

        <td width="25" ></td>

        <td width="5" ></td>

        <td width="299" ></td>

        <td width="70" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.19in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:justify;'><font size=2>On December 16, 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123(R) supersedes APB Opinion No. 25 Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of cash flows. Generally the approach in statement 123(R) is similar to the approach described in statement 123. However, Statement 123(R) requires</font><i><font size=2> </font></i><font size=2>all shares-based payment to employees, including grants of employee stock options, to be recognized in the income statement based on their fair value. Pro forma disclosure is no longer an alternative. Statement 123 (R) must be adopted no later then period beginning after December 15, 2005. Early adoption will be permitted in periods in which
financial statements have not yet been issued. We expect to adopt statement 123(R) on January 1, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="315" style=' border-collapse:collapse'>
    <tr>
        <td width="77" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 3: -</font></b></p> </td>
        <td width="238" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CHANGES IN SHARE CAPITAL</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="232" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="29" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a.</font></p> </td>
        <td width="203" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants issued to consultants:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.81in;text-align:justify;'><font size=2>In the framework of the stock option plan, the Company issued on December 30, 2003, 500,000 warrants to a consultant, for carrying out investor relation&#146;s activities over a period of two years ending December 31, 2004. On July 2004, the Company&#146;s board of directors approved to modify the terms of those 500,000 options (of which 250,000 are with an exercise price of $1 per stock and 250,000 with an exercise price of $1.25 per stock) to provide for a cashless exercise of the options.  The board of directors also resolved that the options&#146; exercise price will be reduced to $0.4 and that the options will be fully vested. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.81in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.81in;text-align:justify;'><font size=2>In addition, it was resolved to grant the consultant additional 500,000 options with an exercise price of $0.4 per stock, vested immediately and with a cashless exercise feature. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.81in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.81in;text-align:justify;'><font size=2>The Company accounted for its warrants to consultants under the fair value method in accordance of SFAS 123 and EITF 96-18 &#147;Accounting for Equity Instruments that are Issued to other than Employees for Acquiring, or in Conjunction with selling Goods or Services&#148;.  The fair value for these warrants was estimated using Black-Scholes option-pricing model with the following weighted-average assumptions: risk-free interest rates of 4.12%, expected dividend yield of 0%, expected volatility of 98%, and a weighted-average contractual life of the warrants of approximately 9.5 years. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.81in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.81in;text-align:justify;'><font size=2>Compensation expenses of $153,546 were recognized during the six month period ended December 31, 2004 in respect of the warrants to this consultant.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-15</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(A Development Stage Company)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.15in;text-align:right;'><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:11.15pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.62in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="408" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 3: -</font></b></p> </td>
        <td width="312" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>CHANGES IN SHARE CAPITAL (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.5in;border-collapse: collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>b.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>On October 17, 2004 the Board of Directors decided to reduce the exercise price of the options that were granted to the Company&#146;s employees and directors from $0.76 to $0.3. according to APB Opinion No. 25 and FIN 44 when the exercise price of a fixed stock option award is reduced, the award shall be accounted for as variable from the date of modification to the date the award is exercised, forfeited, or expires unexercised. The Reduction of the exercise price did not result in compensation expenses in the reported period.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.2in; text-indent:-2.2in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.5in;border-collapse: collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>c.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In October 2004 the Company Board of Directors approved a private placement agreement (&#147;the Agreement&#148;) to issue up to 15,000,000 units. Each unit is compromised of one common  stock and one warrant. The warrant is exercisable for one common stock at an exercise price of $0.30 per stock, subject to certain adjustments, and may be exercised until November 30, 2006. The Agreement includes a finder&#146;s fee of a cash amount of up to 5% of the amount invested and issuance of warrants for  number of shares up to 5% of the number of shares that will be issued with an exercise price  of $0.30 per stock exercisable until November 30, 2006.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.35in; text-indent:-0.35in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>In November 2004, the Company issued according to the Agreement 3,250,000 units comprised of 3,250,000 common stock and 3,250,000 warrants to a group of investors, for total consideration of $296,092 (net of cash issuance costs of  $28,908), and additional 120,000 warrants to finders as finders&#146; fee.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.35in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>In January 2005 the Company issued according to the Agreement an additional 4,300,000 units for total consideration of $425,250 (net of cash issuance costs of $4,750), and additional 90,000 warrants were issued to finders as finders&#146; fee The investors have the right to purchase up to additional 7,450,000 units with the same terms of Agreement until February 28, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.76in; text-indent:-0.28in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="528" style=' border-collapse:collapse'>
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        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 4: -</font></b></p> </td>
        <td width="432" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>GRANT RECEIVED FROM THE GOVERNMENT OF ISRAEL</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>The Company&#146;s subsidiary received funding as part of its participation in the Office of Chief Scientist Magnet program operated by Israel's Ministry of Industry and Trade. Through December 31, 2004, the subsidiary received grants in the amount of $54,267.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.35in; text-indent:-0.35in;text-align:center;'><font size=2>#        #         #         #            #</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-16</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="107%" style=' border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:1.0pt'><img src="img1.gif"><br> </p> </td>
        <td width="216" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:14.04%'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1><font face="Arial">&nbsp;</font></font></p>
<p style='margin-left:14.15pt;text-indent:-14.15pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>n&nbsp;&nbsp;&nbsp;&nbsp;</font><font face="Arial"><b><font size=1>Kost Forer Gabbay &amp; Kasierer</font></b></font></p>
<p style='margin-left:14.2pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1><font face="Arial">2 Pal-Yam Ave.</font></font></p>
<p style='margin-left:14.2pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1><font face="Arial">Haifa 33095, Israel</font></font></p> </td>
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:14.15pt;text-indent:-14.15pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=1>n&nbsp;&nbsp;&nbsp;&nbsp;<font face="Arial">Phone: 972-4-8654000</font></font></p>
<p style='margin-left:14.15pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1><font face="Arial">Fax:     972-4-8654022</font></font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>To The Stockholders Of</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We have audited the accompanying consolidated balance sheet of Pluristem Life Systems Inc. (a development stage company) ("the Company") (formerly - A. I. Software Inc.), and its subsidiary as of June 30, 2004 and 2003 the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the two years in the period ended June 30, 2004 and for the period from May 11, 2001 (inception date) through June 30, 2004.  These consolidate financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidate financial statements based on our audits.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In our opinion, the consolidated financial statements referred to above, present fairly, in all material respects, the financial position of the Company and its subsidiary as of June 30, 2004 and 2003, and the consolidated results of their operations and cash flows for each of the two years in the period ended June 30, 2004 and for the period from May 11, 2001 (inception date) through June 30, 2004, in conformity with U.S. generally accepted accounting principles.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>As discussed in Note 1c to the financial statements, the Company has not yet generated revenues from its operations and is dependent on external sources for financing its operations.  These factors, among others discussed in Note 1c raise substantial doubt about the Company's ability to continue as a going concern.  The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>/s/ Kost Forer Baggay &amp; Kasierer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Kost Forer Gabbay &amp; Kasierer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>A member of Ernst &amp; Young Global</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Haifa, Israel</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>September 28, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>f-</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="340" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CONSOLIDATED BALANCE SHEETS</font></b><b><u></u></b></p> </td>
        <td width="340" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars (except share data)</font></b><b><u></u></b></p> </td>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>




<table border="0" cellspacing=0 cellpadding=0 width="104%" style=' margin-left:5.0pt;border-collapse:collapse'>
    <tr>
        <td width="387" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="387" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>Note</font></b><b></b></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="27" valign=bottom style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="83" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="387" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>ASSETS</font></b><b><u></u></b></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>CURRENT ASSETS:</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash and cash equivalents</font><u></u></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>3</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>668,867</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>507,337</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Prepaid expenses</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>56,910</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Other accounts receivable</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>15,332</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>10,281</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><u><font size=2>Total</font></u><font size=2> current assets</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>741,109</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>517,618</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>LONG-TERM RESTRICTED LEASE DEPOSIT</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,959</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>19,837</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>SEVERANCE PAY FUND</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>31,575</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>PROPERTY AND EQUIPMENT, NET </font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=2>4</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>226,449</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>123,252</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>KNOW-HOW, NET</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=2>5</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>333,887</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font SIZE=2>DEFERRED ISSUANCE EXPENSES</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>357,106</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><u><font size=2>Total </font></u><font size=2>assets</font></p> </td>
        <td width="58" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,377,198</font></p> </td>
        <td width="27" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="83" valign=bottom style='border-bottom: double black 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>994,594</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>












<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated  financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-18</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="340" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CONSOLIDATED BALANCE SHEETS</font></b><b><u></u></b></p> </td>
        <td width="340" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars (except share data)</font></b><b><u></u></b></p> </td>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>





<table border="0" cellspacing=0 cellpadding=0 width="105%" style=' margin-left:5.0pt;border-collapse:collapse'>
    <tr>
        <td width="387" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=bottom style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="387" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>Note</font></b><b></b></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="25" valign=bottom style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="86" valign=bottom style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr style='height:25.15pt'>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:25.15pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><b><font SIZE=2>LIABILITIES AND STOCKHOLDERS' EQUITY </font></b><b></b></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:25.15pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:25.15pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:25.15pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:25.15pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:25.15pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>CURRENT LIABILITIES:</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Short-term bank credit</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>23</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>26</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Current maturities to know-how licensors</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>5</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>100,000</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade payables</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>112,875</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>123,409</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Other accounts payable and accrued expenses</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=2>6</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>178,715</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>132,564</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><u><font size=2>Total </font></u><font size=2>current liabilities</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>391,613</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>255,999</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><b><font SIZE=2>LONG-TERM LIABILITIES</font></b></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Know-how licensors, net of current maturities</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>5</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>168,877</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>248,178</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liability in respect of warrants </font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>8(f)</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>420,000</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Accrued severance pay</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>39,698</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>628,575</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>248,178</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>COMMITMENTS AND CONTINGENCIES</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>7</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><b><font SIZE=2>STOCKHOLDERS' EQUITY </font></b></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Share capital:</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>8</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Common stock $0.00001 par value: </font><br> <font size=2>     Authorized: 1,400,000,000 shares </font><br> <font size=2>     Issued and Outstanding: 26,858,483 shares </font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>268</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>218</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Additional paid-in capital</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,907,990</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>97,633</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Receipt on account of shares</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>933,464</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Deficit accumulated during the development stage</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,551,248)</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>(540,898)</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>357,010</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>490,417</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="89" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="86" valign=bottom style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="67" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="21" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="89" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,377,198</font></p> </td>
        <td width="25" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="86" valign=bottom style='border-bottom: double black 1.5pt;padding: 0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:2.85pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in;line-height:129.6%'><font size=2>994,594</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated  financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-19</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="387" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CONSOLIDATED STATEMENTS OF OPERATIONS</font></b><b><u></u></b></p> </td>
        <td width="292" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars (except share and per share data)</font></b><b><u></u></b></p> </td>
        <td width="292" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="900" style=' border-collapse:collapse'>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <br> <b><font size=2>Year ended June 30,</font></b><b></b></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Period from May 11, 2001 (inception) through </font></b><br> <b><font size=2>June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="60" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Note</font></b><b></b></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="83" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="8" valign=top style='border-top:solid black .5pt; '>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Research and development costs</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,223,561</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>79,871</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$$</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,357,432</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>General and administrative expenses</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,780,963</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>130,619</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,932,036</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>In-process research and development</font><br> <font size=2>  write-off</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><br> <font size=2>1b</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><br> <font size=2>-</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>246,470</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>246,470</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>3,004,524</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>456,960</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,535,938</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Financial  expenses (income), net</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=2>9</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(994,174)</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,035</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(984,690)</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Net loss</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="83" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:5.0pt;text-indent:-4.7pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>2,010,350</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>462,995</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="81" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,551,248</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Basic and diluted net loss per share</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="83" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(0.083)</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(0.01)</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average number of shares used </font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:6.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>in computing basic and diluted net loss </font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0in;text-indent:6.0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>per share:</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:5.0pt;text-indent:0pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>24,341,271</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>37,357,568</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="333" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="60" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="13" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="14" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-20</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="914" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>STATEMENTS OF CHANGES IN  STOCKHOLDERS' EQUITY (DEFICIENCY)</font></b><b><u></u></b></p> </td>
        <td width="255" valign=top style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars (except shares data)</font></b><b><u></u></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="340" ></td>

        <td width="320" ></td>

        <td width="255" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="1000" style=' margin-left:0in;border-collapse:collapse'>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <b><font size=2>Common Stock</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>Additional</font></b><br> <b><font size=2>paid-in</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>Receipts</font></b><br> <b><font size=2>on account</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Deficit</font></b><br> <b><font size=2>Accumulated</font></b><br> <b><font size=2>during the </font></b><br> <b><font size=2>Development</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <b><font size=2>Total</font></b><br> <b><font size=2>Stockholders'</font></b><br> <b><font size=2>Equity</font></b><b></b></p> </td> </tr>
    <tr style='height:6.4pt'>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Shares</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Amount</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>capital</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>of shares</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Stage</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(Deficiency)</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Balance as of May 11, 2001</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(date of incorporation)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:50.25pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Issuance of common stock </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:6.75pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>July 9, 2001 </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35,000,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>350</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,150</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,500</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Balance as of June 30, 2001</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35,000,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>350</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,150</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,500</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Loss for the year ended </font><br> <font size=2>  June 30, 2002</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(77,903)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(77,903)</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Balance as of June 30, 2002</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35,000,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>350</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,150</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(77,903)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(75,403)</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Issuance of common stock</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>on October 14, 2002, net of</font><br> <font size=2>  Issuance costs of $17,359</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>14,133,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>141</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>83,450</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>83,591</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Forgiveness of debt</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,760</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,760</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stocks cancelled on</font><br> <font size=2>   March 19, 2003</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(27,300,000)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(273)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>273</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Receipts on account of stock </font><br> <font size=2>  and warrants, net of finders </font><br> <font size=2>  fee and legal fees of $56,540</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>933,464</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>933,464</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Loss for the year ended</font></p>
<p style='margin-left:0in;text-indent:4.5pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>June 30, 2003</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(462,995)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(462,995)</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="200" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Balance as of June 30, 2003</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21,833,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>218</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>97,633</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>933,464</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(540,898)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>490,417</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-21</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


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    <tr>
        <td  colspan="2" valign=top style=' border-bottom:solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY</font></b><b><u></u></b></p> </td>
        <td width="255" valign=top style='border-bottom: solid black .75pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
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        <td width="340" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars (except shares data)</font></b><b><u></u></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
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        <td width="340" ></td>

        <td width="320" ></td>

        <td width="255" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <b><font size=2>Common Stock</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>Additional</font></b><br> <b><font size=2>paid-in </font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>Receipts</font></b><br> <b><font size=2>on account</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Deficit</font></b><br> <b><font size=2>accumulated</font></b><br> <b><font size=2>During the</font></b><br> <b><font size=2>development</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>Total</font></b><br> <b><font size=2>Shareholders'</font></b><b></b></p> </td> </tr>
    <tr style='height:6.4pt'>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Shares</font></b><b></b></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="71" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Amount</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>capital</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>of shares</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>stage</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:6.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt;height:6.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Equity</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Balance as of July 1, 2003</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21,833,000</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>218</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>97,633</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>933,464</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(540,898)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>490,417</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Issuance of common stock on</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>July 16, 2003, net of</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>issuance costs of $70,110</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>725,483</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,235,752</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(933,464)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>302,295</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Issuance of common stock on</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>January 20, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,000,000</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>30</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>30</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Issuance of warrants on January 20, 2004 for finder fee</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>192,000</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>192,000</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Common stock granted to consultants on February 11, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>1,000,000</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>10</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>799,990</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <br> <font size=2>800,000</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stock based compensation </font><br> <font size=2> related to warrants granted to</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:2.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>consultant on December 31, </font><br> <font size=2>  2003</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>357,618</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>357,618</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exercise of warrants on  </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>April 19, 2004 (see Note 8f)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>300,000</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>224,997</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>225,000</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Loss for the year ended </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:4.5pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>June 30, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,010,350)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,010,350)</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="71" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="196" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Balance as of June 30, 2004</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26,858,483</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="71" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>268</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="76" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:6.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,907,990</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,551,248)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="95" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>357,010</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-22</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="111%" style=' border-collapse:collapse'>
    <tr>
        <td width="381" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CONSOLIDATED STATEMENTS OF CASH FLOWS</font></b><b><u></u></b></p> </td>
        <td width="311" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td>
        <td width="311" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>





<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="110%" style=' border-collapse:collapse'>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <br> <b><font size=2>Year ended June 30,</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Period from May 11, 2001 (inception)</font></b><br> <b><font size=2>through</font></b><br> <b><font size=2>June 30</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="18" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="90" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CASH FLOWS FROM OPERATING ACTIVITIES:</font></b><b></b></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net loss </font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(2,010,350)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(462,995)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(2,551,248)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Adjustments to reconcile net loss to net cash used in operating activities:</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Depreciation and amortization</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>91,540</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>18,261</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>109,801</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Impairment of Know-how</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>264,807</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>264,807</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred issuance costs amortization</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>62,104</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>62,104</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stock-based compensation to consultants</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,157,618</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,157,618</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In-process research and development write-off</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>246,470</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>246,470</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Know-how licensors - imputed interest</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>20,699</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>2,778</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>23,477</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Increase in accounts receivable</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(5,051)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,445)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(6,496)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Increase in prepaid expenses</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(56,910)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(56,910)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Increase (decrease) in trade payables</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(10,534)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>114,002</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>103,468</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Increase (decrease) in other accounts payable and accrued expenses</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>46,121</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(304,309)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(247,894)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Increase in accrued interest due to related parties</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>3,450</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Linkage differences and interest on long-term restricted lease deposit</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>54</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,030)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(976)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Change in fair value of warrants </font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,079,970)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,079,970)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Accrued severance pay, net</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>8,123</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>8,123</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net cash used in operating activities</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,511,749)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(388,268)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,964,176)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CASH FLOWS FROM INVESTING ACTIVITIES:</font></b><b></b></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Acquisition of Pluristem Ltd. (1)</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>31,899</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>31,899</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Purchase of property and equipment</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(125,657)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(125,657)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investment in long-term restricted lease deposit</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,176)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(1,176)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Purchase of Know-how</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(100,000)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(100,000)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net cash used in investing activities</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(126,833)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(68,101)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(194,934)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CASH FLOWS FROM FINANCING ACTIVITIES:</font></b><b></b></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Issuance of common stock, net of issuance costs</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>527,325</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>99,166</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>613,416</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Issuance of units</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,272,790</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,272,790</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Receipts on account of stocks</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>933,464</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>933,464</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Short-term bank credit, net</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(3)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(3)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Proceeds from notes and loan payable to related parties</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>78,195</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Repayments of notes and loan payable to related parties</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(69,885)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>(69,885)</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Net cash provided by financing activities</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>1,800,112</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>962,745</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>2,827,977</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Increase in cash and cash equivalents</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>161,530</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>506,376</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>668,867</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Cash and cash equivalents at the beginning of the period</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>507,337</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>961</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:14.15pt;text-indent:-11.35pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Cash and cash equivalents at the end of the period</font></p> </td>
        <td width="23" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>668,867</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>507,337</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.1pt;text-indent:-1.1pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>668,867</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>




<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-23</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="387" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CONSOLIDATED STATEMENTS OF CASH FLOWS</font></b><b><u></u></b></p> </td>
        <td width="292" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr>
    <tr>
        <td width="387" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td>
        <td width="292" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style='border-bottom: solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <br> <br> <b><font size=2>Year ended June 30,</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><br> <b><font size=2>Period from May 11, 2001 (inception) through</font></b><br> <b><font size=2> June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="24" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="78" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="103" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><b><font size=2>Non-cash investing and financing information:</font></b><b></b></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'><font size=2>Unpaid know-how</font></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="78" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>300,000</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="103" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>300,000</font></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'><font size=2>Unamortized discount</font></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>54,600</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>54,600</font></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'><font size=2>Forgiveness of debt</font></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='border-top:double black 1.5pt; border-left:none;border-bottom:double black 1.5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="78" valign=top style='border-top:double black 1.5pt; border-left:none;border-bottom:double black 1.5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,760</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="103" valign=top style='border-top:double black 1.5pt; border-left:none;border-bottom:double black 1.5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,760</font></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><b><font size=2>Supplemental disclosure with respect to cash flows:</font></b><b></b></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="103" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="306" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'><font size=2>Cash paid for interest</font></p> </td>
        <td width="19" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="78" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>92</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="103" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>92</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="224" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td width="176" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Acquisition of Pluristem Ltd.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="475" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="475" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Estimated fair value of assets acquired and liabilities assumed at the acquisition date:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="538" style=' margin-left:62.1pt;border-collapse:collapse'>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="15" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="98" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Year ended</font></b><br> <b><font size=2>June 30,</font></b><br> <b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="85" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="98" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Working capital (excluding cash and cash equivalents)</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="98" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(427,176)</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="98" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Long-term restricted lease deposit</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="98" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>18,807</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Property and equipment</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="98" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>130,000</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>In-process research and development write-off</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="98" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>246,470</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="15" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="98" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(31,899)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying notes are an integral part of the consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-24</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="169" style=' border-collapse:collapse'>
    <tr>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 1:-</font></b></p> </td>
        <td width="93" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>GENERAL</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-1.18in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="134" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a.</font></p> </td>
        <td width="86" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Definitions:</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="541" style=' margin-left:72.9pt;border-collapse:collapse'>
    <tr>
        <td width="167" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>The Company</font></b></i><font size=2> </font></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="298" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pluristem Life Systems Inc.</font></p> </td> </tr>
    <tr>
        <td width="167" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>The Subsidiary</font></b></i></p> </td>
        <td width="76" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="298" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pluristem Ltd.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>b.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company was incorporated on May 11, 2001 under the laws of Nevada in the United States of America under the name A. I. Software Inc. that was changed as of June 30, 2003 to Pluristem Life Systems Inc.   </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company was engaged in the development of artificial intelligence software through May 2003. The Company has not been successful in fully implementing its business plan and therefore, it was decided to concurrently pursue initiatives in the Biotech Industry as an extension to the existing activity (see Note 11).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>On May 5, 2003 the Company entered into a license agreement with Weizmann Institute of Science and the Technion-Israel Institute of Technology to acquire an exclusive license for an innovative stem cell expansion technology ("the Technology").</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>On June 10, 2003, the Company acquired all of the issued and outstanding shares of Pluristem Ltd. in consideration of $1,000. Pluristem Ltd. is engaged in the research and development of expansion of cord blood hematopoetic stem cells, which was in line with the Technology, the rights which the Company had purchased on May 1, 2003.  The purchase price has been allocated to identifiable assets and liabilities of which an amount of $246,470 has been allocated to in-process research and development. The acquisition was accounted under the purchase method of accounting state that in accordance with Statement of Financial Accounting Standards No. 141 "Business Combinations" ("SFAS" No. 141). The results of Pluristem's operations have been included in the consolidated financial statements since that date.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The amount of $246,470 that was assigned to in-process research and development activities was  written off at the date of acquisition in accordance with FASB Interpretation No. 4, "Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method" ("FIN 4").</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>c.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company is devoting substantially all of its efforts towards conducting research and development of critical cell expansion services to cord blood banks.  In the course of such activities, the Company and its subsidiary have sustained operating losses and expect such losses to continue in the foreseeable future.  The Company and its subsidiary have not generated any revenues or product sales and have not achieved profitable operations or positive cash flows from operations. The Company's deficit accumulated during the development stage aggregated to $2,551,248 through June 30, 2004. There is no assurance that profitable operations, if ever achieved, could be sustained on a continuing basis.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-25</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="245" style=' border-collapse:collapse'>
    <tr>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 1:-</font></b></p> </td>
        <td width="169" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>GENERAL (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="130" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>c.</font></p> </td>
        <td width="82" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(continued)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company plans to continue to finance its operations with a combination of stock issuance and private placements and in the longer term, revenues from product sales.  There are no assurances, however, that the Company will be successful in obtaining an adequate level of financing needed for the long-term development and commercialization of its planned products.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="373" style=' border-collapse:collapse'>
    <tr>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2:-</font></b></p> </td>
        <td width="297" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>SIGNIFICANT ACCOUNTING POLICIES </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="159" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>a.</font></b></p> </td>
        <td width="111" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Use of estimates</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="282" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>b.</font></b></p> </td>
        <td width="234" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Functional currency of the subsidiary</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>It is anticipated that the majority of the subsidiary's revenues will be generated outside Israel and will be determined in U.S. Dollars ("dollars").  In addition, most of the financing of the subsidiary's operations has been made in dollars.  The subsidiary's management believes that the currency of the primary economic environment in which its operations are conducted is the dollar.  Thus, the functional and reporting currency of the subsidiary is the dollar.  Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with Statement of Financial Accounting Standards No. 52 "Foreign Currency Translation" ("SFAS" No. 52). All transaction gains and losses from the remeasurement of monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-26</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="469" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2:-</font></b></p> </td>
        <td width="373" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SIGNIFICANT ACCOUNTING POLICIES (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="218" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>c.</font></b></p> </td>
        <td width="170" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Principles of consolidation</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. Intercompany transactions and balances have been eliminated upon consolidation.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="168" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>d.</font></b></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cash  equivalents</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Cash equivalents are short-term highly liquid investments that are readily convertible to cash with maturities of three months or less at the date acquired.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="263" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>e.</font></b></p> </td>
        <td width="215" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Long-term restricted lease deposit</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Long-term restricted lease deposit with maturities of more than one year used to secure lease agreement is presented at cost. The deposit is in NIS (New Israeli Shekels) and bears an average annual interest of approximately 3.4%. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="211" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>f.</font></b></p> </td>
        <td width="163" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Property and Equipment </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates: </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="444" style=' margin-left:90.45pt;border-collapse:collapse'>
    <tr>
        <td width="359" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>%</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="359" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Laboratory equipment</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>10</font></p> </td> </tr>
    <tr>
        <td width="359" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Computers and peripheral equipment</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>33</font></p> </td> </tr>
    <tr>
        <td width="359" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Office furniture and equipment</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>6-15</font></p> </td> </tr>
    <tr>
        <td width="359" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.31in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="249" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>g.</font></b></p> </td>
        <td width="201" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Impairment of long-lived assets</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.31in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company's long-lived assets and identifiable intangibles are reviewed for impairment in accordance with Statement of Financial Accounting Standard No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144") whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets.  If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of June 30, 2004, due to the on-going losses and negative cash flows, the Company recognized an impairment of its Know-how in the amount of $264,807.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-27</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="469" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2:-</font></b></p> </td>
        <td width="373" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SIGNIFICANT ACCOUNTING POLICIES (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="129" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>h.</font></b></p> </td>
        <td width="81" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Know-how</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The unpaid portion of the acquired know-how is included at present value discounted at the relevant interest rate according to Accounting Principle Board Opinion No. 21 - "Interest on Receivables and Payables" (APB No. 21). The Know-how was impaired in the year ended June 30, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="312" style=' margin-left:34.5pt;border-collapse:collapse'>
    <tr>
        <td width="51" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>i.</font></b></p> </td>
        <td width="261" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Accounting for stock-based compensation:</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.39in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company's Board of Directors has adopted an Employee Stock Option Plan.  (See Note 8g).  The Company has elected to follow Accounting Principles Board Statement No. 25 "Accounting for Stock Option Issued to Employees ("APB No. 25") and Financial Accounting Standards Board Interpretation No. 44 "Accounting for Certain Transactions Involving Stock Compensation" ("FIN No. 44") in accounting for its employee stock option plan.  Under APB 25, when the exercise price of an employee stock option is equivalent to or is above the market price of the underlying stock on the date of grant, no compensation expense is recognized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company adopted the disclosure provisions of Financial Accounting Standards Board Statement No. 148, "Accounting for Stock-Based Compensation - transition and disclosure" ("SFAS No. 148"), which amended certain provisions of Statement of Financial Accounting Standard No. 123 "Accounting for Stock-Based Compensation" ("SFAS No. 123") to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation.  The Company continues to apply the provisions of APB No. 25, in accounting for stock-based compensation.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Pro forma information regarding the Company's net loss and net loss per share is required by SFAS No. 123 and has been determined as if the Company had accounted for its employee stock options under the fair value method presented by SFAS No. 123.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The fair value for options granted in the year ended June 30, 2004 is amortized over their vesting period of two years and was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="416" style=' margin-left:90.4pt;border-collapse:collapse'>
    <tr>
        <td width="302" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected dividend yield</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0%</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected volatility</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>92%</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk-free interest rate</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>4.2%</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected life of up to</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="83" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>10 years</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-28</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.31in;text-align:left;'><font size=2><font face="Arial">&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="469" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2:-</font></b></p> </td>
        <td width="373" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SIGNIFICANT ACCOUNTING POLICIES (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>Pro forma information under SFAS No. 123, is as follows:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="84%" style=' margin-left:90.45pt;border-collapse:collapse'>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <br> <br> <b><font size=2>Year ended</font></b><br> <b><font size=2>June 30,</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <b><font size=2>Period from May 11, 2001 (inception through</font></b><br> <b><font size=2>June 30)</font></b></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2004</font></p> </td>
        <td width="18" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="85" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net loss available to Common stock- as reported</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>2,010,350</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>462,995</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>2,551,248</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deduct - stock based employee </font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.55pt;text-indent:-1.55pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:9.0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>compensation - intrinsic value</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:1.55pt;text-indent:-1.55pt;text-align:right;margin-top:0in;margin-bottom:0in'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Add - stock-based employee</font><br> <font size=2>   compensation - fair value</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(109,885)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(109,885)</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Pro forma net loss</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="75" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,120,235</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="85" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>462,995</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="87" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,661,133</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Earning per stock:</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Basic and diluted net loss per stock   </font><br> <font size=2>   as reported</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="75" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(0.083)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><br> <font size=2>$</font></p> </td>
        <td width="85" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(0.01)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="75" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="85" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Pro forma  basic and diluted net loss  </font><br> <font size=2>    per stock</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="75" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(0.087)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0in'><br> <font size=2>$</font></p> </td>
        <td width="85" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>(0.01)</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="87" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:13.6pt; margin-top:0pt; margin-left:1in; text-indent:0.5in;text-align:justify;'><font size=2>The Company applies SFAS No. 123 and Emerging Issues Task Force No. 96-18 "Accounting for Equity Instruments that are Issued to other than Employees for Acquiring, or in conjunction with selling, goods or services" ("EIFT 96-18"), with respect to options and warrants issued to non-employees.  SFAS No. 123 requires the use of option valuation models to measure the fair value of the options and warrants at the date of grant.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>j.</font></b></p> </td>
        <td width="207" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Research and Development costs</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="492" style=' margin-left:1.0in;border-collapse:collapse'>
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        <td width="492" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Research and development costs are charged to the Statement of Operations as incurred.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-29</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.31in;text-align:left;'><font size=2><font face="Arial">&nbsp;</font></font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2:-</font></b></p> </td>
        <td width="373" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SIGNIFICANT ACCOUNTING POLICIES (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="269" style=' margin-left:.5in;border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>k.</font></b></p> </td>
        <td width="221" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Basic and diluted net loss per share</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Basic net loss per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted net loss per share is computed based on the weighted average number of shares of Common stock outstanding during each year, plus dilutive potential shares of common stock and warrants considered outstanding during the year, in accordance with Statement of Financial Standard No. 128, "Earnings Per Share." ("SFAS No. 128")</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>All outstanding stock options and warrants have been excluded from the calculation of the diluted net loss per common share because all such securities are anti-dilutive for all periods presented.  The total weighted average number of shares related to the outstanding options and warrants excluded from the calculations of diluted net loss per share was 957,223 and 4,548,024 for the years ended June 30, 2003 and 2004. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>l.</font></b></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Income taxes</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company and its subsidiary accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109").  This Statement prescribes the use of the liability method, whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured  using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  The Company and its subsidiary provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>m.</font></b></p> </td>
        <td width="180" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Concentration of credit risk</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Financial instruments that potentially subject the Company and its subsidiary to concentrations of credit risk consist principally of cash and cash equivalents, which are invested in major banks in Israel. Management believes that the financial institutions that hold the Company's investments are financially sound and accordingly, minimal credit risk exits with respect to these investments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-30</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


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    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="469" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2:-</font></b></p> </td>
        <td width="373" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SIGNIFICANT ACCOUNTING POLICIES (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="179" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>n.</font></b></p> </td>
        <td width="131" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Severance pay fund</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The subsidiary's liability for severance pay is calculated pursuant to Israeli severance pay law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date.  Employees are entitled to one month's salary for each year of employment or a portion thereof.  The Company's liability for all of its employees is fully provided by monthly deposits with insurance policies and by an accrual.  The value of these policies is recorded as an asset in the Company's balance sheet.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The deposited funds include profits accumulated up to the balance sheet date.  The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israeli severance pay law or labor agreements.  The value of the deposited funds is based on the cash surrendered value of these policies, and includes immaterial profits.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Severance expenses for the year ended June 30, 2003 and June 30, 2004 amounted to approximately $4,000 and $36,000, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="265" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>o.</font></b></p> </td>
        <td width="217" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Fair value of financial instruments</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The carrying amounts of cash and cash equivalents, accounts receivable, short-term bank credit, trade payables and other accounts payable, approximate their fair value due to the short-term maturity of such instruments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.41in;text-align:justify;'><font size=2>Long-term know-how liability is estimated by the discounting the future cash flow using current interest rates for liabilities of similar terms and maturities. The carrying amount of the long-term liability approximates its fair value. Liability in respect of the warrants issued is presented at fair value estimated using the Black-Scholes option pricing model.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="336" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>p.</font></b></p> </td>
        <td width="288" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Impact of recently issued accounting standards</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003 except for mandatory redeemable financial instruments of nonpublic entities. The adoption of this standard did not have an effect
on the financial position or results of operations of the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-31</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.31in;text-align:left;'><font size=2><font face="Arial">&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="469" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 2:-</font></b></p> </td>
        <td width="373" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SIGNIFICANT ACCOUNTING POLICIES (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46").  The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities.  A variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities.  FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both.  FIN 46 also requires disclosures about variable interest entities that the company is
not required to consolidate but in which it has a significant variable interest.  The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003.  The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after March 15, 2003. As of June 30, 2004, The adoption of this standard did not have an effect on the financial position or results of operations of the Company </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="347" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 3:-</font></b></p> </td>
        <td width="251" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CASH AND CASH EQUIVALENTS</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="506" style=' margin-left:62.05pt;border-collapse:collapse'>
    <tr>
        <td width="301" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:14.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In U.S. dollars</font></p> </td>
        <td width="25" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>647,425</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>391,986</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:14.25pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>In New Israeli Shekels (NIS)</font></p> </td>
        <td width="25" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>21,442</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>115,351</font></p> </td> </tr>
    <tr>
        <td width="301" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="78" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>668,867</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>507,337</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:13.6pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The cash and cash equivalents mainly consist of short-term deposits bearing average annual interest of approximately 6.0% on Israeli currency. The U.S. dollar amount bear no interest.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-32</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.2in; text-indent:-2.2in;text-align:justify;'><font size=2><font face="Arial">&nbsp;</font></font></p>












<table border="0" cellspacing=0 cellpadding=0 width="85%" style=' margin-left:62.1pt;border-collapse:collapse'>
    <tr style='height:15.75pt'>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt; height:15.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt; height:15.75pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.1pt 0in 5.1pt;height:15.75pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:10.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Cost:</font></b><b></b></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Laboratory equipment</font></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>231,364</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>114,912</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Computers and peripheral equipment</font></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>18,044</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,705</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Office furniture and equipment</font></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,249</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,383</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>255,657</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>130,000</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Accumulated depreciation:</font></b><b></b></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Laboratory equipment</font></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,482</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,050</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Computers and peripheral equipment</font></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,038</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,577</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Office furniture and equipment</font></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>688</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>121</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>29,208</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,748</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="340" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><b><font size=2>Depreciated cost</font></b><b></b></p> </td>
        <td width="28" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="72" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>226,449</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>123,252</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

























<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.9in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:left;'><font size=2>Depreciation expenses amounted to $22,163 and $7,043 for the years ended June 30, 2004 and June 30, 2003, respectively.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="232" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 5 -</font></b></p> </td>
        <td width="136" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>KNOW-HOW, NET</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>a.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>On May 1, 2003, the Company entered into a License Agreement with the Weizmann Institute of Science and Technion-Israel Institute of Technology and other individuals, including two stockholders of the Company (the "Licensor") to acquire a license of stem cell expansion technology related to bone marrow transplants.  The Company received an exclusive, worldwide license to use the technology over the life of the related patent.  The patent is currently in the application stage.  The license grants exclusivity over all products, uses and related intellectual property, and grants the Company the right to enter into sub-licenses.  According to the License Agreement, the Company is committed to pay the Licensor the aggregate amount of $400,000 of which $100,000 has been paid as of the balance sheet date and the
remainder is to be paid under the following terms:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>1.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>An additional $100,000 on the earlier of the date human testing starts or December 15, 2004; </font></p>

<p style=' margin-bottom:13.6pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>2.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The balance of $200,000 on the earlier of the date FDA approval is received for a product, or December 15, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>b.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>A royalty of 5% of monthly gross sales, and a 12.5% royalty on any other payments received by the Company for one time payments, such as distribution or sub-license rights, is payable to the Licensor within 30 days and 7 days, respectively.  The Company may also elect to pay 25% of all payments received under sub-licenses, in lieu of the 5% royalty on sales and the 12.5% royalty on lump sum payments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>c.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company is responsible for any costs incurred for the enforcement of the patent and related intellectual property.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-33</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="300" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 5 -</font></b></p> </td>
        <td width="204" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>KNOW-HOW, NET (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>d.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Licensor has the option to assign the patent to the Company in exchange for issuance by the Company of additional common shares to the Licensor.  This option is only exercisable by the Licensor within 60 days of the date on which the aggregate market capitalization of the Company's share capital reaches $25 million or more.  If the Licensor exercises this option, the Company will issue 5% of the Company's fully diluted and outstanding share capital on the date of exercise to the Licensor.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2><font face="Arial">&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="151" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>e.</font></p> </td>
        <td width="103" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Know-how, net</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="82%" style=' margin-left:90.15pt;border-collapse:collapse'>
    <tr>
        <td width="302" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td  colspan="4" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="22" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'>&nbsp;<b></b></p> </td>
        <td width="90" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Purchase of know-how</font></p> </td>
        <td width="22" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>400,000</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>400,000</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Imputed interest</font></p> </td>
        <td width="22" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(54,600)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(54,600)</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization</font></p> </td>
        <td width="22" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(80,593)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(11,513)</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Impairment</font></p> </td>
        <td width="22" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(264,807)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="302" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="22" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>333,887</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="139" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>f.</font></p> </td>
        <td width="91" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Amortization expenses amounted to $11,513 and $69,080 in the years ended June 30, 2003 and 2004, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="180" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>g.</font></p> </td>
        <td width="132" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Know-how licensors</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="86%" style=' margin-left:90.15pt;border-collapse:collapse'>
    <tr >
        <td width="329" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>June 30,</font></b><b></b></p> </td>
        <td  width="1">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="329" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="96" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:18.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="24" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: solid black .5pt;padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:17.25pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="329" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Due at December 15, 2004, without interest</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>100,000</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>100,000</font></p> </td> </tr>
    <tr>
        <td width="329" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Due at December 15, 2006, without interest</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>200,000</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>200,000</font></p> </td> </tr>
    <tr>
        <td width="329" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Less: unamortized discount based on interest rate of 7%</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(31,123)</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: solid black .5pt;padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(51,822)</font></p> </td> </tr>
    <tr>
        <td width="329" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>268,877</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>248,178</font></p> </td> </tr>
    <tr>
        <td width="329" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Less - current maturities</font></p> </td>
        <td width="20" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="96" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>100,000</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: solid black .5pt;padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td> </tr>
    <tr>
        <td width="329" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="20" valign=top style='border-bottom:solid black .5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="96" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>168,877</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: double black 1.5pt;padding: 0in 5.1pt 0in 5.1pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>248,178</font></p> </td> </tr>
    <tr>
        <td width="329" ></td>

        <td width="20" ></td>

        <td width="96" ></td>

        <td width="24" ></td>

        <td width="84" ></td>

        <td width="1" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-34</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="521" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 6:-</font></b></p> </td>
        <td width="425" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="530" style=' margin-left:62.05pt;border-collapse:collapse'>
    <tr>
        <td width="309" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style='border-bottom: solid black .5pt;padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:15.9pt;text-indent:-6.9pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Accrued expenses</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>105,117</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>86,428</font></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:15.9pt;text-indent:-6.9pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Employees and payroll accruals</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>73,598</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>46,136</font></p> </td> </tr>
    <tr>
        <td width="309" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="30" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>178,715</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>132,564</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.18in; text-indent:-0.39in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="397" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 7:-</font></b></p> </td>
        <td width="301" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>COMMITMENTS AND CONTINGENCIES</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>a.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The subsidiary leases facilities under operating lease agreements, which expire on January 2005 with an option to renew for one additional year.  The average monthly payment is NIS 30,000 (approximately $6,700) and is linked to the Israeli Consumer Price Index ("CPI"). </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>In order to secure these agreements, the subsidiary pledged a deposit with the bank in the amount of $18,705.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Lease expenses amounted to $34,803 and $80,655 for the years ended June 30, 2003 and June 30, 2004, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>b.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The subsidiary leases a car under operating lease agreement, which expire in May 2007.  The average monthly payment is NIS 3,379 (approximately $750) and is linked to the CPI. In order to secure this agreement, the subsidiary pledged a deposit with the bank in the amount of $2,254.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Lease expenses amounted to $0 and $750 for the years ended June 30, 2003 and June 30, 2004, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="422" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>c.</font></p> </td>
        <td width="374" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>As to commitments in respect of know-how acquired - see Note 5.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-35</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="237" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 8:-</font></b></p> </td>
        <td width="141" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>SHARE CAPITAL</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>a.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company's authorized common stock consists of 1,400,000,000 shares with a par value of $0.00001 per share.  All shares have equal voting rights and are entitled to one non-cumulative vote per share in all matters to be voted upon by stockholders.  The shares have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares.  Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by the Board of Directors out of funds legally available. The common stocks are registered and publicly traded on the Over-the-Counter Bulletin Board service of the National Association of Securities Dealers, Inc.  under the symbol PLRS.OB.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>b.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>On July 9, 2001, the Company issued 35,000,000 shares of common stock in consideration of $2,500, which was received on July 27, 2001.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>On October 14, 2002, the Company issued 14,133,000 shares of common stock at a price of $0.007 per common share in consideration of $100,950  before offering costs of $17,359.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>c.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>On March 19, 2003, two directors each returned 13,650,000 shares of common stock with a par value of $0.01 per share, for cancellation for no consideration.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>d.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>On March 27, 2003 the Company's Board of Directors authorized a 14:1 split of the common stock.  Accordingly, all references to number of shares, common stock and per share data in the accompanying financial statements have been adjusted to reflect the stock split on a retroactive basis.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>e.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>In July 2003, the Company issued an aggregate of 725,483 units comprised of 725,483 common stock and 1,450,966 warrants to a group of investors, for total consideration of $1,235,752 (net of issuance costs of $70,110), under a private placement.  The consideration was paid partly in the year ended June 30, 2003 ($933,464) and the balance was paid in the year ended June 30, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>In this placement each unit was comprised of one common stock and two warrants, the first warrant is exercisable for one common stock at a price of $2.25 per stock, and may be exercised within one year.  The second warrant is exercisable for one common stock at a price of $2.70 per stock, and may be exercised within five years.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-36</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="312" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 8:-</font></b></p> </td>
        <td width="216" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SHARE CAPITAL (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>f.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>On January 20, 2004, the Company consummated a private equity placement with a group of investors (the "investors").  The Company issued 3,000,000 units in consideration for net proceeds of $1,272,790 (net of issuance costs of $227,210), each unit is comprised of 3,000,000 common stock and 3,000,000 warrants. Each warrant is exercisable into one common stock at a price of $0.75 per stock, and may be exercised until January 31, 2007.  If the price of the common stock will be more than $1 within 10 consecutive trading days, then the Company may, by notice to the warrants' holders, reduce the expiry date of 1,500,000 warrants to 60 days from the day of notice.  In case the Company fails to register the above-mentioned shares and the related shares resulting from the exercise of the warrants, it will be
subject to penalties as detailed in the private placement agreement. On March 18, 2004, a registration statement on Form SB-2 has been declared affective and the above-mentioned common stocks have been registered for trading. If the effectiveness of the Registration Statement is suspended subsequent to the effective date of registration (March 18, 2004), for more than certain permitted periods, as described in the private equity placement agreement, the Company shall pay penalties to the investors in respect of the liquidated damages.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>According to EITF 00-19, "Accounting for derivative financial instruments indexed to, and potentially settled in, a Company's own stock", the Company classified the warrants as liabilities according to their fair value as remeasured at each reporting period until exercised or expired. Changes in the fair value of the warrants will be reported in the statements of operations as financial income or expense. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>As of June 20, 2004, the Company allocated the gross amount received of $1.5 million to the par value of the shares issued ($30) and to the liability in respect of the warrants issued ($1,499,970).  The amount allocated to the liability was less than the fair value of the warrants at grant date.  As of June 30, 2004, the fair value of the liability in respect for the warrants issued was $420,000.  The fair value as of June 30, 2004 was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: risk-free interest rate of 1.9%, expected dividend yield of 0%, expected volatility of 84%, and expected life of 2.75 years.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The change in the carrying amount of the liability in respect of the warrants in the period from the grant date until the balance sheet date amounts to $1,079,970 and was recognized in the statements of operations as financial income.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company is obligated to adjust the exercise price of the above mentioned warrants and to issue the investors additional shares if the Company enters into certain transactions, such as sale of its common stock to a third party on any date which is earlier than 180 days after the effective date of registration.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>In addition, the Company issued 300,000 warrants to finders in connection with this private placement exercisable into 300,000 common shares at a price of $0.75 per common share until January 31, 2007. The fair value of the warrants issued in the amounts of  $192,000 was recorded as deferred issuance costs and is amortized over a period of 3 years. On April 19, 2004, the finders exercised the warrants. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-37</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="312" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 8:-</font></b></p> </td>
        <td width="216" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SHARE CAPITAL (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>g.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Following the Board resolutions and authorizations from January 28, 2004, the Company issued on February 11, 2004, an aggregate amount of 1,000,000 common stock to a number of consultants and service providers as compensation for carrying out investor relations activities during the year 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Total compensation, measured as the grant date fair market value of the stock, amounted to $800,000 and was recorded as an operating expense in the statement of operations in the year ended June 30, 2004.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="279" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>h.</font></p> </td>
        <td width="231" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Employee Stock Option Plan ("ESOP")</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Under the Company's 2003 Stock Option Plan (the "Plan"), options may be granted to officers, directors, employees and consultants of the Company or its subsidiary.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Pursuant to the Plan, the Company reserved for issuance 4,100,000 of its common stock. As of June 30 2004, 610,954 common stock (including warrants) of the Company are still available for future grant under the terms of the Plan.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Each option granted under the Plan is exercisable over a period of two years from the date of grant of the option till expiration date of the Plan in the year 2013.  The exercise price of the options granted under the plan may not be less than the nominal value of the stock into which such options are exercised. The options vest primarily over two years.  Any options, which are canceled or forfeited before expiration, become available for future grants.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>On December 2003, the Company granted 2,976,591 options to employees and directors at an exercise price of $0.76. All options were granted with an exercise price that exceeded the quoted market price of the Company's stock on the date of grant. Fair value (determined using the Black-Scholes valuation model) of options granted was $0.29 at date of grant.  During the year ended June 30, 2004, 156,734 options were forfeited . As of June 30, 2004,  2,259,001 options are exercisable.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-38</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2> (A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="312" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 8:-</font></b></p> </td>
        <td width="216" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>SHARE CAPITAL (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="235" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>i.</font></p> </td>
        <td width="187" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Warrants issued to consultants:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>In the framework of the stock option plan, the Company issued on December 30, 2003, warrants to two consultants, for carrying out investor relation's activities over a period of two years.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="484" style=' margin-left:1.0in;border-collapse:collapse'>
    <tr>
        <td width="484" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Company's outstanding warrants to consultants as of June 30, 2004 are as follows:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.17in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="499" style=' margin-left:84.45pt;border-collapse:collapse'>
    <tr>
        <td width="113" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <br> <b><font size=2>Issuance date</font></b><b></b></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <b><font size=2>Outstanding as of June 30,</font></b><b></b></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="91" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Warrants exercisable as of June 30,</font></b><b></b></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="76" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Exercise price per stock</font></b><b></b></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><br> <b><font size=2>Exercisable through</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="113" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="91" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="113" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>December 2003</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>250,000</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="91" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>145,833</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$ 1.00</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>May 2013</font></p> </td> </tr>
    <tr>
        <td width="113" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>December 2003</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>250,000</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="91" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>145,833</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$ 1.25</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>May 2013</font></p> </td> </tr>
    <tr>
        <td width="113" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>December 2003</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>169,189</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="91" valign=top style='border-bottom:solid black .5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>126,892</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=2>$ 0.76</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=2>January 2013</font></p> </td> </tr>
    <tr>
        <td width="113" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>669,189</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="91" valign=top style='border-bottom:double black 1.5pt; '>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>418,558</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="76" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="8" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.17in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="372" style=' margin-left:1.0in;border-collapse:collapse'>
    <tr>
        <td width="372" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The options vest ratably over a period of three years ending 2006.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company accounted for its warrants to consultants under the fair value method in accordance of  SFAS 123 and EITF 96-18.  The fair value for these warrants was estimated using Black-Scholes option-pricing model with the following weighted-average assumptions for June 30, 2004: risk-free interest rates of 4.2%, expected dividend yield of 0%, expected volatility of 84%, and a weighted-average contractual life of the warrants of up to 10 years.  Compensation expenses of $357,618 were recognized during the year ended June 30, 2004 in accordance with EITF 96-18. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-39</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:right;'><b><font size=2>(A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="392" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 9:-</font></b></p> </td>
        <td width="296" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>FINANCIAL EXPENSES (INCOME), NET</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.38in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="93%" style=' margin-left:41.35pt;border-collapse:collapse'>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><br> <br> <br> <br> <br> <br> <b><font size=2>Year ended June 30, </font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="102" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><b><font size=2>For the period from </font></b><br> <b><font size=2>May 11, 2001</font></b><br> <b><font size=2>(date of incorporation) through  </font></b><br> <b><font size=2>June 30,</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="102" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="18" valign=top style='border-top:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="84" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2003</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="102" valign=top style='border-bottom:solid black .75pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2004</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:8.8pt;text-indent:-8.8pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Foreign currency translation differences </font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>8,126</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>3,487</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>$</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>11,613</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest on short-term bank credit</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>724</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,174</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest accrued on know-how licences</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,699</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,778</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>23,477</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest income on deposits</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(5,857)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(230)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(6,087)</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:8.75pt;text-indent:-8.75pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>Deferred issuance expenses amortization</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>62,104</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>62,104</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Change in fair value of warrants</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,079,970)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="102" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,079,970)</font></p> </td> </tr>
    <tr>
        <td width="246" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="102" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(994,174)</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,035</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>$</font></p> </td>
        <td width="102" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(984,690)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="213" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 10:-</font></b></p> </td>
        <td width="117" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>INCOME TAX</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><b><font size=2>Reconciliation of the theoretical tax expense (benefit) to the actual tax expense (benefit):</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>In the year ended June 30, 2004 the main reconciling items from the statutory tax rate of the Company (35%) to the effective tax rate (0%) is carryforward tax losses and tax exempt financial income, for which a full valuation allowance was provided.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="255" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="207" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net operating losses carryforwards</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company has accumulated losses for tax purposes as of June 30, 2004 of approximately $1,135,000, which may be carried forward and offset against taxable income until 2024.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The subsidiary has accumulated losses for tax purposes as of June 30, 2004 in the amount of approximately $1,315,000 that may be carried forward and offset against taxable income in the future for an indefinite period.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Utilization of U.S. net operating losses may be subject to a substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions.  The annual limitation may result in the expiration of net operating losses before utilization.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-40</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:right;'><b><font size=2>(A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="289" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 10:-</font></b></p> </td>
        <td width="193" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>INCOME TAX (continued)</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><b><font size=2>Deferred Income taxes</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>As of June 30, 2004, the Company and its subsidiary have provided valuation allowances of approximately $1 million in respect of deferred tax assets resulting from tax loss carryforwards.  Management currently believes that since the Company and its subsidiary have a history of losses it is more likely than not that the deferred tax regarding the loss carryforwards and other temporary differences will not be realized in the foreseeable future.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="303" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 11:-</font></b></p> </td>
        <td width="207" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>SEGMENT INFORMATION</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:13.6pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>The Company and its subsidiary operated primarily in two business segments (see Note 1 for a brief description of the Company's business) and follow the requirements of Statement of Financial Standard No. 131, "Disclosures about Segments of an Enterprise and Related Information" (SFAS No. 131).  In the periods prior to and subsequent to June 10, 2003 (acquisition date of the subsidiary) there was only one business segment.  The operation of the intelligence software segment were idled in May 2003.</font></p>

<p style=' margin-bottom:13.6pt; margin-top:0pt; margin-left:2.2in; text-indent:-2.2in;text-align:justify;'><font size=2><font face="Arial">&nbsp;</font></font></p>


<table border="0" cellspacing=0 cellpadding=0 width="92%" style=' margin-left:45.85pt;border-collapse:collapse'>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="5" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Year ended June 30, 2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:5.35pt;text-indent:-5.35pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:5.35pt;text-indent:-5.35pt;text-align:center;margin-top:0in;margin-bottom:0in'><b><font size=2>Stem cells</font></b><br> <b><font size=2>Expansion *</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Articial</font></b><br> <b><font size=2>Intelligence</font></b><br> <b><font size=2>Software</font></b><b></b></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p   align=center style='margin-right:-5.95pt;text-align:center'><b><font size=2>Total</font></b></p>  </td> </tr>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Research and development costs</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>55,371</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>24,500</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>79,871</font></p> </td> </tr>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>General and administrative expenses</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>112,957</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>17,662</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>130,619</font></p> </td> </tr>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>In-process research and development write off</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>246,470</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>246,470</font></p> </td> </tr>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>414,798</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>42,162</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>456,960</font></p> </td> </tr>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Financial expenses, net</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="81" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,458</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="90" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,577</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="84" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,035</font></p> </td> </tr>
    <tr>
        <td width="282" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Net loss</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="81" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>418,256</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="90" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>44,739</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=2>$</font></p> </td>
        <td width="84" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>462,995</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.38in; text-indent:-0.39in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="446" style=' margin-left:35.25pt;border-collapse:collapse'>
    <tr>
        <td width="49" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>*</font></p> </td>
        <td width="397" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Relates to the activity of the subsidiary conducted from June 10, 2003.  </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.02in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:1in;text-align:justify;'><font size=2>All of the Company's assets (on a consolidated basis as of June 30, 2003) relate to the Stem Cell Expansion segment that was conducted in Israel.  Virtually, all of the Artificial Intelligence Software activity was conducted in the United States.  As such in the year ended June 30, 2004, the Company operated in one business segment.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Identifiable assets in the United States and in Israel as of June 30, 2003 were $723,457 and $271,137, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>F-41</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC. AND ITS SUBSIDIARY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(A Development Stage Company)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>(Previous Name - A. I. SOFTWARE INC.)</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="679" style=' border-collapse:collapse'>
    <tr>
        <td width="679" valign=top style='border-bottom:solid black .75pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></b><b><u></u></b></p> </td> </tr>
    <tr>
        <td width="679" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>In U.S. Dollars</font></b><b><u></u></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.69in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="517" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 12:-</font></b></p> </td>
        <td width="421" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>TRANSACTIONS AND BALANCES OF RELATED PARTIES</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><b><font size=2>Balances with related parties</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.79in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="81%" style=' margin-left:90.4pt;border-collapse:collapse'>
    <tr >
        <td width="300" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="25" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><b><font size=2>June 30, </font></b><b></b></p> </td>
        <td  width="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="300" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="25" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td width="78" valign=top style='border-bottom:solid black .5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><b><font size=2>2004</font></b><b></b></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in;line-height:129.6%'>&nbsp;<b></b></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:solid black .5pt;padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><b><font size=2>2003</font></b><b></b></p> </td> </tr>
    <tr>
        <td width="300" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:8.8pt;text-indent:-8.8pt;text-align:left;margin-top:0in;margin-bottom: 0in;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="25" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="78" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="300" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:8.8pt;text-indent:-8.8pt;text-align:left;margin-top:1.5pt;margin-bottom: 0in;line-height:129.6%'><font size=2>Know-how licensors (included current maturities)</font></p> </td>
        <td width="25" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td width="78" valign=top style='border-bottom:double black 1.5pt; padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=2>268,877</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in;line-height:129.6%'><font size=2>$</font></p> </td>
        <td  colspan="2" valign=top style=' border-bottom:double black 1.5pt;padding:0in 5.35pt 0in 5.35pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt;line-height:129.6%'><font size=2>248,178</font></p> </td> </tr>
    <tr>
        <td width="300" ></td>

        <td width="25" ></td>

        <td width="78" ></td>

        <td width="24" ></td>

        <td width="88" ></td>

        <td width="3" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="277" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOTE 13:-</font></b></p> </td>
        <td width="181" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>SUBSEQUENT EVENTS</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>Subsequent to the balance sheet date, the Company's board of directors approved to modify the terms of 500,000 options granted to a consultant (of which 250,000 are with an exercise price of $1 and 250,000 with an exercise price of $1.25) to provide for a cashless exercise of the options. The board of directors also resolved that the options' exercise price will be reduced to $0.4 and that the options will be fully vested. In addition, it was resolved to grant the consultant additional 500,000 options with an exercise price of $0.4, vested immediately and with a cashless exercise feature.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.76in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.79in; text-indent:-0.79in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 54 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:center;'><font SIZE=2>CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>ON ACCOUNTING AND FINANCIAL DISCLOSURE</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On May 7, 2003, we dismissed our principal independent accountant, Davidson &amp; Company.  We engaged Marc Lumer &amp; Company, Certified Public Accountants and Management Consultants, as our principal independent accountant effective May 9, 2003.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The audit report of Davidson &amp; Company on our financial statements for the fiscal year ended June 30, 2002 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>In connection with the audit of the fiscal year ended June 30, 2002 including the subsequent interim periods since engagement through May 7, 2003, the date of dismissal, we had no disagreements with Davidson &amp; Company with respect to accounting or auditing issues of the type discussed in Item 304(a)(iv) of Regulation S-B.  Had there been any disagreements that were not resolved to their satisfaction, such disagreements would have caused Davidson &amp; Company to make reference in connection with their opinion to the subject matter of the disagreement.  In addition, during that time there were no reportable events (as defined in Item 304(a)(1)(iv) of Regulation S-B).</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>During the fiscal year ending June 30, 2002, including the subsequent interim periods since engagement through May 7, 2003, the date of dismissal of Davidson &amp; Company, and prior to the appointment of Marc Lumer &amp; Company, we (or anyone on our behalf) did not consult with Marc Lumer &amp; Company regarding any of the accounting or auditing concerns stated in Item 304(a)(2) of Regulation S-B.  Since there were no disagreements or reportable events (as defined in Item 304(a)(2) of Regulation S-B), we did not consult Marc Lumer &amp; Company in respect to these matters during the time periods detailed herein.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On July 1, 2003, we engaged Kost Forer, Gabbay &amp; Kasierer (a member firm of Ernst &amp; Young Global) as our new principal independent accountants with the approval of our Board of Directors.  Accordingly, we dismissed Marc Lumer &amp; Company on July 1, 2003.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>During the interim period from May 9, 2003 to July 1, 2003, there were no disagreements with Marc Lumer &amp; Company on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>In connection with the fiscal years ended June 30, 2002 and 2001 and the subsequent interim period through July 1, 2003, Kost Forer, Gabbay &amp; Kasierer was not consulted on any matter relating to accounting principles to a specific completed or proposed transaction or the type of audit opinion that might be rendered on our financial statements.  In connection with the fiscal years ended June 30, 2002 and 2001 and the subsequent interim period through July 1, 2003 preceding the change in accountants, Kost Forer, Gabbay &amp; Kasierer did not provide any written or oral advice that was an important factor considered by it in reaching any decision as to the accounting, auditing or financial reporting issues.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:center;'><font SIZE=2>WHERE YOU CAN FIND MORE INFORMATION</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission.  Our Securities and Exchange Commission filings are available to the public over the Internet at the SEC's website at http://www.sec.gov.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>You may also read and copy any materials we file with the Securities and Exchange Commission at the SEC's public reference room at 450 Fifth Street NW, Washington, D.C. 20549.  Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 55 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>We have filed with the Securities and Exchange Commission a registration statement on Form SB-2, under the Securities Act with respect to the securities offered under this prospectus.  This prospectus, which forms a part of that registration statement, does not contain all information included in the registration statement.  Certain information is omitted and you should refer to the registration statement and its exhibits.  With respect to references made in this prospectus to any contract or other document of Pluristem, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract or document.  You may review a copy of the registration statement at the SEC's public reference room.  Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms.  Our filings and the
registration statement can also be reviewed by accessing the SEC's website at http://www.sec.gov.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><b><font size=2>No finder, dealer, sales person or other person has been authorized to give any information or to make any representation in connection with this offering other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by Pluristem Life Systems, Inc.  This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.  Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that the information contained herein is correct as of any time subsequent to the
date of this prospectus.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 56 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:center;'><b><font SIZE=2>PART II - INFORMATION NOT REQUIRED IN PROSPECTUS</font></b></p>


<table border="0" cellspacing=0 cellpadding=0 width="356" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 24.</font></b></p> </td>
        <td width="260" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Indemnification of Directors and Officers.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2>Nevada corporation law provides that:</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not
be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper; and</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We may make any discretionary indemnification only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made:</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>by our board of directors by a majority vote of a quorum consisting of directors who are not parties to such action, suit or proceeding;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>if such a quorum is not obtainable, by a majority vote of the directors who were not parties to such action, suit or proceeding;</font></p> </td> </tr>
    <tr>
        <td width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>by independent legal counsel (selected by one or more of our directors, whether or not a quorum and whether or not disinterested) in a written opinion; or</font></p> </td> </tr>
    <tr >
        <td  width="24" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>
        <td colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>by our shareholders.</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="24" ></td>

        <td width="24" ></td>

        <td width="130" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our bylaws also provide for the indemnification of present and former directors and officers and each person who serves at our request as our officer or director.  We will indemnify such individuals against all costs, expenses and liabilities incurred in a threatened, pending or completed action, suit or proceeding brought because such individual </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 57 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>is our director or officer.  Such individual must have conducted himself/herself in good faith and reasonably believed that his conduct was in, or not opposed to, our best interest.  In a criminal action he must not have had a reasonable cause to believe his conduct was unlawful. This right of indemnification shall not be exclusive of other rights that the individual is entitled to as a matter of law or otherwise.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We will not indemnify an individual adjudged liable due to his negligence or willful misconduct toward us, adjudged liable to us, or if he/she improperly received personal benefit.  Indemnification in a derivative action is limited to reasonable expenses incurred in connection with the proceeding.  Also, we are authorized to purchase insurance on behalf of an individual for liabilities incurred whether or not we would have the power or obligation to indemnify him pursuant to our bylaws.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Our bylaws provide that individuals may receive advances for expenses if the individual provides a written undertaking to repay the advance unless it shall ultimately be paid by our company as authorized under our bylaws.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We have also entered into Indemnity Agreements with our directors and officers and former directors, including Messrs. Harvey Lawson, Meir Segev, Shai Meretzki, Shmuel Levi, Robert Pico, Doron Shorrer, Menachem (Mendi) Ze&#146;evi, Yossi Keret, and Dr. Irit Arbel and Ms. Hava Meretzki.  Under the Indemnity Agreements, we are obligated to indemnify and hold harmless the above named directors and officers from and against any and all costs, expenses, or liabilities, arising in law or in equity or under statute, regulation or governmental ordinance of any jurisdiction, common law or otherwise (including legal or other professional fees), which they may suffer in connection with any lawsuit, proceeding, investigation or claim which may be brought or threatened against these directors and officers for any act or in respect of any omission to do by them, in connection with to the management, activities or affairs
of our company or the exercise by the directors and officers of their powers or the performance of their duties as a director or officer of our company, whether incurred by reason of negligence, default, breach of duty, failure to exercise due diligence.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Under the Indemnity Agreements, we are also obligated to indemnify and hold harmless the directors and officers from and against any and all costs, fees, damages or liabilities which the directors or officers may suffer, or incur in connection with investigating, initiating, defending, preparing for, providing evidence in, instructing and receiving the advice of his own or other counsel, or any amount paid to satisfy any judgment made, fine imposed, damages or costs or any amount paid or liability incurred by the directors and officers to settle such claims, or any amount of tax assessed against the directors and officers in respect of any indemnity under the Indemnity Agreements.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Under the Indemnity Agreements , we are specifically obligated to indemnify and hold harmless the directors and officers from and against all charges, assessments and liabilities arising by operation of statute and incurred by the directors and officers in relation to the management, operations, activities or affairs of our company in their  capacity as our director or officer, including but not limited to all statutory obligations to employees, suppliers, contractors, subcontractors, repairers and the like and any government or any agency or division of any government, whether federal, provincial, state, regional or municipal.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>However, we will not be obligated to indemnify and hold harmless the directors and officers under the Indemnity Agreements if the director or officer&#146;s failure to act constituted a breach of his fiduciary duties as an officer, and his breach of those duties involved intentional misconduct, fraud or a knowing violation of law.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>We have also purchased directors and officers liability insurance to protect our directors and officers from potential liabilities.  The limit of liability of our directors and officers liability insurance is $4,000,000 and the policy period will expire on December 31, 2005 unless further renewed.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of our company under Nevada law or otherwise, we have been advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.  In the event a claim for indemnification against such liabilities (other than payment by us for expenses incurred or paid by a director, officer or controlling person of our company in successful defense of any action, suit, or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 58 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>been settled by controlling precedent, submit to a court of appropriate jurisdiction, the question of whether such indemnification by it is against public policy in the Securities Act of 1933 and will be governed by the final adjudication of such issue.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="374" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 25.</font></b></p> </td>
        <td width="278" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Other Expenses of Issuance and Distribution.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The following table sets forth the costs and expenses payable by us in connection with the issuance and distribution of the securities being registered hereunder.  No expenses shall be borne by the selling security holder.  All of the amounts shown are estimates, except for the SEC Registration Fees.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td width="511" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in;line-height:normal'><font size=2>SEC registration fees</font></p> </td>
        <td width="127" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:right;line-height:normal; '><font size=2>$2,271.35</font></p> </td> </tr>
    <tr>
        <td width="511" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in;line-height:normal'><font size=2>Printing and engraving expenses</font></p> </td>
        <td width="127" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:right;line-height:normal; '><font size=2>$2,000.00</font><sup><font size=2>(1)</font></sup></p> </td> </tr>
    <tr>
        <td width="511" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in;line-height:normal'><font size=2>Accounting fees and expenses</font></p> </td>
        <td width="127" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:right;line-height:normal; '><font size=2>$16,000.00</font><sup><font size=2>(1)</font></sup></p> </td> </tr>
    <tr>
        <td width="511" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in;line-height:normal'><font size=2>Legal fees and expenses</font></p> </td>
        <td width="127" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:right;line-height:normal; '><font size=2>$35,000.00</font><sup><font size=2>(1)</font></sup></p> </td> </tr>
    <tr>
        <td width="511" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in;line-height:normal'><font size=2>Transfer agent and registrar fees</font></p> </td>
        <td width="127" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:right;line-height:normal; '><font size=2>$2,000.00</font><sup><font size=2>(1)</font></sup></p> </td> </tr>
    <tr>
        <td width="511" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in;line-height:normal'><font size=2>Fees and expenses for qualification under state securities laws</font></p> </td>
        <td width="127" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:right;line-height:normal; '><font size=2>$0.00</font></p> </td> </tr>
    <tr>
        <td width="511" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:1.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in;line-height:normal'><font size=2>Miscellaneous</font></p> </td>
        <td width="127" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:right;line-height:normal; '><font size=2>$2,000.00</font><sup><font size=2>(1)</font></sup></p> </td> </tr>
    <tr>
        <td width="511" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:6.0pt;margin-right:0in;margin-bottom: 3.0pt;margin-left:0in;line-height:normal'><font size=2>Total</font></p> </td>
        <td width="127" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=right style='margin-top:6.0pt;margin-right:0in; margin-bottom:3.0pt;margin-left:0in;text-align:right;line-height:normal; '><font size=2>$59,271.35</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:6pt;text-align:left;'><sup><font size=2>(1)</font></sup><font size=2> We have estimated these amounts.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="342" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 26.</font></b></p> </td>
        <td width="246" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Recent Sales of Unregistered Securities.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On October 25, 2004, we commenced a private placement offering with a group of investors who subscribed for units of our securities pursuant to Common Stock and Warrant Purchase Agreement dated for reference on October 25, 2004.  For the sake of clarity, we have referred to this private placement offering as the October 25, 2004 Private Placement.  The October 25, 2004 Private Placement closed in four different tranches:   </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On November 30, 2004, we closed the first tranche of the October 25, 2004 Private Placement and issued 3,250,000 units at a price of $0.10 per unit to seven investors for total gross proceeds of $325,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On January 26, 2005, we closed the second tranche of the October 25, 2004 Private Placement and issued 4,300,000 units at a price of $0.10 per unit to nine investors for total gross proceeds of $430,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On March 3, 2005, we closed the third tranche of the October 25, 2004 Private Placement and issued 750,000 units at a price of $0.10 per unit to four investors for total gross proceeds of $75,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On March 23, 2005, we closed the fourth tranche of the October 25, 2004 Private Placement and issued 200,000 units at a price of $0.10 per unit to one investor for total gross proceeds of $20,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>We also committed to pay cash in the amount of $24,500 and issued warrants to purchase 245,000 shares of our common stock to certain selling security holders as consideration for their services to our company as placement </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 59 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>agents for the October 25, 2004 Private Placement.  The warrants are exercisable at a per share exercise price equal to $0.10.  This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on the second annual anniversary date of the date when the warrants are issued. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>All of the subscriptions in the October 25, 2004 Private Placement were private in nature, and the securities were issued in reliance upon Regulation S and/or Rule 506 of Regulation D promulgated under the Securities Act of 1933.  Each of the following person was required to represent, among other things, in his or her subscription agreement, that he or she was making the investment for his or her own account and not with a view to distribution of the securities, that he or she would not sell, transfer, assign or otherwise dispose of the securities except in compliance with all applicable securities laws, and that he or she is an accredited investor, as such term is defined in Regulation D of the Securities Act, or that he or she is not a U.S. person, was not offered the securities in the United States and did not execute or deliver the subscription agreement in the United States:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="601" style=' border-collapse:collapse'>
    <tr>
        <td width="157" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:6.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Name of Stockholder </font></b><b></b></p>  </td>
        <td width="222" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:6.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Residency</font></b><b></b></p>  </td>
        <td width="222" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center;  line-height:normal;margin-bottom:0.5pt'><b><font size=2>Number of Units  of Securities Subscribed</font></b><b></b></p>  </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Park Ridge Investments A.V.V. c/o Braun &amp; Goldberg</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>New York, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>1,000,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Shaya Britz</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Brooklyn, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>500,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>GlenRock Israel Ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Hertzeliya, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>600,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Bezalel Ziv Ron</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Raanana, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>100,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Alshuler-Shaham Ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Tel Aviv, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>300,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>ROLFE Investments Ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Jerusalem, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>250,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Eshed Dash Ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Rishon Lezion, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>500,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Dahav Financial Systems Ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Tel Aviv, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>300,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Platinum Partners Value Arbitrage Fund L.P.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>New York, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>1,000,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Yosef Solt</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Misgav, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>250,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Ori Ackerman</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Misgav, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>250,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Iris Nehoray</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Nave Savion Or Yehuda, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>600,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Elazar Nehoray</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Bustan Hagalil, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>600,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Ilana Nehoray</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Karmiel, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>600,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Osnat Nehoray</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Karmiel, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>600,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Avinoam Rapaport</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Givataim, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>100,000</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 60 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="601" style=' border-collapse:collapse'>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Kopelman Ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Haifa, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>250,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Tibo Marcovich</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Tel Aviv, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>200,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Shlomo Shmuelov</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Yuvalim, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>250,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Ilana Rachmilovitz</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Karmiel, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>50,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Rockwell Invest ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Tortola, British Virgin Islands</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>200,000</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On January 24, 2005, we commenced another private placement offering with a group of investors who subscribed for units of our securities pursuant to Common Stock and Warrant Purchase Agreement dated for reference on January 24, 2005.  For the sake of clarity, we have referred to this private placement offering as the January 24, 2005 Private Placement.  We closed the January 24, 2005 Private Placement on March 3, 2005 and issued 12,000,000 units at a price of $0.10 per unit to fifteen investors for total gross proceeds of $1,200,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.  </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We issued 1,845,000 shares of our common stock to five selling security holders as consideration for their services to our company for financial advice and as placement agents for the January 24, 2005 Private Placement.  We are obligated to register these shares of our common stock under the Securities Act.  We also issued warrants to purchase 475,000 shares of our common stock to seven selling security holders as consideration for their services to our company for financial advice and as placement agents for the January 24, 2005 Private Placement. These warrants are exercisable at a per share exercise price equal to $2.50.  This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on November 30, 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>All of the subscriptions in the January 24, 2005 Private Placement were private in nature, and the securities were issued in reliance upon Regulation S and/or Rule 506 of Regulation D promulgated under the Securities Act of 1933.  Each of the following person was required to represent, among other things, in his or her subscription agreement, that he or she was making the investment for his or her own account and not with a view to distribution of the securities, that he or she would not sell, transfer, assign or otherwise dispose of the securities except in compliance with all applicable securities laws, and that he or she is an accredited investor, as such term is defined in Regulation D of the Securities Act, or that he or she is not a U.S. person, was not offered the securities in the United States and did not execute or deliver the subscription agreement in the United States:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="601" style=' border-collapse:collapse'>
    <tr>
        <td width="157" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:6.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Name o</font></b><font size=2>f</font><b><font size=2> Stockholder </font></b><b></b></p>  </td>
        <td width="222" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:6.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Residency</font></b><b></b></p>  </td>
        <td width="222" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center;  line-height:normal;margin-bottom:0.5pt'><b><font size=2>Number of Units  of Securities Subscribed</font></b><b></b></p>  </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Joseph Corso</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Staten Island, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>7,000,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Kevin Klier</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Stuart, Florida.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>1,500,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Frank Santo Jr.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Brooklyn, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>800,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Danielle Inserra</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Staten Island, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>500,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Michele Inserra</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Staten Island, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>500,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Christopher Short</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Marlboro, New Jersey</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>250,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Robert V. Clark</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Colts Neck, New Jersey</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>250,000</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 61 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="601" style=' border-collapse:collapse'>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Gina M. Brody</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Staten Island, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>200,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Joseph De Francesco</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>LIB, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>200,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Joseph Greco Sr.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Staten Island, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>200,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Sean Walter</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Munroe, New Jersey</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>200,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Joseph Greco Jr.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Staten Island, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>100,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Candace Lee</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Freehold, New Jersey</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>100,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Mauricio Perez</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Middletown, New Jersey</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>100,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>David P. Johnson</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Chatham, New Jersey</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>100,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Carlthon Corp.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Brooklyn, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>1,200,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Mark Zegal</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Brooklyn, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>600,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>David Buch</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Tel Aviv, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>15,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Kinianie Barehet Ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Jerusalem, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>20,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal'><font size=2>Erets Macamel Ltd.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>Haifa, Israel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal'><font size=2>10,000</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On January 31, 2005, we commenced a private placement offering with a group of investors who subscribed for units of our securities pursuant to Private Placement Subscription Agreement dated for reference on January 31, 2005.  For the sake of clarity, we have referred to this private placement offering as the January 31, 2005 Private Placement.  The January 31, 2005 Private Placement closed in three different tranches:   </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>On February 16, 2005, we completed the first tranche of the January 31, 2005 Private Placement effective January 31, 2005 and issued 7,000,000 units at a price of $0.10 per unit to two investors for total gross proceeds of $700,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On February 16, 2005, we closed the second tranche of the January 31, 2005 Private Placement and issued 4,500,000 units at a price of $0.10 per unit to six investors for total gross proceeds of $450,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>On February 17, 2005, we closed the third tranche of the January 31, 2005 Private Placement and issued 500,000 units at a price of $0.10 per unit to one investor for total gross proceeds of $50,000.  Each unit consists of one common share and one share purchase warrant.  Each warrant shall entitle the holder to purchase one additional common share at a price of $0.30 per share until November 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>We also paid cash in the amount of $60,000 and issued warrants to purchase 600,000 shares of our common stock to a selling security holder as consideration for its services to our company as a placement agent for the January 31, 2005 Private Placement.  The warrants are exercisable at a per share exercise price equal to $0.10.  This exercise price is also subject to adjustment if there are certain capital adjustments or similar transactions, such as a stock split or merger.  The warrants expire on June 30, 2006.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 62 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>All of the subscriptions in the January 31, 2005 Private Placement were private in nature, and the securities were issued in reliance upon Regulation S and/or Rule 506 of Regulation D promulgated under the Securities Act of 1933.  Each of the following person was required to represent, among other things, in his or her subscription agreement, that he or she was making the investment for his or her own account and not with a view to distribution of the securities, that he or she would not sell, transfer, assign or otherwise dispose of the securities except in compliance with all applicable securities laws, and that he or she is an accredited investor, as such term is defined in Regulation D of the Securities Act, or that he or she is not a U.S. person, was not offered the securities in the United States and did not execute or deliver the subscription agreement in the United States:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="601" style=' border-collapse:collapse'>
    <tr>
        <td width="157" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:6.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Name of Stockholder </font></b><b></b></p>  </td>
        <td width="222" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:6.0pt;margin-right:0in;  margin-bottom:6.0pt;margin-left:0in;text-align:center;  page-break-after:avoid'><b><font size=2>Residency</font></b><b></b></p>  </td>
        <td width="222" valign=bottom style='background:#E5E5E5;  padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center;  line-height:normal;margin-bottom:0.5pt'><b><font size=2>Number of Units  of Securities Subscribed</font></b><b></b></p>  </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Stonestreet Limited Partnership</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Toronto, Ontario</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>4,000,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Whalehaven Capital Fund imited</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Hamilton, Bermuda</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>3,000,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Alpha Capital AG</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Vaduz, Liechtenstein</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>1,000,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Bristol Capital Advisors, LLC</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Los Angeles, California</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>1,500,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Shimon Vogel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Far Rockaway, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>500,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Tower Paper Co. Inc. Retirement Plan</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Far Rockaway, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>250,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Mordechai Vogel</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Far Rockaway, New York</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>250,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>Yokim Asset Management Corp.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Geneva, Switzerland</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>1,000,000</font></p> </td> </tr>
    <tr>
        <td width="157" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:12.0pt;line-height:normal;margin-bottom:0.5pt'><font size=2>David Klugmann Associates Inc.</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>Lakewood, New Jersey</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  align=center style='margin-top:12.0pt;text-align:center; line-height:normal;margin-bottom:0.5pt'><font size=2>5,000,000</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>On March 23, 2005 , we issued 2,400,000 shares of our common stock and 2,400,000 common stock purchase warrants as a bonus to our Chief Executive Officer, Dr. Shai Meretzki, in connection with the issuance of a Notice of Allowance by the United States Patent Office for our patent application number 09/890,401. Each warrant is exercisable until November 30, 2006 into one common share at a price of $0.30 per share. We have agreed to register the shares issuable on exercise of the warrants. The securities are to be issued in reliance on Regulation S. Dr. Meretzki resides in Haifa, Israel. </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="166" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item. 27.</font></b></p> </td>
        <td width="70" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Exhibits.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><i><font size=2>Exhibits required by Item 601 of Regulation S-B</font></i></p>


<table border="0" cellspacing=0 cellpadding=0 width="648" style=' border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(3)</font></b></p> </td>
        <td width="231" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Articles of Incorporation and Bylaws</font></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Articles of Incorporation (incorporated by reference from our registration statement on Form SB-2 filed September 10, 2001).</font></p> </td>
        <td  width="24">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.2</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Bylaws (incorporated by reference from our registration statement on Form SB-2 filed September 10, 2001).</font></p> </td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="231" ></td>

        <td width="345" ></td>

        <td width="24" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 63 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.3</font></p> </td>
        <td  colspan="8" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restated Bylaws (incorporated by reference from our Quarterly Report on Form 10-QSB filed November 19, 2003).</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(5)</font></b></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Opinion on Legality</font></b></p> </td>
        <td   colspan="5">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.1</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Opinion of Clark, Wilson regarding the legality of the securities being registered.</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(10)</font></b></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Material Contracts</font></b></p> </td>
        <td   colspan="6">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.1</font></p> </td>
        <td  colspan="8" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Software Development Agreement (incorporated by reference from our registration statement on Form SB-2 filed September 10, 2001). </font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.2</font></p> </td>
        <td  colspan="8" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exclusive, World Wide Patent and Technology License and Assignment Agreement (incorporated by reference from our Current Report on Form 8-K filed May 6, 2003). </font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.3</font></p> </td>
        <td  colspan="8" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Common Stock and Warrant Pruchase Agreement between our company and each of the following investors who participated in the October 25, 2004 Private Placement:</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0in'><b><font size=2>Amount of Common Shares and Warrants Purchased</font></b><b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Park Ridge Investments A.V.V.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,000,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shaya Britz</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>GlenRock Israel Ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Bezalel Ziv Ron</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Alshuler-Shaham Ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>300,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>ROLFE Investments Ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Eshed Dash Ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Dahav Financial Systems Ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>300,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Platinum Partners Value Arbitrage Fund L.P.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,000,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Yosef Solt</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ori Ackerman</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Iris Nehoray</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Elazar Nehoray</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ilana Nehoray</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Osnat Nehoray</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Avinoam Rapaport</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Kopelman Ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Tibo Marcovich</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shlomo Shmuelov</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ilana Rachmilovitz</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>50,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Rockwell Invest ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

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        <td width="0" ></td>

        <td width="129" ></td>

        <td width="5" ></td>

        <td width="154" ></td>

        <td width="167" ></td>

        <td width="55" ></td>

        <td width="65" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 64 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.4</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Investors&#146; Rights Agreement between our company and each of the following investors who participated in the the October 25, 2004 Private Placement:</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Park Ridge Investments A.V.V.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shaya Britz</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>GlenRock Israel Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Bezalel Ziv Ron</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Alshuler-Shaham Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>ROLFE Investments Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Eshed Dash Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Dahav Financial Systems Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Platinum Partners Value Arbitrage Fund L.P.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Yosef Solt</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ori Ackerman</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Iris Nehoray</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Elazar Nehoray</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ilana Nehoray</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Osnat Nehoray</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Avinoam Rapaport</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Kopelman Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Tibo Marcovich</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shlomo Shmuelov</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ilana Rachmilovitz</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Rockwell Invest ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.5</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Escrow Agreement between our company and each of the following investors who participated in the October 25, 2004 private placement: </font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Park Ridge Investments A.V.V.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shaya Britz</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>GlenRock Israel Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Bezalel Ziv Ron</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Alshuler-Shaham Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>ROLFE Investments Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Eshed Dash Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Dahav Financial Systems Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Platinum Partners Value Arbitrage Fund L.P.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="1" ></td>

        <td width="264" ></td>

        <td width="246" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 65 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style=' margin-left:5.0pt;border-collapse:collapse'>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Yosef Solt</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ori Ackerman</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Iris Nehoray</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Elazar Nehoray</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ilana Nehoray</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Osnat Nehoray</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Avinoam Rapaport</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Kopelman Ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Tibo Marcovich</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shlomo Shmuelov</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ilana Rachmilovitz</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Rockwell Invest ltd.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.6</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Warrants between our company and each of the following investors who participated in the October 25, 2004 private placement:</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Amount of Warrants</font></b><b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Park Ridge Investments A.V.V.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,000,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shaya Britz</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>GlenRock Israel Ltd.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Bezalel Ziv Ron</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Alshuler-Shaham Ltd.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>300,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>ROLFE Investments Ltd.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Eshed Dash Ltd.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Dahav Financial Systems Ltd.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>300,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Platinum Partners Value Arbitrage Fund L.P.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,000,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Yosef Solt</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ori Ackerman</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Iris Nehoray</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Elazar Nehoray</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ilana Nehoray</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Osnat Nehoray</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>600,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Avinoam Rapaport</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Kopelman Ltd.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Tibo Marcovich</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shlomo Shmuelov</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ilana Rachmilovitz</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>50,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="1" ></td>

        <td width="264" ></td>

        <td width="42" ></td>

        <td width="204" ></td>

        <td width="65" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 66 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style=' margin-left:5.0pt;border-collapse:collapse'>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Rockwell Invest ltd.</font></p> </td>
        <td width="204" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.7</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Agents&#146; Warrants between our company and each of the following agents who participated in the October 25, 2004 private placement:</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Amount of Warrants Exercisable at $0.10 per Share </font></b><b></b></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Yokim Asset Management Corp.</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=2>50,000</font></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Yosef Solt</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=2>12,500</font></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Ori Ackerman</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=2>25,000</font></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>David Buch</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=2>30,000</font></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Shmuel Even</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=2>60,000 (pursuant to two separate agreements)</font></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in; page-break-after:avoid'><font size=2>Avinoam Rapaport</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=2>10,000</font></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Izhak Brown</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=2>10,000</font></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Amnon Dardik</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=2>12,500</font></p> </td>
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.8</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Common Stock and Warrant Pruchase Agreement between our company and each of the investors who participated in the January 24, 2005 private placement.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Amount of Common Shares and Warrants Purchased</font></b><b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Corso</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>7,000,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Kevin Klier</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,500,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Frank Santo JR.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>800,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Danielle Inserra</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michelle Inserra</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Christopher Short</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Robert V. Clark</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Gina M. Brody</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph De Francesco</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Greco SR.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sean Walter</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Greco JR.</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Candace Lee</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mauricio Perez</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>David P. Johnson</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.9</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Investors&#146; Rights Agreement between our company and each of the following investors who participated in the the January 24, 2005 private placement: </font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="1" ></td>

        <td width="264" ></td>

        <td width="42" ></td>

        <td width="204" ></td>

        <td width="18" ></td>

        <td width="47" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 67 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<table border="0" cellspacing=0 cellpadding=0 width="624" style=' margin-left:5.0pt;border-collapse:collapse'>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Corso</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Kevin Klier</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Frank Santo JR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Danielle Inserra</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michelle Inserra</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Christopher Short</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Robert V. Clark</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Gina M. Brody</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph De Francesco</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Greco SR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sean Walter</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Greco JR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Candace Lee</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mauricio Perez</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>David P. Johnson</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.10</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Escrow Agreement between our company and each of the following investors who participated in the January 24, 2005 private placement:</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Corso</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Kevin Klier</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Frank Santo JR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Danielle Inserra</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michelle Inserra</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Christopher Short</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Robert V. Clark</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Gina M. Brody</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph De Francesco</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Greco SR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sean Walter</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Greco JR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Candace Lee</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mauricio Perez</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>David P. Johnson</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.11</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Warrants between our company and each of the following investors who participated in the January 24, 2005 private placement: </font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Amount of Warrants Exercisable at $0.10 per Share</font></b><b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Corso</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>7,000,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Kevin Klier</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,500,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Frank Santo JR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>800,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Danielle Inserra</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michelle Inserra</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Christopher Short</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Robert V. Clark</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="1" ></td>

        <td width="264" ></td>

        <td width="246" ></td>

        <td width="65" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 68 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style=' margin-left:5.0pt;border-collapse:collapse'>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Gina M. Brody</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph De Francesco</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Greco SR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sean Walter</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>200,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Joseph Greco JR.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Candace Lee</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mauricio Perez</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>David P. Johnson</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>100,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.12</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Common Stock Pruchase Agreement between our company and each of the following financial advisers who participated in the January 24, 2005 private placement:</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Amount of Common Shares</font></b><b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mark Zegal</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>600,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>David Buch</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Kanyanei Bar-Reket Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>20,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Eretz Hacarmel Ltd.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.13</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Agents&#146; Warrants between our company and each of the following agents who participated in the January 24, 2005 private placement: </font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Amount of Warrants Exercisable at $2.50</font></b><b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in; page-break-after:avoid'><font size=2>Ori Ackerman</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in; page-break-after:avoid'><font size=2>440,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>David Buch</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>10,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Amir Uziel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>25,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.14</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Finder&#146;s Fee Agreement between our company and Carlthon Corp. in respect of the January 24, 2005 private placement. </font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.15</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Private Placement Subscription Agreement between our company and each of the following investors who participated in the January 31, 2005 private placement: </font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><b><font size=2>Amount of Common Shares</font></b><b></b></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0in;text-align: left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Stonestreet Limited Partnership</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>4,000,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Whalehaven Capital Fund Limited</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>3,000,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Alpha Capital AG</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,000,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Bristol Capital Advisors LLC</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,500,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Shimon Vogel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Tower Paper Co Inc. Retirement Plan</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mordechai Vogel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Yokim Asset Management Corp.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,000,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>David Klugman Associates Inc.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td  width="65">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="1" ></td>

        <td width="264" ></td>

        <td width="246" ></td>

        <td width="65" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in; text-indent:-0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 69 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0  style=' border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.16</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Investors&#146; Rights Agreement between our company and each of the following investors who participated in the January 31, 2005 private placement: </font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Stonestreet Limited Partnership</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Whalehaven Capital Fund Limited</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Alpha Capital AG</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Bristol Capital Advisors LLC</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Shimon Vogel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Tower Paper Co Inc. Retirement Plan</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mordechai Vogel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Yokim Asset Management Corp.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>David Klugman Associates Inc.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.17</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Escrow Agreement between our company and and each of the following investors who participated in the January 31, 2005 private placement: </font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Stonestreet Limited Partnership</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Whalehaven Capital Fund Limited</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Alpha Capital AG</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Bristol Capital Advisors LLC</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Shimon Vogel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Tower Paper Co Inc. Retirement Plan</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mordechai Vogel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Yokim Asset Management Corp.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>David Klugman Associates Inc.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.18</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 6.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form of Warrants between our company and each of the following investors who participated in the January 31, 2005 private placement: </font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Name</font></b><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><b><font size=2>Amount of Warrants Exercisable at $0.30 per Share (unless otherwise indicated)</font></b><b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'>&nbsp;<b></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Stonestreet Limited Partnership</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>4,000,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>Whalehaven Capital Fund Limited</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>3,000,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Alpha Capital AG</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,000,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Bristol Capital Advisors LLC</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,500,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Shimon Vogel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Tower Paper Co Inc. Retirement Plan</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Mordechai Vogel</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>250,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Yokim Asset Management Corp.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>1,000,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>David Klugman Associates Inc.</font></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p  style='margin-top:0in'><font size=2>500,000</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="264" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>Yokim Asset Management Corp.</font><b></b></p> </td>
        <td width="246" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=2>600,000 (exercisable at $0.10 per share)</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.19</font></p> </td>
        <td  colspan="5" valign=top style='padding:.25in 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Agent&#146;s Purchase Agreement between our company and Yokim Asset Management Corp. in respect of the</font></p> </td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="0" ></td>

        <td width="264" ></td>

        <td width="246" ></td>

        <td width="65" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 70 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="213" style=' margin-left:.5in;border-collapse:collapse'>
    <tr>
        <td width="213" valign=top style='padding:.25in 0in 0in 0in'>
            <p  style='margin-top:0in;line-height:normal'><font size=2>January 31, 2005 private placement.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>10.20&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agent&#146;s Warrant between our company and Yokim Asset Management Corp. in respect of the January 31, &nbsp;&nbsp;&nbsp;2005 private placement.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style=' border-collapse:collapse'>
    <tr >
        <td  width="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(16)</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Letter on Change in Certifying Accountant</font></b></p> </td>
        <td  width="310">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.1</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Letter from Davidson &amp; Company, Chartered Accountants, dated May 7, 2003 (incorporated by reference from our Current Report on Form 8-K filed May 13, 2003).</font></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.2</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Letter from Marc Lumer &amp; Company, Certified Public Accoutants, dated July 7, 2003 (incorporated by reference from our Current Report on Form 8-K filed July 8, 2003).</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(21)</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Subsidiaries</font></b></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="3" ></td>

        <td width="45" ></td>

        <td width="0" ></td>

        <td width="90" ></td>

        <td width="176" ></td>

        <td width="310" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>Pluristem, Ltd., an Israeli company.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="496" style=' border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(23)</font></b></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Consent of Independent Registered Public Accounting Firm and Counsel</font></b></p> </td>
        <td  width="12">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>23.1</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Consent of Clark, Wilson (contained in Exhibit 5).</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>23.2</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Consent of Kost Forer Gabbay &amp; Kasierer, a member of Ernst &amp; Young Global.</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 28.</font></b></p> </td>
        <td width="102" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Undertakings.</font></b></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="48" ></td>

        <td width="102" ></td>

        <td width="140" ></td>

        <td width="146" ></td>

        <td width="12" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The undersigned company hereby undertakes that it will:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(1)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="421" style=' margin-left:1.0in;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td width="373" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>any prospectus required by Section 10(a)(3) of the Securities Act;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:left;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:left;'><font size=2>(c)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>any additional or changed material information with respect to the plan of distribution not previously disclosed in the registration statement;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(2)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>for the purpose of determining any liability under the Securities Act, each of the post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof; and</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(3)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of our company pursuant to the foregoing provisions, or otherwise, our company has been advised that in the opinion of the Commission that type of indemnification is against public policy as expressed in </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 71 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>the Securities Act and is, therefore, unenforceable.  In the event that a claim for indemnification against said liabilities (other than the payment by our company of expenses incurred or paid by a director, officer or controlling person of our company in the successful defense of any action, suit or proceeding) is asserted by the director, officer or controlling person in connection with the securities being registered, our company will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of the issue.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 72 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:center;'><b><font SIZE=2>SIGNATURES</font></b></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Haifa, Israel on April 26, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Shai Meretzki</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dr. Shai Meretzki, Chief Executive Officer </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>(Principal Executive Officer)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated:  April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Yossi Keret</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Yossi Keret, Chief Financial Officer </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>(Principal Financial and Accounting Officer)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated:  April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Doron Shorrer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Doron Shorrer, Chairman of the Board and Director</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Hava Meretzki</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Hava Meretzki, Director</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Yoram Drucker</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Yoram Drucker, Director</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Israel Ben-Yoram</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Israel Ben-Yoram, Director</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 73 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:center;'><b><font SIZE=2>POWER OF ATTORNEY</font></b></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>KNOW ALL PERSONS BY THESE PRESENTS, that each person who signature appears below constitutes and appoints Dr. Shai Meretizki as his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or any of them, or of their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><font size=2>Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates stated.</font></p>

<p style=' margin-bottom:0pt; margin-top:18pt;text-align:left;'><b><font size=2>Signatures</font></b></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Dr. Shai Meretzki</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dr. Shai Meretzki, Chief Executive Officer </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>(Principal Executive Officer)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated:  April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Yossi Keret</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Yossi Keret, Chief Financial Officer </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>(Principal Financial and Accounting Officer)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated:  April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Doron Shorrer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Doron Shorrer, Chairman of the Board and Director</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Hava Meretzki</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Hava Meretzki, Director</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Yoram Drucker</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Yoram Drucker, Director</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>By:  /s/ Israel Ben-Yoram</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Israel Ben-Yoram, Director</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>PLURISTEM LIFE SYSTEMS INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>COMMON STOCK AND WARRANT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>PURCHASE AGREEMENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Common Stock and Warrant Purchase Agreement</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:left;'><font size=2>This Common Stock and Warrant Purchase Agreement (this "</font><b><font size=2>Agreement</font></b><font size=2>"), dated as of October 25, 2004, between PLURISTEM LIFE SYSTEMS INC., a Nevada corporation (the "</font><b><font size=2>Company</font></b><font size=2>"), and the investors listed on </font><u><b><font size=2>Schedule A</font></b></u><font size=2> hereto, each of which is referred to herein as an &#147;</font><b><font size=2>Investor</font></b><font size=2>&#148; and collectively as &#147;</font><b><font size=2>Investors</font></b><font size=2>&#148;.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font SIZE=2>THE PARTIES HEREBY AGREE AS FOLLOWS:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="305" style=' margin-left:.25in;border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.  </font></p> </td>
        <td width="281" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Purchase and Sale of Stock and Warrant.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>1.1  </font><u><font size=2>Sale and Issuance of Common Stock and Warrant</font></u><font size=2>. Subject to the terms and conditions of this Agreement, the Investor agrees to purchase at the Closing (as defined below) pursuant to Section 1.2, and the Company agrees to sell and issue to each Investor at  the Closing pursuant to Section 1.2, (i) a Common Stock (as defined below) purchase warrant in the form  attached hereto as </font><u><b><font size=2>Exhibit A</font></b></u><font size=2> (each a  "</font><b><font size=2>Warrant</font></b><font size=2>" and collectively the &#147;</font><b><font size=2>Warrants</font></b><font size=2>&#148;) for the purchase of a number of shares of Common Stock as specified next to such investor&#146;s name in Schedule A hereto, at a purchase price per share of $0.3, and (ii) the  shares (the "</font><b><font size=2>Shares</font></b><font size=2>") of
common stock, par value $0.00001 per share, of the Company (the  &#147;Common Stock"), (which represents ____% of the pro forma Common Stock outstanding on the date of the Closing, assuming the issuance of the Shares and including all shares of Common Stock that are actually outstanding and  shares issuable upon exercise of outstanding options, warrants and other convertible securities)), at a purchase price per share of $0.1 and for an aggregate purchase price with respect to each Investor as specified next to such investor&#146;s name in Schedule A hereto, payable in cash, wire transfer in immediately available funds  and promissory notes, as specified in Section 1.2 herein below (the "</font><b><font size=2>Purchase Price</font></b><font size=2>").</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Closing</font></u><font size=2>. Subject to the terms and conditions of this Agreement, the purchase and sale of the Common Stock and Warrants shall take place at a closing (the "</font><b><font size=2>Closing</font></b><font size=2>") to be held at the offices of Clark, Wilson, on or before 10:00 A.M. Pacific time, on October 27, 2004, or at such other time and place as the Company and the Investors (who shall be represented for this matter by Mr. Amir Uziel and/or Mr. Yoram Drucker (the &#147;</font><b><font size=2>Investors Representatives</font></b><font size=2>&#148;) mutually agree upon in writing. The Closing may take place in tranches, with the Company accepting subscriptions for Shares from investors who have delivered their funds and this Agreement. Unless the context requires otherwise,
&#147;Closing&#148; shall refer to the closing of the first purchase and sale of Shares and Warrants pursuant to this form of Agreement. At the Closing, the Company shall deliver to the Escrow Agent as named in the Escrow Agreement attached as </font><u><b><font size=2>Exhibit D</font></b></u><font size=2> to this Agreement (the &#147;Escrow Agreement&#148;): (i) a certificate representing the Common Stock that the Investor is purchasing pursuant to the terms hereof delivered to the Investor; (ii) an executed Warrant exercisable by each Investor for a number of shares equal to the Shares purchased by such Investor; (iii) a receipt for the Purchase Price actually received; and (iv) the other documents listed in Section 4 of this Agreement. At the Closing, each Investor shall deliver to the Company: (i) the Purchase Price due by such Investor by wire transfer in immediately available funds to a bank account to be </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>designated by the Company in writing to the Investors; and (ii) the other documents listed in Section 5 of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Subsequent Closings</font></u><font size=2>. The Investors on a pro-rata basis, or any part of them and any additional persons joining the Investors to whom an Investor has assigned his/her right to purchase any portion of the Takedown Shares, where such additional persons (&#147;</font><b><font size=2>Additional Investors</font></b><font size=2>&#148;) have signed Purchase Agreements similar to this Agreement and escrow agreements similar to the Escrow Agreement in a form acceptable to the Company and its legal counsel shall have the right to purchase, at their sole discretion, additional number of shares provided that the aggregate number of shares purchased pursuant to Section 1.2 and 1.3 shall not exceed 15,000,000 (&#147;</font><b><font size=2>Takedown Shares</font></b><font size=2>&#148;), for the same purchase
price per share paid hereunder (as adjusted to reflect stock dividends, stock splits, re-capitalization and the like) and otherwise on the same terms and conditions as set forth herein.  Closings of the sale of such Takedown Shares (each a &#147;</font><b><font size=2>Subsequent Closing</font></b><font size=2>&#148;) shall be held at such location and time as may be notified at least three business days in advance in writing by any of the Investors Representatives to the Company, within 90 days after the date of the first Closing pursuant to Section 1.2 herein above. At a Subsequent Closing the Company shall deliver to the Escrow Agent pursuant to the Escrow Agreements on behalf of each Investor and/or Additional Investor participating in such Subsequent Closing (i) a certificate representing the Common Stock that the Investor is purchasing pursuant to the terms hereof delivered to the Investor; (ii) an executed Warrant exercisable by each Investor for a number of shares equal to the
Shares purchased by such Investor (&#147;</font><u><b><font size=2>Takedown Warrant</font></b></u><font size=2>&#148;); (iii) a receipt for the Purchase Price actually received; and (iv) the other documents listed in Section 4 of this Agreement, against payment of the purchase price therefor by certified check, bank draft, wire transfer or any combination thereof and execution of this Agreement and any other Transaction Agreement as defined herein, in the event not already executed by such Investor. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>The Investors and the Company further agree that: (i) the Company shall amend this Agreement solely to provide for the issuance of the Takedown Shares and Takedown Warrants to the Investors and/or Additional Investors under the terms and conditions of this Agreement, (ii) the Additional Investors shall become parties to this Agreement and other Transaction Agreements. The terms &#147;Shares&#148;, &#147;Warrants&#148;, &#147;Closing&#148; and &#147;Investor&#148;, when used in this Agreement shall respectively be deemed to include such Takedown Shares and Takedown Warrants as are issued, each Subsequent Closing and each Additional Investor.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.  </font></p> </td>
        <td width="334" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Representations and Warranties of the Company.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company hereby represents and warrants to the Investor that, except as set forth on a Schedule of Exceptions (the "</font><b><font size=2>Schedule of Exceptions</font></b><font size=2>") furnished to the Investors on or prior to entering into this Agreement, which exceptions shall qualify the representation and warranty that has the corresponding number as the numbered paragraph in the Schedule of Exceptions, and which representations and warranties so qualified shall be deemed to be representations and warranties as if made hereunder, as of the date hereof and as of the date of Closing:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.1  </font><u><font size=2>Organization and Qualification; Subsidiaries</font></u><font size=2>. (a) Each of the Company and each subsidiary of the Company (each a "</font><b><font size=2>Subsidiary</font></b><font size=2>") is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite corporate power and authority and all necessary governmental approvals to own, lease and operate </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, have a Material Adverse Effect (as defined below). Each of the Company and each Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, have a Material Adverse Effect. "</font><b><font size=2>Material Adverse Effect</font></b><font size=2>" means any event, circumstance, change or effect that, individually or in the
aggregate with all other events, circumstances, changes and effects, is or is reasonably likely to be materially adverse to the business, condition (financial or otherwise), assets, liabilities or results of operations of the Company and the Subsidiaries taken as a whole.   (b)  A true and complete list of all the </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Subsidiaries, together with the jurisdiction of incorporation of each Subsidiary, is set forth in Section 2.1(b) of the Schedule of Exceptions. Each Subsidiary is a wholly-owned subsidiary of the Company. Except as disclosed in Section 2.1(b) of the Schedule of Exceptions, the Company does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.2  </font><u><font size=2>Certificate of Incorporation and By-laws</font></u><font size=2>. The Company has heretofore made available to the Investors a complete and correct copy of the Articles of Incorporation and the By-laws, each as amended to date, of the Company. Such Articles of Incorporation and By-laws are in full force and effect. The Company is not in violation of any of the provisions of its Certificate of Incorporation or By-laws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.3  </font><u><font size=2>Capitalization</font></u><font size=2>.    (a) The authorized capital stock of the Company consists of (i) one billion four hundred million shares of Common Stock, par value $0.00001 per share. As of October&nbsp;21, 2004, (i) 26,858,483 shares of Common Stock are issued and outstanding, all of which are validly issued, fully paid and non-assessable, (ii) no shares of Common Stock are held in the treasury of the Company, (iii) no shares of Common Stock are held by the Subsidiaries, and (iv) 3,883,820 shares of Common Stock are reserved for future issuance pursuant to outstanding employee stock options or stock incentive rights granted pursuant to the Company's 2003 Employee Option Plan and our 2004 Option Plan, (collectively, the "</font><b><font size=2>Plans</font></b><font size=2>"). As of the date of this Agreement, no shares of Company Preferred Stock are
issued and outstanding. Except as set forth in this Section 2.3, other than the above listed options and 4,394,672 outstanding warrants each to purchase one share of Common Stock there are no options, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or any Subsidiary or obligating the Company or any Subsidiary to issue or sell any shares of capital stock of, or other equity interests in, the Company or any Subsidiary. All shares of Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and non-assessable. There are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares of Common Stock or any capital stock of any Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other person, except pursuant to the Plans and outstanding Warrant Certificates. All outstanding shares of Common Stock, all </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>outstanding stock options to purchase Common Stock, and all outstanding shares of capital stock of each subsidiary of the Company have been issued and granted in compliance with (i) all applicable U.S. securities laws, (ii) all applicable non-U.S. securities laws, (iii) all other applicable Laws (as defined below) and (iv) all requirements set forth in applicable contracts. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (b) Each outstanding share of capital stock of each Subsidiary is duly authorized, validly issued, fully paid and non-assessable, and each such share is owned by the Company or another Subsidiary free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company's or any Subsidiary's voting rights, charges and other encumbrances of any nature whatsoever. Except as set forth above and in the documents of the Company filed with the SEC, there are no registration rights or preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind which obligate Company or any of its Subsidiaries to register, issue or sell any shares of capital stock or other securities of the Company or
any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire from the Company or any of its Subsidiaries, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are issued or outstanding.  The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.4  </font><u><font size=2>Authority</font></u><font size=2>. The Company has all necessary corporate power and authority to execute and deliver this Agreement, the Investors&#146; Rights Agreement in the form attached hereto as </font><u><b><font size=2>Exhibit B</font></b></u><font size=2> (the "</font><b><font size=2>Investors&#146; Rights Agreement</font></b><font size=2>"), the Warrant, (the Investors&#146; Rights Agreement and the Warrant are collectively referred to as the "</font><b><font size=2>Transaction Agreements</font></b><font size=2>"), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby or thereby. The execution and delivery of this Agreement and the Transaction Agreements by the Company and the consummation by the Company of the transactions contemplated hereby or thereby have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement and the Transaction Agreements or to consummate the transactions contemplated hereby or thereby. Each of this Agreement and the Transaction Agreements has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors' rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity). The Company Board of Directors (the "</font><b><font size=2>Board</font></b><font size=2>") has
approved this Agreement, the Transaction Agreements and the transactions contemplated hereby or thereby and such approvals are sufficient so that the restrictions on business combinations set forth in the Nevada Corporations Code and no other &#147;fair price,&#148; &#147;moratorium,&#148; &#147;control share acquisition&#148; or other similar anti-takeover statute or regulation, (and any similar provisions, each a &#147;</font><b><font size=2>Takeover Statute</font></b><font size=2>&#148;), and no anti-takeover provision in the amended certificate of incorporation or by-laws of the Company shall not apply to any of the transactions contemplated hereby or thereby, including, but not limited to, any exercise of the Warrant or actions permitted </font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>pursuant to the Investors&#146; Rights Agreement. The Company warrants and agrees to carry out its obligations as set out in the Investor Rights Agreement. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.5 </font><u><font size=2>No Conflict; Required Filings and Consents</font></u><font size=2>. (a) The execution and delivery of this Agreement and the Transaction Agreements by the Company do not, and the performance of this Agreement and the Transaction Agreements by the Company will not, (i) conflict with or violate the Certificate of Incorporation or By-laws of the Company, (ii) conflict with or violate any United States or other statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order ("</font><b><font size=2>Law</font></b><font size=2>") applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of the Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, have a Material Adverse Effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.67in;text-align:left;'><font size=2> (b) The execution and delivery of this Agreement and the Transaction Agreements by the Company do not, and the performance of this Agreement and the Transaction Agreements by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any foreign, United States federal, state, county or local or non-United States government, governmental, regulatory or administrative authority, agency, instrumentality or commission (including any stock exchange or inter-dealer quotation system)  or any court, tribunal, or judicial or arbitral body (a "</font><b><font size=2>Governmental Authority</font></b><font size=2>"), other than any filings necessary to comply with federal and state securities or "blue sky" laws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.6 </font><u><font size=2>Permits; Compliance</font></u><font size=2>. Each of the Company and the Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for each of the Company or the Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted (the "</font><b><font size=2>Company Permits</font></b><font size=2>"), except where the failure to have, or the suspension or cancellation of, any of the Company Permits would not, individually or in the aggregate, have a Material Adverse Effect. No suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, threatened, except where the failure to have, or the suspension or cancellation of, any of the
Company Permits would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary is in conflict with, or in default, breach or violation of, (a) any Law applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected, or (b) any note, bond, mortgage, indenture, contract, agreement, lease, license, Company Permit, franchise or other instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any property or asset of the Company or any Subsidiary is bound, except for any such conflicts, defaults, breaches or violations that would not, individually or in the aggregate, have a Material Adverse Effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.7 </font><u><font size=2>SEC Filings; Financial Statements</font></u><font size=2>. (a) The Company has filed all forms, reports and documents required to be filed by it with the Securities and Exchange Commission (the "</font><b><font SIZE=2>SEC</font></b><font size=2>") since September, 2001, and has heretofore made available to the Investors, in the form filed with the SEC, (i) its Annual Reports on Form 10-K for the fiscal years ended June 30, 2004, 2003, and 2002, respectively, and (ii) all other forms, reports and other registration statements filed by the Company with the SEC since January 1, 2003 (the forms, reports and other documents referred to in clauses (i), (ii), (iii) and (iv) above being, collectively, the "</font><b><font size=2>Company SEC Reports</font></b><font size=2>"). The Company SEC Reports (i) were prepared in accordance with either the requirements of the
Securities Act of 1933, as amended (the "</font><b><font size=2>Securities Act</font></b><font size=2>"), or the Securities Exchange Act of 1934, as amended (the "</font><b><font size=2>Exchange Act</font></b><font size=2>"), as the case may be, and the rules and regulations promulgated thereunder existing at the time the Company SEC Reports were filed, and (ii) did not, at the time they were filed, or, if amended, as of the date of such amendment, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary is required to file any form, report or other document with the SEC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.67in;text-align:left;'><font size=2> (b) Each of the consolidated financial statements (including, in each case, any notes thereto) contained in the Company SEC Reports was prepared in accordance with United States generally accepted accounting principles ("</font><b><font SIZE=2>GAAP</font></b><font size=2>") applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of the Company and its consolidated Subsidiaries as at the respective dates thereof and for the respective periods indicated therein , except as otherwise noted therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments which would not have had, and would not have,
individually or in the aggregate, a Material Adverse Effect) and for pro forma financial information disclosed therein.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.67in;text-align:left;'><font size=2> (c) Except as and to the extent set forth on the consolidated balance sheet of the Company and the consolidated Subsidiaries as at June 30, 2004, including the notes thereto, neither the Company nor any Subsidiary has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except for liabilities and obligations, incurred in the ordinary course of business consistent with past practice since that date.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.67in;text-align:left;'><font size=2> (d) The Company has heretofore furnished or made available to the Investors complete and correct copies of all amendments and modifications that have not been filed by the Company with the SEC to all agreements, documents and other instruments that previously had been filed by the Company with the SEC and are currently in effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.8  </font><u><font size=2>Absence of Certain Changes or Events</font></u><font size=2>. Since June 30, 2004, except as set  forth in Section 2.8 of the Schedule of Exceptions, or as expressly contemplated by this Agreement, or specifically disclosed in any Company SEC Report filed since such date and prior to the date of this Agreement, (a) the Company and the Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice; (b) there has not been any Material Adverse Effect (c) any declaration, setting aside or payment of any dividend or other distribution in cash, stock or property in respect of Company&#146;s capital stock except as expressly permitted by this </font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Agreement; (d) any split in Company&#146;s capital stock, or any combination, subdivision or reclassification of any of Company&#146;s capital stock or issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company&#146;s capital stock, except as expressly contemplated by this Agreement; or (e) any change by it in accounting principles, practices or methods except as required by changes in GAAP .</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.9  </font><u><font size=2>Absence of Litigation</font></u><font size=2>. Except as specifically disclosed in the Company SEC Reports filed prior to the date of this Agreement, there is no litigation, suit, claim, action, proceeding or investigation (an "</font><b><font size=2>Action</font></b><font size=2>") pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary, or any property or asset of the Company or any Subsidiary, before any Governmental Authority that, individually or in the aggregate, has had or would have a Material Adverse Effect. Neither the Company nor any Subsidiary nor any material property or asset of the Company or any Subsidiary is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the knowledge of the Company, continuing investigation by, any Governmental
Authority, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority that would, individually or in the aggregate, have a Material Adverse Effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.10 </font><u><font size=2>Valid Issuance of Common Stock</font></u><font size=2>. The Common Stock that is being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly authorized, validly issued, fully paid and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements and under applicable state and federal securities laws. The shares of Common Stock issuable upon exercise of the Warrant have been duly and validly reserved for issuance and, upon issuance, will be duly authorized, validly issued, fully paid and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Transaction Agreements and under applicable state and federal securities laws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.11 </font><u><font size=2>Intellectual Property Rights</font></u><font size=2>. Except as disclosed in the Company SEC Reports, each of the Company and the Subsidiaries has sufficient title, right of  use and/or ownership, free and clear of all liens, claims or restrictions, of  all patents, patent rights, trademark rights, service mark rights, trade name rights, copyright rights, trade secrets, customer lists, information, proprietary rights, know-how, designs, computer programs, technical data, inventions and processes and other intellectual property or proprietary rights (collectively, the &#147;</font><b><font size=2>Intellectual Property</font></b><font size=2>&#148;) necessary for its business as now conducted and as proposed to be conducted (including the development, operation and sale of all products sold by it) without any conflict with or infringement of, or otherwise acting
adversely to the rights or claimed rights of others (including without limitation, employees or former employees). Schedule 2.11 of the Schedule of Exceptions contains a complete list of patents and pending patent applications, trademarks, trademark applications, service marks, service mark applications, copyrights, copyright applications, licenses, trade names and similar rights of the Company and the Subsidiaries.  No procedures have been commenced in any jurisdiction, nor to the Company&#146;s or any Subsidiary&#146;s knowledge, have been threatened, which would result in the cancellation of any issued patent, trademark or service-mark or materially and adversely affect the Intellectual Property.  Except as listed in Schedule 2.11 of  the Schedule of Exception there are no outstanding options, licenses, claims, encumbrances, shared ownership or interest of any kind or agreements of any kind relating to the Intellectual Property, nor is the </font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Company or Subsidiary bound by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property of any other person or entity.  Neither the Company nor Subsidiary have reason to believe, or have received any communications alleging that the Company or the Subsidiary have violated or, by conducting its business as proposed, would violate any of the Intellectual Property rights of any other person or entity. The Company and the Subsidiary and any of their respective directors or officers are not aware of any infringement of or conflict with asserted rights of others, with respect to any of Company&#145;s or Subsidiary&#146;s Intellectual Property and proprietary rights, or of any facts, or assertion of any facts, which could reasonably be expected to render any of Company&#146;s or Subsidiary&#146;s intellectual property or proprietary rights invalid or unenforceable. There
is no Intellectual Property owned, authored, claimed or licensed  by any third party which is used or is expected to be used by the Company or any Subsidiary to conduct its business that requires the payment of royalties, compensation, fees or otherwise to a third party. The Company and the Subsidiaries are not aware that any of the Company or its Subsidiaries&#146; employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Company or the applicable Subsidiary or that would conflict with the Company&#146;s or the Subsidiary&#146;s business as proposed to be conducted.  Neither the execution nor delivery of this Agreement or the Transaction Agreements, nor the carrying on of the Company&#146;s business by the employees of the Company, nor the
carrying on any Subsidiary&#146;s business by the employees of such Subsidiary, nor the conduct of the Company&#146;s or the Subsidiary&#146;s business as proposed, will, to the Company&#146;s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated.  The Company and the Subsidiaries do not believe it is or will be necessary to utilize any inventions of any of its or any Subsidiary&#146;s employees (or people it or a Subsidiary currently intends to hire) made prior to or outside the scope of their employment by the Company or the Subsidiary. The Company has taken reasonable security measures, including measures against unauthorized disclosure, to protect the secrecy, confidentiality and value of its and any Subsidiary&#146;s Intellectual Property and each of the Company&#146;s officers and employees and Subsidiary&#146;s employees that
has access to the Company&#146;s or a Subsidiary&#146;s material Intellectual Property has entered into a non-competition agreement with the Company or the Subsidiary.  At no time in the course of the conception of or reduction into writing of any of the Company&#146;s or a Subsidiary&#146;s Intellectual Property, was any developer, inventor or other contributor to such intellectual property operating under any grants from any governmental entity or agency or private source, or subject to any employment agreement, or invention assignment or nondisclosure agreement, or other obligation with any third party that could adversely affect or limit any intellectual property owned by or licensed to the Company or a Subsidiary, or which the Company or a Subsidiary otherwise has the right to use.</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.12 </font><u><font size=2>Brokerage</font></u><font size=2>. Except as provided in Section 6.12 herein, there are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by this Agreement and the Transaction Agreements for which the Investor will have any liability or responsibility based on any arrangement or agreement binding upon the Company or Subsidiary. </font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>9</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.13 </font><u><font size=2>Disclosure</font></u><font size=2>. (a) The Company is not aware of any facts pertaining to the Company or its Subsidiaries which could have a Material Adverse Effect and which have not been disclosed in this Agreement, the Schedule of Exceptions or the Company SEC Reports filed prior to the date hereof or otherwise disclosed to the Investor by the Company in writing, except that the Company has depleted most of its cash and will be unable to continue operations without raising additional cash.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (b) No representation or warranty of the Company in this Agreement or the Transaction Agreements, nor any statement or certificate furnished or to be furnished to the Investors pursuant to the Transaction Agreements, when taken in conjunction with all the information provided or made available by the Company to the Investors in connection with the transactions contemplated by this Agreement, taken as a whole, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.14 </font><u><font size=2>Registration Rights</font></u><font size=2>. Except as provided in the Schedule of Exceptions and the Investors&#146; Rights Agreement, the Company has not granted or agreed to grant any registration rights, including piggy-back rights, to any person.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.15 </font><u><font size=2>Agreements, Contracts and Commitments</font></u><font size=2>. Except as identified in the Schedule of Exceptions, during the past 12 months, neither the Company nor any of its Subsidiaries has breached, violated or defaulted under, or received notice that it has breached, violated or defaulted under, nor is a breach, violation, or default continuing under, any Material Contract (as defined below) to which the Company or any Subsidiary is a party or by which its is bound. "</font><b><font size=2>Material Contract</font></b><font size=2>" means:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (a) any agreement, contract or commitment containing any covenant limiting the freedom of the Company or any of its Subsidiaries to engage in any material line of business or compete with any person in any material line of business; or</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (b) any "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Company and its Subsidiaries.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.54in;text-align:left;'><font size=2>2.16 </font><u><font size=2>Taxes</font></u><font size=2>.  For purposes of this Agreement, the following terms have the following definitions: &#147;</font><b><font size=2>Returns</font></b><font size=2>&#148; means returns, declarations, statements, reports, forms or other documents or information required to be filed with or supplied to any governmental entity having jurisdiction over the assessment, determination, collection or other imposition of any Tax. &#147;</font><b><font size=2>Tax</font></b><font size=2>&#148; or &#147;</font><b><font size=2>Taxes</font></b><font size=2>&#148; means all taxes (whether federal, state, local or foreign) based upon or measured by income and any other tax whatsoever, including gross receipts, profits, windfall profits, sales, use, occupation, value added, </font><i><font size=2>ad valorem, </font></i><font size=2>transfer, franchise, withholding,
payroll, employment, excise, stamp, premium, capital stock, production, business and occupation, disability, severance, or real or personal property taxes, fees, or assessments of any kind whatsoever imposed by any Governmental Authority, together with any interest or penalties imposed with respect thereto. The &#147;</font><b><font size=2>Code</font></b><font size=2>&#148; shall mean the Internal Revenue Code of 1986, as amended.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>Except to the extent that any breach, failure or inaccuracy is not reasonably likely to have a Material Adverse Effect on the Company:  (i) all Returns required to be filed by or with respect to the Company or one of its Subsidiaries with respect to any taxable period ending on or prior to the </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>10</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>Closing have been duly filed which showed that the Company owed Taxes and all such Returns are complete and accurate and (ii) all Taxes shown to be due on the Returns referred to in clause (i) have been paid in full.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>2.17 </font><u><font size=2>Employee Matters</font></u><font size=2>. Section 2.17 of the Schedule of Exceptions sets forth an accurate list of any material compensation or benefit plan or agreement (including any employee benefit plan, program, policy, agreement or contract providing benefits to any current or former employee, officer or director of it or any of its Subsidiaries or any beneficiary or dependent thereof that is sponsored or maintained by it or any of its Subsidiaries or to which it or any of its Subsidiaries contributes or is obligated to contribute (other than government-based plans), including any &#147;employee welfare benefit plan&#148; within the meaning of Section 3(1) of ERISA, any &#147;employee pension benefit plan&#148; within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA), all employment or severance agreements, and any bonus,
incentive, deferred compensation, vacation, stock purchase, stock option, severance, change of control or fringe benefit plans, programs or policies (any of the foregoing a &#147;</font><b><font size=2>Benefit Plan</font></b><font size=2>&#148;) of the Company and its Subsidiaries.  There do not now exist, and to the Company&#146;s knowledge, there are no existing circumstances that could reasonably be expected to result in, any liabilities (a) under Title IV of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder (&#147;</font><b><font SIZE=2>ERISA</font></b><font size=2>&#148;),  (b) under Section 302 of ERISA, (c) under Sections 412 and 4971 of the Code, (d) for violation of the continuation coverage requirements of Section 601 </font><i><font size=2>et seq</font></i><font size=2>. of ERISA and Section 4980B of the Code or the group health requirements of Sections 9801 </font><i><font size=2>et seq</font></i><font
size=2>. of the Code and Sections 701 </font><i><font size=2>et seq</font></i><font size=2>. of ERISA, and (e) under corresponding or similar provisions of foreign laws or regulations (any such liability a &#147;</font><b><font size=2>Controlled Group Liability</font></b><font size=2>&#148;) to the Company or any of its Subsidiaries except for those that, individually or in the aggregate, would not be reasonably likely to have a Material Adverse Effect on the Company.  No Benefit Plan maintained or contributed to by the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is required to contribute (any such plan a &#147;</font><b><font size=2>Company&#146;s Benefit Plan</font></b><font size=2>&#148;) is a &#147;multiemployer plan&#148; within the meaning of Section 4001(a)(3) of ERISA.  </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>Except as is not reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on the Company, (A) each of the Company&#146;s Benefit Plans has been operated and administered in all material respects in accordance with applicable Law and administrative rules and regulations of any Governmental Authority, including, but not limited to, ERISA and the Code, and (B) there are no pending or threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, against the Company&#146;s Benefit Plans, any fiduciaries thereof with respect to their duties to the Company&#146;s Benefit Plans or the assets of any of the trusts under any of the Company&#146;s Benefit Plans that could reasonably be expected to result in any material liability of the Company or any of its Subsidiaries to the Pension Benefit Guaranty Corporation,
the U.S. Department of the Treasury, the U.S. Department of Labor or any similar non-U.S. Governmental Entities, any Company&#146;s Benefit Plan, any participant in a the Company&#146;s Benefit Plan, or any other party.  </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>As of the date hereof, neither the Company nor any of its Subsidiaries is a party to any material collective bargaining or other labor union contract applicable to individuals employed by the Company&#146; or any of its Subsidiaries, and no such collective bargaining agreement or other labor union contract is being negotiated by the Company or any of its Subsidiaries.  Except as is not reasonably likely to have a Material Adverse Effect on the Company, (A) there is no labor dispute, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>11</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>strike, slowdown or work stoppage against the Company or any of its Subsidiaries pending or, to the Company&#146;s knowledge, threatened against the Company or any of its Subsidiaries and (B)&nbsp;no unfair labor practice or labor charge or complaint has occurred with respect to the Company or any of its Subsidiaries.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="348" style=' margin-left:.25in;border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.  </font></p> </td>
        <td width="324" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Representations and Warranties of the Investor.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Each Investor hereby represents and warrants solely with respect to himself, herself or itself, as applicable that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.1  </font><u><font size=2>Organization and Qualification</font></u><font size=2>. If the Investor is a corporation, it is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.2  </font><u><font size=2>Authority Relative to This Agreement</font></u><font size=2>. The Investor has all necessary corporate power and authority to execute and deliver this Agreement and the Transaction Agreements, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby or thereby. The execution and delivery of this Agreement and the Transaction Agreements by the Investor and the consummation by the Investor of the transactions contemplated hereby or thereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Investor are necessary to authorize this Agreement and the Transaction Agreements or to consummate the transactions contemplated hereby or thereby. Each of this Agreement and the Transaction Agreements has been duly and validly executed and delivered by
the Investor and, assuming the due authorization, execution and delivery by the Investor, constitutes a Agreements, upon execution and delivery by the Company will constitute) legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors' rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.3  </font><u><font size=2>No Conflict; Required Filings and Consents</font></u><font size=2>. (a) The execution and delivery of this Agreement and the Transaction Agreements by the Investor do not, and the performance of this Agreement and the Transaction Agreements by the Investor will not, (i) conflict with or violate the organizational documents of the Investor or (ii) conflict with or violate any Law applicable to the Investor.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (b) The execution and delivery of this Agreement and the Transaction Agreements by the Company do not, and the performance of this Agreement and the Transaction Agreements by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.4  </font><u><font size=2>Brokerage</font></u><font size=2>. Except as provided in Section 6.12 herein, there are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by this Agreement and the Transaction Agreements for which the Investor will have </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>12</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>any liability or responsibility based on any arrangement or agreement binding upon the Investor or any of its subsidiaries.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.5  </font><u><font size=2>Purchase Entirely for Own Account</font></u><font size=2>. This Agreement is made with the Investor in reliance upon the Investor's representation to the Company, which by the Investor's execution of this Agreement the Investor hereby confirms, that the Investor is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act, that the Common Stock and Warrant to be received by the Investor (collectively, the "</font><b><font size=2>Securities</font></b><font size=2>") will be acquired for investment for the Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same other than in a transaction registered under the Securities Act or exempt from,
or not subject to, such registration. By executing this Agreement, the Investor further represents that the Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.6  </font><u><font size=2>Disclosure of Information</font></u><font size=2>. The Investor has been afforded access to such information as it has requested regarding the Company and its Subsidiaries and their respective financial condition, operating results, properties, liabilities, operations and management. The Investor has reviewed all documents filed by the Company with the SEC and which are filed on the EDGAR website. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.7  </font><u><font size=2>Restricted Securities</font></u><font size=2>. The Investor understands that the Securities it is purchasing are characterized as "restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144 under the Securities Act, as presently in effect ("</font><b><font size=2>Rule 144</font></b><font size=2>"), and understands the resale limitations imposed thereby and by the Securities Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.8  </font><u><font size=2>Legends</font></u><font size=2>. It is understood that the certificates evidencing the Securities may bear one or all of the following legend(s):</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.47in;text-align:left;'><font size=2>"These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such Act."</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.47in;text-align:left;'><font size=2>"The shares represented hereby are subject to certain restrictions under the terms of the Investor Rights Agreement, dated October 25, 2004, as amended from time to time, between the issuer and the holder hereof and may not be offered, sold, transferred or otherwise disposed of except in accordance with the terms of that agreement."</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.9</font></p> </td>
        <td width="75" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Omitted</font></u><font size=2>.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.12in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>13</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.12in; text-indent:0.33in;text-align:left;'><font size=2>3.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is not a "U.S. Person" as defined in Regulation S promulgated under the Securities Act (&#147;</font><b><font size=2>Regulation S</font></b><font size=2>&#148;):</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.12in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2.08in;text-align:justify;'><font size=2> (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor was not organized under the laws of any United States jurisdiction, was not formed for the purpose of investing in securities not registered under the Securities Act and is not acquiring the Shares for the account or benefit of any US Person;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time the buy order for this transaction was originated, the Investor was outside the United States;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All subsequent offers and sales of the Shares will be made (A) outside the United States in compliance with the provisions of Regulation S (including Rule 901 through Rule 905 and the Preliminary Notes thereto) (B) pursuant to registration of the Shares under the Securities Act, or (C) pursuant to an exemption from such registration.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor agrees not to engage in hedging transactions with regards to such Shares unless with compliance to the Securities Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The certificates representing the Shares shall be stamped or otherwise imprinted with the Legend set forth in Section 3.8 to this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall not register any transfer of the Shares not made in accordance with Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>3.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is a U.S. Person, the Investor is an Accredited Investor as defined by Regulation D Rule 501 and has signed and delivered to the Company an Accredited Investor Questionnaire in the form attached hereto as </font><u><b><font size=2>Exhibit C</font></b></u><font size=2>. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>3.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is not a U.S. Person nor a resident of Israel, the Investor warrants and represents that the issuance of the Common Stock and Warrants to the Investor is exempt from the prospectus and registration requirements of the laws of the jurisdiction of residence of the Investor and that the Company is not required to make any filings or take other steps in such jurisdiction to validly and lawfully issue the securities contemplated by this Agreement to the Investor. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="432" style=' margin-left:.25in;border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.  </font></p> </td>
        <td width="408" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Conditions of the Investors Obligation to Affect the Closing.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The obligations of the Investors to consummate the transactions contemplated hereby are subject to the fulfillment or waiver (where permissible) on or before the Closing of each of the following conditions:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.1  </font><u><font size=2>Representations and Warranties</font></u><font size=2>. The representations and warranties of the Company contained in Section 2 shall be true and correct as of the date hereof and as of the date of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>14</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.2  </font><u><font size=2>Performance</font></u><font size=2>. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.3  </font><u><font size=2>Compliance Certificate</font></u><font size=2>. The President of the Company shall have delivered to the Investor at the Closing a certificate stating that the conditions specified in Sections 4.1 and 4.2 have been fulfilled. In addition, the Compliance Certificate shall state the number of shares of the outstanding Common Stock of the Company immediately prior to the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.4  </font><u><font size=2>Incumbency Certificate</font></u><font size=2>. The certificate of the Secretary of the Company certifying the names and signatures of the officers of the Company authorized to sign this Agreement and the other Transaction Agreements and all other documents to be delivered hereunder and thereunder.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.5  </font><u><font size=2>Qualifications</font></u><font size=2>. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall have been duly obtained and effective as of the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.6  </font><u><font size=2>Proceedings and Documents</font></u><font size=2>. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents incident to the Closing shall be reasonably satisfactory in form and substance to the Investors counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.7  </font><u><font size=2>Board of Directors</font></u><font size=2>. Mr. Meir Segev and Mr. Robert Pico, two out of the five members of the Company&#146;s Board shall have executed resignation letters, effective immediately upon Closing of a minimum of $500,000 in value of Shares and Warrants pursuant to Section 1.2, and the remaining members of the Company&#146;s Board shall have at that time taken all necessary action to appoint the nominees of the Investors (who shall initially be Yoram Drucker and Israel Ben Yoram) to fill the vacancies created by the resignations as per Section 78.335 of Nevada Revised Statutes effective immediately after the Closing pursuant to Section 1.2.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.8  </font><u><font size=2>Investors&#146; Rights Agreement</font></u><font size=2>. The Company shall have executed and delivered to the Investor a counterpart to the Investors&#146; Rights Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.9  </font><u><font size=2>Warrant</font></u><font size=2>. The Company shall have executed and delivered to each Investor the applicable Warrant.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.10 </font><u><font size=2>Takeover Statute</font></u><font size=2>. The Company shall take all necessary steps such  that no Takeover Statute, and no anti-takeover provision in the amended certificate of incorporation or by-laws of the Company is, or will be, applicable to the transactions contemplated by this Agreement and the Transactions Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.11 </font><u><font size=2>No Material Adverse Effect</font></u><font size=2>. No event or events shall have occurred, or be reasonably likely to occur, which individually or in the aggregate, have or could have, a Material Adverse Effect.
</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>15</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="447" style=' margin-left:.25in;border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.  </font></p> </td>
        <td width="423" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Conditions of the Company&#146;s Obligation to Affect the Closing.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The obligations of the Company to consummate the transactions contemplated hereby are subject to the fulfillment or waiver (where permissible) on or before the Closing of each of the following conditions, with respect to each Investor severally and not jointly:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>5.1  </font><u><font size=2>Representations and Warranties</font></u><font size=2>. The representations and warranties of the Investors contained in Section 3 shall be true and correct as of the date hereof and as of the date of Closing with the same effect as though such representations and warranties had been made on and as of the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>5.2 </font><u><font size=2>Performance</font></u><font size=2>. The Investors shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>5.3 </font><u><font size=2>Proceedings and Documents</font></u><font size=2>. All corporate and other proceedings in connection with the transactions contemplated at the hereby and all documents incident to the Closing shall be reasonably satisfactory in form and substance to the Company's counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>5.4 </font><u><font size=2>Investors&#146; Rights Agreement</font></u><font size=2>. The Investors shall have executed and delivered a counterpart to the Investors&#146; Rights Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="139" style=' margin-left:.25in;border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6.  </font></p> </td>
        <td width="115" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Miscellaneous.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.1 </font><u><font size=2>Survival of Representations, Warranties and Other Agreements</font></u><font size=2>. The representations, warranties and other agreements of each of the Company and the Investors, respectively, included or provided for in the Transaction Agreements, shall survive the execution and delivery of this Agreement, the other Transaction Agreements and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Company or the Investors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.2 </font><u><font size=2>Successors and Assigns</font></u><font size=2>. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of, and be binding upon the respective successors and assigns of the parties (including transferees of any Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.3 </font><u><font size=2>Governing Law; Venue</font></u><font size=2>. This Agreement shall be governed by and construed under the laws of the State of Israel as applied to agreements executed in and to be performed entirely within Israel. In any event of dispute not amicably resolved within 10 days of the written notice of any party, the parties hereby irrevocably submit to the jurisdiction of the courts of Israel solely in respect of the interpretation and enforcement of the provisions of this Agreement and in respect of the transactions contemplated hereby and hereby waive, and agree not to assert, as a defense in any </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>16</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by such courts, and the parties irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a court.  The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6.6 (Notices), or in such other manner as may be permitted by applicable law, shall be valid and sufficient service thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.4 </font><u><font size=2>Counterparts</font></u><font size=2>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts executed and delivered via any form of electronic transmission shall be deemed originals.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.5 </font><u><font size=2>Titles and Subtitles</font></u><font size=2>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.42in;text-align:left;'><font size=2>6.6  </font><u><font size=2>Notices</font></u><font size=2>. Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of any Investor, to the address of such Investor as set forth on the signature page hereto or such other address of such Investor as shall be designated in writing from time to time by such Investor.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of such facsimile.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.7  </font><u><font size=2>Expenses</font></u><font size=2>. Irrespective of whether any Closing is effected, the Company shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.  If the Closing pursuant to Section 1.2 is effected, the Company shall, on the earlier of (a) 60 days after the first Closing and (b) at the Closing pursuant to Section 1.2 which results in the sale of an aggregate of at least $500,000 in value of Shares and Warrants,  reimburse the reasonable fees of special counsel for Investors, plus VAT if applicable, and shall, upon receipt of a bill therefore, reimburse the reasonable out of pocket expenses of such counsel to a maximum of $20,000.  If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement or the Transaction Agreements, the prevailing party
shall be entitled to reasonable attorney&#146;s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.8  </font><u><font size=2>Amendments and Waivers</font></u><font size=2>. Any term of this Agreement may be amended only in writing signed by, or on behalf of, the Company and the holders of a majority of the Common Stock issuable or issued upon conversion of the Shares. At any time prior to the Closing, any party hereto may (a) extend the time for the performance of any obligation or other act of any other party hereto, (b) waive any inaccuracy in the representations and warranties of any other party contained herein or in any document delivered pursuant hereto and (c) waive compliance with any agreement of any </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>17</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>other party or any condition to its own obligations contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any party to assert any of its rights shall not constitute a waiver of any of such rights.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.9  </font><u><font size=2>Severability</font></u><font size=2>. If any term or provision of this Agreement is held to be unenforceable under applicable Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.10 </font><u><font size=2>Publicity</font></u><font size=2>. Except as may be required by the Company pursuant to its obligations as a reporting issuer, no party hereto shall issue any press release or otherwise make any statements to any third party with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other party, which consent shall not be unreasonably withheld, and the parties shall cooperate as to the timing and contents of any such press release or public announcement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.11 </font><u><font size=2>Entire Agreement</font></u><font size=2>. This Agreement and the other Transaction Agreements constitute the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>6.12  </font><u><font size=2>Finders&#146; Fees</font></u><font size=2>. The parties hereto acknowledge that various agents, brokers, investment bankers, persons or firms acting on behalf of or under the authority of all or part of the Investors or Company or its affiliates or subsidiaries are, or will be, or may become entitled to broker&#146;s or finder&#146;s fee or any other commission directly or indirectly in connection with the transactions contemplated herein.  The Company further agrees to pay or otherwise cover such fees up to an amount equal to 5% of the amount of the investment such fee is paid in connected with, plus issuance of Warrants for a number of shares equal to 5% of the number of shares subject to the Warrant issued to the Investor such fee is paid in connection with (and in the aggregate up to 5% of the total investment plus 5% of the Warrants shares). </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>18</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>SIGNATURE PAGE </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PURCHASE AGREEMENT</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font size=2>Dated October 25, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="493" style=' margin-left:127.5pt;border-collapse:collapse'>
    <tr>
        <td width="493" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>IF the PURCHASER is an INDIVIDUAL, please complete the following:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.62in;text-align:right;'><font size=2>IN WITNESS WHEREOF, the undersigned has executed this Agreement this _____day of October, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Amount of Subscription:</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font>                                                                                        <u><font size=2> </font></u></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>___________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Print Name</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Number of Shares to be Purchased:</font></p>
<p style='margin-left:0pt;text-indent:228.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>___________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Signature of Investor</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>___________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Address and Fax Number</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>including State of residence</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>___________________________________</font><br> <font size=2>E-mail Address</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>ACCEPTED AND AGREED:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="43" style=' margin-left:263.25pt;border-collapse:collapse'>
    <tr>
        <td width="43" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Dated:</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>19</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>SIGNATURE PAGE</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PURCHASE AGREEMENT</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font size=2>Dated October 25, 2004 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.92in;text-align:right;'><font size=2>IF the PURCHASER is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY, TRUST or OTHER ENTITY, please complete the following:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.01in;text-align:right;'><font size=2>IN WITNESS WHEREOF, the undersigned has executed this Agreement this ______ day of October, 2004.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Number of Shares to be Purchased:</font></p>
<p style='margin-left:0pt;text-indent:228.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>___________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Print Full Legal Name of Partnership,</font><br> <font size=2>Company, Limited Liability Company, Trust or Other Entity</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>By: __________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Authorized Signatory)</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Name: ________________________________</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Title: _________________________________</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Address  including State of residence and Fax Number: _____________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>___________________________________</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Taxpayer Identification Number: __________</font><u></u></p> </td> </tr>
    <tr >
        <td  width="163">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Date and State of Incorporation or Organization:</font></p> </td>
        <td  width="146">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="163">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Date on which Taxable Year Ends:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="163" ></td>

        <td width="156" ></td>

        <td width="88" ></td>

        <td width="86" ></td>

        <td width="146" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.31in;text-align:right;'><font size=2>E-mail Address: ________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>ACCEPTED AND AGREED:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="43" style=' margin-left:261.15pt;border-collapse:collapse'>
    <tr>
        <td width="43" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Name:_______________________________</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="55" style=' margin-left:261.15pt;border-collapse:collapse'>
    <tr>
        <td width="55" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><font size=2>Dated: </font><font size=1>&nbsp;</font><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><font SIZE=2>SCHEDULE OF EXCEPTIONS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.1(b)  Pluristem, Inc., an Israel company</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="87" style=' margin-left:72.15pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.8</font></p> </td>
        <td width="39" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Nil</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Trademark on the word PluriX&#148; obtained June 22, 2003; and exclusive rights to the technology covered by International Application published under the Patent Cooperation Treaty publication number WO 00/46349 entitled &#147;Method and Apparatus for Maintenance and Expansion of Hematopoietic stem cells and/or Progenitor Cells&#148;. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.14 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registration Rights for 3,000,000 shares and 3,300,000 warrants pursuant to a private placement issued in January, 2004, already registered on form SB-2.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="91" style=' margin-left:72.15pt;border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.15</font></p> </td>
        <td width="43" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Nil.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.17</font></p> </td>
        <td width="43" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Nil.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><font size=2>Exhibit C</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><u><b><font SIZE=2>ACCREDITED INVESTOR QUESTIONNAIRE</font></b></u></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><i><font SIZE=2>ONLY U.S. SUBSCRIBERS NEED TO SIGN THIS</font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>All capitalised terms herein, unless otherwise defined, have the meanings ascribed thereto in the Subscription Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>This Questionnaire is for use by each Subscriber who is a US person (as that term is defined Regulation S of the United States Securities Act of 1933 (the &#147;1933 Act&#148;)) and has indicated an interest in purchasing Shares of Pluristem Life Systems, Inc. (the &#147;Company&#148;).  The purpose of this Questionnaire is to assure the Company that each Subscriber will meet the standards imposed by the 1933 Act and the appropriate exemptions of applicable state securities laws.  The Company will rely on the information contained in this Questionnaire for the purposes of such determination.  The Shares will not be registered under the 1933 Act in reliance upon the exemption from registration afforded by Section 3(b) and/or Section 4(2) and Regulation D of the 1933 Act.  This Questionnaire is not an offer of the Shares or any other securities of the Company in any state other than those
specifically authorized by the Company.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>All information contained in this Questionnaire will be treated as confidential.  However, by signing and returning this Questionnaire, each Subscriber agrees that, if necessary, this Questionnaire may be presented to such parties as the Company deems appropriate to establish the availability, under the 1933 Act or applicable state securities law, of exemption from registration in connection with the sale of the Shares hereunder.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>The Subscriber covenants, represents and warrants to the Company that it satisfies one or more of the categories of &#147;Accredited Investors&#148;, as defined by Regulation D promulgated under the 1933 Act, as indicated below:  (Please initial in the space provide those categories, if any, of an &#147;Accredited Investor&#148; which the Subscriber satisfies)</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 1</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of US&nbsp;$5,000,000;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in; text-indent:-0.88in;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 2</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A natural person whose individual net worth, or joint net worth with that person&#146;s spouse, on the date of purchase exceeds US&nbsp;$1,000,000;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 3</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A natural person who had an individual income in excess of US&nbsp;$200,000 in each of the two most recent years or joint income with that person&#146;s spouse in excess of US&nbsp;$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 4</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A &#147;bank&#148; as defined under Section&nbsp;(3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section&nbsp;3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2.5in;text-align:left;'><font size=2>Section&nbsp;15 of the </font><i><font size=2>Securities Exchange Act of 1934</font></i><font size=2> (United States); an insurance company as defined in Section&nbsp;2(13) of the 1933 Act; an investment company registered under the </font><i><font size=2>Investment Company Act of 1940</font></i><font size=2> (United States) or a business development company as defined in Section&nbsp;2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section&nbsp;301(c) or (d) of the </font><i><font size=2>Small Business Investment Act of 1958</font></i><font size=2> (United States); a plan with total assets in excess of $5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan
within the meaning of the </font><i><font size=2>Employee Retirement Income Security Act of 1974</font></i><font size=2> (United States) whose investment decisions are made by a plan fiduciary, as defined in Section&nbsp;3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 5</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A private business development company as defined in Section&nbsp;202(a)(22) of the </font><i><font size=2>Investment Advisers Act of 1940</font></i><font size=2> (United States);</font></p> </td> </tr>
    <tr >
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 6</font></p> </td>
        <td width="325" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A director or executive officer of the Company;</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 7</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule&nbsp;506(b)(2)(ii) under the 1933 Act;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 8</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories;</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in; text-indent:1in;text-align:left;'><font size=2>Note that prospective Subscribers claiming to satisfy one of the above categories of Accredited Investor may be required to supply the Company with a balance sheet, prior years&#146; federal income tax returns or other appropriate documentation to verify and substantiate the Subscriber&#146;s status as an Accredited Investor.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>If the Subscriber is an entity which initialled Category 8 in reliance upon the Accredited Investor categories above, state the name, address, total personal income from all sources for the previous calendar year, and the net worth (exclusive of home, home furnishings and personal automobiles) for each equity owner of the said entity: </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>______________________________________________________________________________</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>______________________________________________________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>The Subscriber hereby certifies that the information contained in this Questionnaire is complete and accurate and the Subscriber will notify the Company promptly of any change in any such information.  If this Questionnaire is being completed on behalf of a corporation, partnership, trust or estate, the person executing on behalf of the Subscriber represents that it has the authority to execute and deliver this Questionnaire on behalf of such entity.</font></p>

<p style=' margin-bottom:18pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the ______ day of __________________, 20_____.</font></p>


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            <p style='margin-left:0pt;text-indent:72pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><font size=2>If a Corporation, Partnership or</font><br> <font size=2>Other Entity:</font></p>
<p style='margin-left:0pt;text-indent:3.0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Print or Type Name of Entity</font></p>
<p style='margin-left:0pt;text-indent:3.0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Signature of Authorized Signatory</font></p>
<p style='margin-left:0pt;text-indent:3.0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Type of Entity</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:104.35pt'>
            <p style='margin-left:12.6pt;text-indent:72pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><font size=2>If an Individual:</font><br > <br > </p>
<p style='margin-left:12.6pt;text-indent:219.75pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Signature</font></p>
<p style='margin-left:12.6pt;text-indent:219.75pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Print or Type Name</font></p>
<p style='margin-left:12.6pt;text-indent:219.75pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Social Security/Tax I.D. No.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>&nbsp;</p>


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<DESCRIPTION>EXHIBIT 10.4
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:24pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>INVESTORS&#146; RIGHTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>GREEMENT</font></b></p>


<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.06in;text-align:left;'><font SIZE=1>D/BIP/642693.4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="48" style=' margin-left:205.5pt;border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 1 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:18pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:center;'><b><font size=2>INVESTORS&#146; RIGHTS AGREEMENT</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>THIS INVESTORS&#146; RIGHTS AGREEMENT (the &#147;</font><b><font size=2>Agreement</font></b><font size=2>&#148;) is made as of the 25th day of October, 2004, by and among Pluristem Life Systems Inc., a Nevada corporation (the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;) and the investors listed on </font><u><b><font size=2>Schedule</font></b><font size=2>&nbsp;</font><b><font SIZE=2>A</font></b></u><font size=2> hereto, each of which is herein referred to as an &#147;</font><b><font size=2>Investor</font></b><font size=2>&#148; with respect to the shares of Common Stock held by it and collectively the &#148;</font><b><font size=2>Investors</font></b><font size=2>&#148;). </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><u><font SIZE=2>RECITALS</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>WHEREAS, the Company and the Investor are parties to the Common Stock</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>and Warrant Purchase Agreement, dated as of October 25, 2004 (as the same may be amended from time to time, the "</font><b><font size=2>Purchase Agreement</font></b><font size=2>&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:0.98in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>WHEREAS, in order to induce the Investors to invest funds in the Company, the Investors and the Company hereby agree to enter into this Agreement which shall set forth the rights of the Investor to cause the Company to register shares of Common Stock issued or issuable to the Investors under the Purchase Agreement and certain other matters as set forth herein; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>NOW, THEREFORE, in consideration of the premises and the mutual</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>agreements and covenants hereinafter set forth, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Investors hereby agree as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="95" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Definitions</font></b></u><b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>For purposes of this Agreement:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in; text-indent:-0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>


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        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.1</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font size=2>Act</font></b><font size=2>&#148; means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.2</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font size=2>Form</font></b><font size=2>&nbsp;</font><b><font SIZE=2>S-3</font></b><font size=2>&#148; means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.3</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term</font><b><font size=2> </font></b><font size=2>&#148;</font><b><font size=2>Common Stock</font></b><font size=2>&#148; means the Company&#146;s Common Stock, par value US $0.00001 per share.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.4</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term "</font><b><font size=2>Control</font></b><font size=2>" (including the terms "</font><b><font size=2>Controlled by</font></b><font size=2>" and "</font><b><font size=2>under common control with</font></b><font size=2>&#148;) means, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.06in;text-align:left;'><font SIZE=1>D/BIP/642693.4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.</font></p>


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        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.5</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term</font><b><font size=2> </font></b><font size=2>"</font><b><font size=2>Person</font></b><font size=2>" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the 1934 Act.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.6</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term</font><b><font size=2> </font></b><font size=2>"</font><b><font size=2>Affiliate</font></b><font size=2>" means, with respect to any specified Person, any Person that directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.7</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term</font><b><font size=2> </font></b><font size=2>&#148;</font><b><font size=2>Warrant</font></b><font size=2>&#148; shall mean any of the warrants issued to the Investors pursuant to the Purchase Agreement.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.8</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#148;</font><b><font size=2>Registrable Securities&#148;</font></b><font size=2> means (i) Common Stock, held by the Investors and/or transferees of the Investors issued under the Purchase Agreement including Common Stock resulting from exercise of Warrants and (iii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the Common Stock referred to in clause (i), excluding in all cases, however, (A) any Registrable Securities sold by a person in a transaction in which his rights under this Agreement are not assigned; (B) any shares of Common Stock that could be distributed by the holder thereof pursuant to Rule 144 (in
accordance with applicable law) within six (6) months without the registration of such shares and (C) any shares of Common Stock covered by a registration statement in effect. </font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.9</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The number of shares of &#148;</font><b><font size=2>Registrable Securities then outstanding</font></b><font size=2>&#148; shall be determined by the number of Common Stock outstanding, calculated on an as-converted basis, which are Registrable Securities.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.10</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>"</font><b><font size=2>Rule 144</font></b><font size=2>" shall mean Rule 144 under the Act or any successor or similar rule as may be enacted by the SEC from time to time, but shall not include Rule 144A.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.11</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#148;</font><b><font size=2>Holder</font></b><font size=2>&#148; means any person lawfully owning or having the right to acquire Registrable Securities.</font></p> </td> </tr>
    <tr >
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.12</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font size=2>1934 Act</font></b><font size=2>&#148; means the Securities Exchange Act of 1934, as amended.</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.13</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font size=2>register</font></b><font size=2>,&#148; &#147;</font><b><font size=2>registered</font></b><font size=2>,&#148; and &#147;</font><b><font size=2>registration</font></b><font size=2>&#148; refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.</font></p> </td> </tr>
    <tr >
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.14</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font SIZE=2>SEC</font></b><font size=2>&#148; shall mean the Securities and Exchange Commission.</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="53" ></td>

        <td width="1" ></td>

        <td width="532" ></td>

        <td width="60" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2.</font></b></p> </td>
        <td width="154" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Initial Registration</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the conditions of this Section&nbsp;2, the Company shall file a registration statement (the &#147;Initial Registration&#148;) under the Act covering the registration of the Registrable Securities, to become effective within nine months of the Closing (as such term is defined in the Purchase Agreement). The Company shall use best efforts to effect the registration under the Act of all Registrable Securities held by the Holders as aforesaid.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Holders intend to distribute the Registrable Securities by means of an underwriting, they shall so advise the Company. The underwriter will be selected by the Holders subject to the approval of the Company (not to be unreasonably withheld). In such event the right of any person to include securities in such registration shall be conditioned upon such person&#146;s participation in such underwriting and the inclusion of such person&#146;s securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Holders) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the selected underwriter or underwriters. If any Holder disapproves of the terms of the underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company, the underwriter and the other Holders. The Registrable Securities so withdrawn from such underwriting shall also be withdrawn from such registration; provided that if by the withdrawal of such Registrable Securities, a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum limitations imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration, the right to include additional Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the underwriter advises the Company that marketing factors require a limitation of the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be limited and shall be allocated, first, to the Holders with respect to their Registrable Securities and second (if any additional shares may be included), to any holders of other securities. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. If the underwriter has not so limited the number of Registrable Securities to be underwritten, the Company may include securities for its own account or the account of others in such registration if the
underwriter so agrees and if the number of Registrable Securities which would otherwise have been included in such registration will not thereby be or the price applicable to such included securities will not thereby be reduced.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this section&nbsp;2 prior to the date which is the month anniversary of the Closing. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3.</font></b></p> </td>
        <td width="178" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Company Registration</font></b></u><b><font size=2>. </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If (but without any obligation to do so) the Company proposes, commencing nine months after the Closing, to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than a registration relating solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization or other transaction under Rule&nbsp;145 of the Act), the Company shall, at such time, promptly give each Holder who holds Registerable Securities a written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company, the Company shall, subject to the provisions of Section&nbsp;5, use
best efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall have the right to terminate or withdraw any registration initiated by it under this Section&nbsp;3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the Company.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with any offering involving an underwriting of shares of the Company&#146;s capital stock, the Company shall not be required under this Section&nbsp;3 to include any of the securities of the Holders in such underwriting unless they accept the terms of the underwriting, in customary form, as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with an underwriter or underwriters selected by the Company and approved by holders of at least a majority of the Registrable Securities, which approval shall not be unreasonably withheld, and then only in such quantity as the underwriters determine in their sole discretion will not materially and adversely jeopardize the success of the offering by the Company. If the total
amount of securities, including Registrable Securities, requested by the Holders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion could materially and adversely jeopardize the success of the offering by the Company, then the Company shall be required to include in the offering only that number of securities, including Registrable Securities, that the underwriters determine in their sole discretion will not materially and adversely jeopardize the success of the offering (the securities so included to be (i) first the securities which the Company proposes to register, (ii) second, if remaining, pro rata among the Holders exercising their piggyback registration rights pursuant to Section 3.1 above based on their holdings of the Registrable Securities. In no event shall any Registrable Securities be excluded from such offering unless all other stockholders&#146; securities are first
excluded.  </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the preceding parenthetical concerning apportionment, for any stockholder that is a Holder of Registrable Securities that is a partnership or corporation, the Affiliates, partners, retired partners and stockholders of such Holder, or the estates and family members of any such Affiliates, partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single &#147;Holder&#148;, as applicable, and any pro-rata reduction with respect to such &#147;Holder&#148; shall be based upon the aggregate amount of </font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>the applicable class of Registrable Securities owned by all such related entities and individuals.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The right of the Holders of Registrable Securities under this Section 3 may be used for an unlimited number of times.</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.</font></b></p> </td>
        <td width="176" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Form S-3 Registration</font></b></u><b><font size=2>. </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In case the Company shall receive from the Holders a written request or requests that the Company effects a registration on Form&nbsp;S-3 or any equivalent form and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;use best efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders&#146; Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders who have notified the Company in a written request given within twenty (20) days after receipt of such written notice from the Company of their intention to join such request (&#148;</font><b><font size=2>Form S-3 Joining Holders</font></b><font size=2>&#148;). </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this section&nbsp;4:</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td width="409" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>if Form&nbsp;S-3 is not available for such offering by the Holders;</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prior to the date which is the nine month anniversary of the Closing of the Purchase Agreement; </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;during the period starting with the date forty five&nbsp;(45) days prior to the Company&#146;s good faith estimate of the date of the filing of, and ending three months immediately following the effective date of, a Company-initiated registration (other than a registration relating solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization or other transaction under Rule&nbsp;145 of the Act), provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section&nbsp;4 shall not be counted as registration effected pursuant to Section&nbsp;2.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>5.</font></b></p> </td>
        <td width="216" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Obligations of the Company</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Whenever required under this Agreement to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prepare and file with the SEC a registration statement with respect to such Registrable Securities and use best efforts to cause such registration statement to become effective, and,  keep such registration statement effective until the distribution contemplated in the registration statement has been completed, or, in the event of registration pursuant to Sections 3 or 4, for a period of twelve (12) months, if earlier. The Company shall not be deemed to have used its reasonable best efforts to keep a registration statement effective during the applicable period if it voluntarily takes any action that would result in the Holder not being able to sell such Registrable Securities during that period, unless such action is required  under applicable law;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement within the period of Section 5.1 hereinabove;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;furnish to the Holders and each duly authorized underwriter such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, including indemnification and other customary provisions, in usual and customary form, with the managing underwriter of such offering;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act or the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use its reasonable best efforts to amend or supplement such prospectus as soon as practicable to cause such prospectus not to include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;notify each Holder of Registrable Securities covered by such registration statement, promptly after the Company shall receive notice thereof, of the time when such registration statement becomes effective or when any amendment or supplement or any prospectus forming a part of such registration has been filed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;notify each Holder of Registrable Securities covered by such registration statement, promptly of any request by the SEC for the amending or supplementing of such registration statement or prospectus for additional information.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;advise each Holder whose Registrable Securities are included in such registration statement promptly after the Company shall receive notice or otherwise obtain knowledge of the issuance of any order by the SEC suspending the effectiveness of such registration statement or amendment thereto or of the initiation or threatening of any proceeding for that purpose; and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal promptly if a stop order should be issued.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Agreement on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Agreement, if such securities are being sold through underwriters, or otherwise, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter, dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Same obligations as provided by subsections (h), (j), (l) and (m) of Section 3 of that certain Registration Rights Agreement dated as of January 15, 2004 among the Company and certain purchasers of its common stock.</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6.</font></b></p> </td>
        <td width="197" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Information from Holder</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.04in;text-align:justify;'><font size=2>It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the Registrable Securities of any selling Holder that such Holder shall promptly furnish to the Company in writing, upon its written request, such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder&#146;s Registrable Securities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>7.</font></b></p> </td>
        <td width="192" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Expenses of Registration</font></b></u><b><font size=2>. </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>All expenses other than underwriting discounts and commissions incurred in connection with registrations, including pre registration expenses such as stockmarket experts or advisors fees etc, filings or qualifications pursuant to Sections&nbsp;2, 3 and 4, including (without limitation) all registration, filing and qualification fees, printers&#146; and accounting fees, fees and disbursements of counsel for the Company, and if at least $500,000 in value of Shares and Warrants are sold pursuant to the Purchase Agreement, the reasonable fees and disbursements of one counsel for the selling Holders, shall be borne by the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.59in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8.</font></b></p> </td>
        <td width="168" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Delay of Registration</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>9.</font></b></p> </td>
        <td width="133" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Indemnification</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.04in;text-align:left;'><font size=2>In the event any Registrable Securities are included in a registration statement under this Agreement:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners or officers, directors and stockholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act (collectively and individually referred to as the &#147;</font><b><font size=2>Indemnified Party</font></b><font size=2>&#148;), against any losses, claims, damages or liabilities (joint or several) (or actions with respect thereof) to which they may become subject under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or
violations (collectively a &#147;</font><b><font size=2>Violation</font></b><font size=2>&#148;): (i)&nbsp;any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii)&nbsp;the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii)&nbsp;any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws; and the Company will reimburse each Indemnified Party, for any legal or other expenses reasonably incurred by them in connection with investigating, preparing or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in
this subsection&nbsp;9.1 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon (i) a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Indemnified Party, or (ii) in the case of a sale directly by a seller of Registrable Securities, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>9</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>such Violation was made in a preliminary prospectus and corrected in a final or amended prospectus and due notice was given to all Registrable Securities holders by the Company, and such seller of Registrable Securities failed to deliver a copy of the final or amended prospectus at or prior to the confirmation of the sale of Registrable Securities to the person or entity asserting such loss, claim, damage or liability in any case where such delivery is required by the Act or any state securities laws.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder, and stated to be specifically for use in connection with such registration; and each such Holder will reimburse any person intended to be indemnified pursuant to this subsection 9.2, for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection&nbsp;9.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld), and further provided that in no event shall any indemnity under this subsection&nbsp;9.2 exceed the gross proceeds from such offering received by such Holder.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly after receipt by an indemnified party under this Section&nbsp;9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section&nbsp;9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by
the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section&nbsp;9, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section&nbsp;9.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>10</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the indemnification provided for in this Section&nbsp;9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties&#146; relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall govern.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing indemnity agreements of the Company and Holders are subject to the condition that, insofar as they relate to any Violation made in a preliminary prospectus but eliminated or remedied in the amended prospectus on file with the SEC at the time the registration statement in question becomes effective or the amended prospectus filed with the SEC pursuant to Commission Rule 424(b) (the &#147;</font><b><font size=2>Final Prospectus</font></b><font size=2>&#148;), such indemnity agreement shall not inure to the benefit of any person if a copy of the Final Prospectus (i)&nbsp;was furnished to the indemnified party and (ii)&nbsp;was not furnished to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the 1933 Act.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of the Company and Holders under this Section&nbsp;9 shall survive the completion of any offering of Registrable Securities in a registration statement under this Agreement, and otherwise.</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10.</font></b></p> </td>
        <td width="348" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Reports Under Securities Exchange Act of 1934</font></b></u><b><font size=2>. </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>With a view to making available to the Holders the benefits of Rule&nbsp;144 promulgated under the Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;make and keep public information available, as those terms are understood and defined in SEC Rule&nbsp;144, at all times after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if the Company qualifies for registration on Form S-3, take such action, including the voluntary registration of its Common Stock under Section 12 of the 1934 Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>11</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act including all certifications of the chief executive officer and chief executive officer, or persons performing similar functions, required to be included therein or attached thereto; </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i)&nbsp;a written statement by the Company that it has complied with the reporting requirements of SEC Rule&nbsp;144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Act and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form&nbsp;S-3 (at any time after it so qualifies), (ii)&nbsp;a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii)&nbsp;such other information as may reasonably be requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such
securities without registration or pursuant to such form; and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;maintain controls and other procedures designed to ensure that information required to be disclosed by the Company in its reports filed or submitted under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the Commission&#146;s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company&#146;s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td width="238" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Restrictions on Sale by Holders</font></b><font size=2>. &nbsp;</font></u><b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>11.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything herein to the contrary, and notwithstanding that the Registerable Securities may be registered and freely tradable, commencing on the Closing, a Holder may not transfer, sell or offer for sale under such Initial Registration statement or otherwise such Holder&#146;s Registrable Securities for a period of nine (9) months. Commencing after the lapse of 9 months from the date of Closing, each of the Holders shall be entitled to sell up to 25% of such Holder&#146;s Registrable Securities in each three month period. For purposes of this section 11, &#147;</font><b><font size=2>Closing</font></b><font size=2>&#148; shall mean the first closing of the purchase by Holders of Registerable Securities. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>11.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to effect the orderly sale of the Registerable Securities as per section 11.2, the parties agree that the Registerable Securities will be held by an escrow agent named in the Escrow Agreement (defined in the Purchase Agreement) and will be released to each Investor as to 25% of the Shares and 25% of the Warrants on each of the 9, 12, 15, and 18 month anniversaries of the Closing. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>12</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>12.</font></b></p> </td>
        <td width="258" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Assignment of Registration Rights</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities provided that such transfer or assignment is made pursuant to the provisions of the Company&#146;s Certificate of Incorporation, as amended, and any other provisions relating to transfer of securities and applicable law, and provided further that: (a)&nbsp;the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b)&nbsp;such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including without limitation the provisions of Section&nbsp;13 below; and (c)&nbsp;such
assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>13.</font></b></p> </td>
        <td width="344" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Limitations on Subsequent Registration Rights. </font></b><font size=2>&nbsp;</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>From the date of the Closing under the Purchase Agreement and for 15 months thereafter, the Company shall not, without the prior written consent of the Holders of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (a)&nbsp;to include such securities in any registration filed under Section&nbsp;3 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holders that are included or (b)&nbsp;to demand registration of their securities, including without limitation, on Form S-3.  Notwithstanding the foregoing, in the event that any stockholder or future stockholder was granted any right which
is superior to, or more favorable than any of the rights granted to the Holders in this Agreement, the holders shall be entitled to such superior right without any further action required. The Company will not enter hereafter into any agreement with respect to its securities, which is inconsistent in any material respect with the rights granted to Holders in this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>14.</font></b></p> </td>
        <td width="120" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Miscellaneous</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Successors and Assigns</font></u><font size=2>. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any shares of Registrable Securities). Nothing in this Agreement, expressed or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. No assignment or transfer under this section 14 shall be made unless the transferee agrees in writing to be bound by all agreements binding upon the Company&#146;s stockholders immediately prior to such transfer. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Governing Law</font></u><font size=2>. This Agreement will be governed by and construed in accordance with the laws of the State of Israel excluding those pertaining to conflict of laws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>13</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Counterparts</font></u><font size=2>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts executed and delivered by facsimile, e-mail or any other visible electronic means shall be deemed as originals.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Titles and Subtitles</font></u><font size=2>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Notices</font></u><font size=2>. Any notice required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed given to such party under this Agreement on the earliest of the following: (a) the date of personal delivery; (b) one (1) business day after transmission by facsimile, e-mail or any other visible electronic means addressed to the other party at its facsimile number, e-mail or other address, with confirmation of transmission; (c) one (1) business day after deposit with a return receipt express courier for domestic deliveries, or five (5) business days after deposit with a return receipt express courier for deliveries oversees; or (d) five (5) business days after deposit with local mail for registered or certified mail (return receipt requested). All notices not
delivered personally or by facsimile or e-mail or electronically will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address of such party in the records of the Company or at such other address as such other party may designate by a ten (10) days prior written notice to the other parties hereto. All notices for delivery abroad will be sent by facsimile, e-mail or any other visible electronic means or by overnight courier. Any notice given hereunder to more than one person will be deemed to have been given, for purposes of counting time periods hereunder, on the date effectively given to the last party required to be given such notice.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Expenses</font></u><font size=2>. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys&#146; fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Entire Agreement: Amendments and Waivers; Prior Agreement</font></u><font size=2>. This Agreement (including the Schedules hereto, if any) constitutes the full and entire understanding and agreement among the parties hereto with regard to the subject matters hereof and thereof. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding. Any amendment or waiver effected in accordance with this paragraph shall be binding upon the Company, the Common Stock Holders and all Holders and their respective successors and assignees. Effective as of the date hereof, the provisions of the Prior
Agreement in connection with any of the provisions herein shall terminate and be of no further force and effect. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Severability</font></u><font size=2>. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>14</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>14.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><u><font size=2>Calculation</font></u><font size=2>. All calculations of the Holders&#146; pro rata share will be made by the Company as of the date of the Company&#146;s notice in which such pro rata share appears.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>14.10&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Obligation of Company; Binding Nature of Exercise</font></u><font size=2>. The Company agrees to use its best efforts to enforce the terms of this Agreement, to inform each Holder of any breach hereof (to the extent the Company has knowledge thereof) and to assist each Holder in the exercise of such Holder&#146;s rights and performance of such Holder&#146;s obligations hereunder.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>14.11&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Financial Information</font></u><font size=2>. The Company will provide to each Investor, with reasonable promptness, such other financial information and projections relating to the business, affairs and financial condition of the Company as is made available by the Company to any other stockholders of the Company (or any series, class or group of stockholders)and as from time to time such Investor may reasonably request.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><i><b><font size=2>(The Remainder Of This Page Is Intentionally Left Blank)</font></b></i></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>15</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>Pluristem Life Systems, Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:9pt; margin-left:0.03in; text-indent:-0.02in;text-align:left;'><font size=2>By: _________________</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>_____________, CEO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Address: ______________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>Investor:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>______________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in;text-align:left;'><b><font size=2>(Print Name)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>_________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in;text-align:left;'><b><font size=2>Signature</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>_________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in;text-align:left;'><b><font size=2>Address</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.03in; text-indent:-0.02in;text-align:center;'><b><font size=2>Pluristem Life Systems, Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.03in; text-indent:-0.02in;text-align:center;'><b><font size=2>Investors Rights Agreement dated October 25, 2004</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.03in; text-indent:-0.02in;text-align:center;'><b><font size=2>Signature Page</font></b><font size=2> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>16</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.03in; text-indent:-0.02in;text-align:center;'><u><font size=2>&nbsp;&nbsp;</font><b><font size=2>Schedule A</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(Investors&#146; Rights Agreement)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2in; text-indent:-2in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2in; text-indent:-2in;text-align:center;'><u><b><font size=2>Schedule of Investors</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2in; text-indent:-2in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2in; text-indent:-2in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

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<SEQUENCE>5
<FILENAME>ex10-5fsb2.htm
<DESCRIPTION>EXHIBIT 10.5
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<p STYLE=' MARGIN-BOTTOM:6PT; MARGIN-TOP:12PT;TEXT-ALIGN:RIGHT;'><FONT SIZE=2>EXHIBIT 10.5</FONT></P>

<p STYLE=' MARGIN-BOTTOM:6PT; MARGIN-TOP:12PT;TEXT-ALIGN:CENTER;'><B><FONT SIZE=2>ESCROW AGREEMENT</FONT></B></P>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>THIS AGREEMENT dated for reference the </font><u><font size=2>25th</font></u><font size=2> day of October, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:justify;'><font SIZE=2>AMONG:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS</font></b><font size=2>, </font><b><font SIZE=2>INC.</font></b><font size=2>,  a Nevada company, having an office at Matam Centre, Building 20, Haifa, 31905, Israel (herein called &#147;Pluristem&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE FIRST PART</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font SIZE=2>AND:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2> (herein called the &#147;Investor&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE SECOND PART</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="59" style=' border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font SIZE=2>AND:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2> (herein called the &#147;Escrow Agent&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE THIRD PART</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font SIZE=2>WITNESSES THAT WHEREAS:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Pluristem approved of a private placement of up to 15,000,000 Units each Unit consisting of one common share (each a &#147;Share&#148;) and one common share purchase warrant (each a &#147;Warrant&#148;) with Investors listed in Schedule A attached hereto pursuant to Share Purchase Agreements (&#147;SPAs&#148;) and Investors&#146; Rights Agreements (&#147;IRAs&#148;)dated for reference October 25, 2004;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SPAs and IRAs contemplated that the Shares and Warrants would be held in escrow with release over time;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pluristem and the Investor desire to appoint the Escrow Agent, and the Escrow Agent has agreed to act as escrow agent, to hold the Shares and Warrants in accordance with the terms hereof;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/644415.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 2 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree as follows:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="298" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>DEFINITIONS AND INTERPRETATION</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wherever used in this Agreement, unless the context otherwise requires, the following words and terms will have the meanings shown:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Agreement&#148; means this escrow agreement;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Company&#148; means Pluristem;</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Closing Date&#148; means the day the initial Shares and Warrants were paid for and issued by the Company;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Release Date&#148; means each of the 9, 12, 15 and 18 month anniversaries of the Closing Date;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Subsequent Closing Date&#148; means any closing of purchase and sale of Shares and Warrants pursuant to the SPAs not completed on the Closing Date.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.2</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In this Agreement:</font></p> </td>
        <td   colspan="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the headings have been inserted for convenience of reference only and in no way define, limit, or enlarge the scope or meaning of the provisions of this Agreement;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>all references to any party, whether a party to this Agreement or not, will be read with such changes in number and gender as the context or reference requires; and</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>when the context hereof makes it possible, the word &#147;person&#148; includes in its meaning any firm and any body corporate or politic.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>DEPOSIT OF SHARES AND WARRANTS</font></u></p> </td>
        <td  width="221">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="4" ></td>

        <td width="146" ></td>

        <td width="77" ></td>

        <td width="103" ></td>

        <td width="2" ></td>

        <td width="239" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will within three (3) days of the Closing Date or any Subsequent Closing Dates, whichever is applicable, deliver the Shares and Warrants to the Escrow Agent for deposit in escrow with the Escrow Agent on the terms of this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td width="185" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>ESCROW PROVISIONS</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company hereby directs the Escrow Agent to retain the Shares and Warrants in safekeeping, and not to do or cause anything to be done to release the Shares and Warrants from escrow except in accordance with this Agreement.  The Escrow Agent accepts its responsibilities hereunder and agrees to perform them in accordance with the terms hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will hold the Shares and Warrants in escrow and will deliver twenty five (25%) percent of each Investor&#146;s Shares and Warrants to such Investor on each Release Date.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/644415.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 3 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Shares and Warrants will not be released from escrow, transferred within escrow or otherwise in any manner dealt with except in accordance with this Agreement or as may be required by reason of the bankruptcy of the Company, in which case the Escrow Agent will hold the Shares and Warrants subject to this Agreement, for whatever person, firm or corporation shall be legally entitled to be or become the owner thereof.</font></p>


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    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td width="179" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>THE ESCROW AGENT</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In exercising the rights, duties and obligations prescribed or confirmed by this Agreement, the Escrow Agent will act honestly and in good faith and will exercise that degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Investor jointly and severally covenant and agree from time to time and at all times hereafter well and truly to save, defend and keep harmless and fully indemnify the Escrow Agent, its successors, and assigns, from and against all loss, costs, charges, suits, demands, claims, damages and expenses which the Escrow Agent, its successors or assigns may at any time or times hereafter bear, sustain, suffer or be put unto for or by reason or on account of its acting pursuant to this Agreement or anything in any manner relating thereto or by reason of the Escrow Agent&#146;s compliance in good faith with the terms hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case proceedings should hereafter be taken in any court respecting the Shares and Warrants, the Escrow Agent will not be obliged to defend any such action or submit its rights to the court until it has been indemnified by other good and sufficient security against its costs of such proceedings.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will have no responsibility in respect of loss of the Shares and Warrants except the duty to exercise such care in the safekeeping thereof as it would exercise if the Shares and Warrants belonged to the Escrow Agent.  The Escrow Agent may act on the advice of counsel but will not be responsible for acting or failing to act on the advice of counsel.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will not be bound in any way by any contract between the parties hereto whether or not it has notice thereof or of its terms and conditions and the only duty, liability and responsibility of the Escrow Agent will be to hold the Shares and Warrants as herein directed and to pay and deliver the same to such persons and other such conditions as are herein set forth.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In no event will the Escrow Agent be deemed to have assumed any liability or responsibility for the sufficiency, form and manner of making any notice or demand provided for under this Agreement or of the identity of the persons executing the same, but it shall be sufficient if any writing purporting to be such a notice, demand or protest is served upon the Escrow Agent in any manner sufficient to bring it to its attention.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Shares and Warrants are attached, garnished or levied upon under any court order, or if the delivery of such property is stayed or enjoined by any court order or if any court order, judgment or decree is made or entered affecting such property or affecting any act by the Escrow Agent, the Escrow Agent may, in its sole discretion, obey and comply with all writs, orders, judgments or decrees so entered or issued, whether with or without </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/644415.2</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 4 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>jurisdiction, notwithstanding any provision of this Agreement to the contrary.  If the Escrow Agent obeys and complies with any such writs, order, judgment or decrees it will not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding that such writs, orders, judgments or decrees may be subsequently reversed, modified, annulled, set aside or vacated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as herein otherwise provided, the Escrow Agent is authorized and directed to disregard in its sole discretion any and all notices and warnings which may be given to it by any of the parties hereto or by any other person, firm, association or corporation.  It will, however, obey the order, judgment or decree of any court of competent jurisdiction, and it is hereby authorized to comply with and obey such orders, judgements or decrees and in case of such compliance, it shall not be liable by reason thereof to any of the parties hereto or to any other person, firm, association or corporation, even if thereafter any such order, judgment or decree may be reversed, modified, annulled, set aside or vacated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Escrow Agent receives any written instructions contrary to the instructions contained in this Agreement, the Escrow Agent may continue to hold the Shares and Warrants until the lawful determination of the issue between the parties hereto.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If protest is made to any action contemplated by the Escrow Agent under this Agreement, the Escrow Agent may continue to hold the Shares and Warrants until the right to the Shares and Warrants is legally determined by a court of competent jurisdiction or otherwise.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent may resign as Escrow Agent by giving not less then ten (10)&nbsp;days&#146; written notice thereof to each of the Company or the Investor.  The Company and the Investor may terminate the Escrow Agent by giving to the Escrow Agent a notice of termination executed by each of them not less than ten (10)&nbsp;days prior to the proposed date of termination.  The resignation or termination of the Escrow Agent will be effective and the Escrow Agent will cease to be bound by this Agreement on the date that is ten (10)&nbsp;days after the date of receipt of the termination notice given hereunder or on such other date as the Escrow Agent, the Company and the Investor may agree upon.  All indemnities granted to the Escrow Agent will survive the termination of this Agreement or the
resignation or termination of the Escrow Agent.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything herein to the contrary, the Escrow Agent may act upon any written instructions given by the Company and the Investor jointly.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary contained herein, in the event of any dispute arising between the Company and the Investor or between any other persons or between any of them with respect to this Agreement or any matters arising thereto, or with respect to the Shares and Warrants, the Escrow Agent may in its sole discretion deliver and interplead the Shares and Warrants into court and such delivery and interpleading will be an effective discharge to the Escrow Agent.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="241" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td width="145" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>COUNTERPARTS</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in several counterparts, each of which will be deemed to be an original and all of which will together constitute one and the same instrument.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/644415.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 5 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="190" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td width="94" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>GENERAL</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Agreement will be binding upon the parties hereto unless reduced to writing and signed by the parties.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement will enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors, and assigns.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The parties will execute and deliver all such further documents, do or cause to be done all such further acts and things, and give all such further assurances as may be necessary to give full effect to the provisions and intent of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement will be governed by and construed in accordance with the laws of Israel.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted to be given under this Agreement will be in writing and may be given by delivering, sending by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy, or sending by prepaid registered mail posted in Israel or the United States, the notice to the addresses set forth on the first page of this Agreement (or to such other address or facsimile number as any party may specify by notice in writing to another party).  Any notice delivered or sent by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy on a business day will be deemed conclusively to have been effectively given on the day the notice was delivered, or the transmission was sent
successfully, as the case may be.  Any notice sent by prepaid registered mail will be deemed conclusively to have been effectively given on the third business day after posting; but if at the time of posting or between the time of posting and the third business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Notice may be delivered by facsimile to the following facsimile numbers:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="268" style=' margin-left:1.0in;border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Escrow Agent:</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Tulchinsky Stern &amp; Co</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Attention:</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Baruch Perl</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="100" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fax No.:</font></p> </td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>972-2-651-3133</font></p> </td>
        <td  width="43">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="108" ></td>

        <td width="0" ></td>

        <td width="103" ></td>

        <td width="33" ></td>

        <td width="47" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:left;'><font size=2>Pluristem Life Systems, Inc.</font></p>


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    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Attention:</font></p> </td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Yossi Keret</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fax No.:</font></p> </td>
        <td  colspan="4" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>972-4-850-1085</font></p> </td>
        <td  width="64">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="77" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Investor:</font></p>  </td>
        <td   colspan="6">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="4" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Fax No./Home Email:</font></p>  </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="77" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Tel. No.:</font></p>  </td>
        <td   colspan="6">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.6</font></p> </td>
        <td  colspan="7" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Time is of the essence of this Agreement.</font></p> </td> </tr>
    <tr>
        <td width="104" ></td>

        <td width="83" ></td>

        <td width="20" ></td>

        <td width="0" ></td>

        <td width="71" ></td>

        <td width="31" ></td>

        <td width="33" ></td>

        <td width="69" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/644415.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 6 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement on the date of such communication by the party so delivering such copy.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is understood and agreed by the parties to this Agreement that the only duties and obligations of the Escrow Agent are those specifically stated herein and no other. Except for the disposition of the Shares, Investor shall be recorded by the Company as owner of the Shares and Warrants and shall be entitled to exercise any right and be subject to any obligation as a stockholder and/or warrant holder, including, without limitation, any voting rights associated with the Shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party has been advised and has opportunity to seek and obtain independent legal advice respecting all aspects of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>IN WITNESS WHEREOF the parties have caused this Agreement to be executed and delivered effective as of this </font><u><font size=2>25th</font></u><font size=2> day of October, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="46" style=' border-collapse:collapse'>
    <tr>
        <td width="46" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Per:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="76" style=' margin-left:3.5in;border-collapse:collapse'>
    <tr>
        <td width="76" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><b><font size=2>Investor</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>as Escrow Agent</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="46" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Per:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="65" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Partner</font></p> </td> </tr>
    <tr>
        <td width="46" ></td>

        <td width="197" ></td>

        <td width="65" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/644415.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 7 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>SCHEDULE A</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>LIST OF INVESTORS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="517" style=' border-collapse:collapse'>
    <tr>
        <td width="432" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Investor</font></u></p> </td>
        <td width="85" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Units held</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/644415.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<TYPE>EX-10
<SEQUENCE>6
<FILENAME>ex10-6fsb2.htm
<DESCRIPTION>EXHIBIT 10.6
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS WARRANT TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="64" style=' margin-left:390.0pt;border-collapse:collapse'>
    <tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>No. 01</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>WARRANT TO PURCHASE COMMON STOCK</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>OF</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC. </font></b><font size=2>(the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>VOID AFTER 17:00 p.m. N.Y. Time</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>on the last day of the Term (as set forth in Section 1 below)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This is to certify that, for value received, </font><b><font SIZE=2>PARK RIDGE INVESTMENTS A.V.V.</font></b><font size=2>, or its registered assigns (the &#147;</font><b><font size=2>Holder</font></b><font size=2>&#148;) is entitled to purchase, subject to the provisions of this Warrant, from the Company an aggregate of 250,000 fully paid and non-assessable shares of the Common Stock, as adjusted from time to time as provided below (&#147;</font><b><font size=2>Common Stock</font></b><font size=2>&#148; and such shares, the &#147;</font><b><font size=2>Warrant Shares</font></b><font size=2>&#148;) of the Company, as constituted on the date hereof (the &#147;</font><b><font size=2>Warrant Issue Date</font></b><font size=2>&#148;), upon surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, at the principal office of the Company referred to
below, and simultaneous payment therefor in lawful money of the United States, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Term of Warrant</font></u><font size=2>. Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time during the term commencing on the Warrant Issue Date and ending at the earlier of (i) second annual anniversary of the Warrant Issue Date; or (ii) subject to notice requirements of Section 12(b) hereto, the acquisition of the Company by another entity by means of a reorganization, merger or consolidation which results in more than fifty percent (50%) of the outstanding voting securities of the surviving entity being held by persons who were not stockholders of the Company immediately prior to such transaction; or (iii) subject to notice requirements of Section 12(b) hereto, a sale, lease, assignment, transfer or other disposition of all or substantially all of the
assets of the Company; (each of the event in this subsections (ii) and (iii), a &#147;</font><b><font size=2>M&amp;A Transaction</font></b><font size=2>&#148;); (the </font><b><font size=2>&#147;Term&#148;</font></b><font size=2>), and shall be void thereafter. </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in; text-indent:-0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise Price</font></u><font size=2>.  The purchase price at which this Warrant may be exercised shall be $0.3 per Warrant Share, as adjusted from time to time pursuant to Section 9 hereof (the </font><b><font size=2>&#147;Exercise Price&#148;</font></b><font size=2>).</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>D/JLT/646108.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="602" style=' border-collapse:collapse'>
    <tr >
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise of Warrant</font></u></p> </td>
        <td  width="407">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Manner of Exercise</font></u><font size=2>.  This Warrant is exercisable by the Holder in whole or in part, at any time and from time to time, during the Term, by the surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, to the Secretary of the Company at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), provided that the Holder shall also deliver to the Company, concurrent with such surrender, a check payable in lawful money of the United States for the aggregate Exercise Price for the Warrant Shares being purchased.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>3.2.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date.  As promptly as practicable on or after such date and in any event within thirty (30) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the remaining number of shares
for which this Warrant may then be exercised.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Fractional Shares or Scrip</font></u><font size=2>.  No fractional shares or scrip representing fractional share shall be issued upon the exercise of this Warrant.  In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall round up such fraction to the nearest whole number.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Replacement of Warrant</font></u><font size=2>.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of loss, theft, or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Compliance with Securities Laws</font></u><font size=2>.  This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>6.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The Holder of this Warrant, by acceptance hereof, acknowledges that (i) this Warrant and the Warrant Shares to be issued upon exercise hereof are being acquired solely for the Holder&#146;s own account and not as an agent or nominee for any other party, and for investment; (ii) the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares except under circumstances that will not result in a </font></p> </td> </tr>
    <tr>
        <td width="53" ></td>

        <td width="1" ></td>

        <td width="53" ></td>

        <td width="113" ></td>

        <td width="458" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>violation of any federal securities laws, including without limitation the Act, any state securities laws or any applicable securities law of foreign jurisdictions, or any rules or regulations promulgated thereunder; and (iii) such Holder is either an &#147;accredited investor&#148; within the meaning of Securities and Exchange Commission Rule 501 of Regulation&nbsp;D, as presently in effect or is not a U.S. Person, as defined by Regulation S promulgated under the Act.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unless the Warrant Shares have been registered under the Act, all shares issuable hereunder shall bear the following legend: </font><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reservation of Stock</font></u><font size=2>.  The Company covenants that during the Term this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of common Stock upon the exercise of this Warrant and, from time to time, will take all steps necessary to provide sufficient reserves of shares of the Common Stock issuable upon the exercise of the Warrant.  The Company further covenants that all Warrant Shares will be duly authorized, validly issued, fully paid and nonassessable, and will be free from all taxes, liens and preemptive rights in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein).  The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares issued upon the exercise of this Warrant. </font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Amendments and Waivers</font></u><font size=2>.  This Warrant is being issued as one of a series of warrants issued by the Company on the date hereof and, accordingly, any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the holder of this Warrant.  Any amendment or waiver effected in such manner shall be effective to modify or waive the provisions of this Warrant. No waivers of, or exceptions to any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments</font></u><font size=2>.  The Exercise Price and the number of Warrant Shares purchasable hereunder are subject to adjustment from time to time during the Term of this Warrant as follows:</font></p> </td> </tr>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reclassification.</font></u><font size=2> If the Company at any time while this Warrant, or any portion thereof, remains outstanding and un-expired shall, by reorganization or reclassification of securities or otherwise (including in connection with any anti-dilution adjustments), change any of the </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such reorganization or reclassification or other change and the Exercise Price then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted (provided the aggregate purchase price shall remain the same) such that this Warrant shall be exercisable into, in lieu of the number of Warrant Shares which the Holder would otherwise have been entitled to receive, a number of shares of such other class or classes of stock that
would have been subject to receipt by the Holder had the Holder exercised the Warrant immediately before that change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:35.45pt; border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Split, Subdivision or Combination of Shares</font></u><font size=2>.  If the Company at any time while this Warrant, or any portion hereof, remains outstanding and un-expired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased and the number of securities issuable upon exercise proportionately increased in the case of a split or subdivision or the Exercise Price of such securities shall be proportionately increased and the number of securities issuable upon exercise proportionately decreased in the case of a combination. Any adjustment under this Section&nbsp;9.2 shall become effective concurrently with the subdivision or combination becomes
effective.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.3.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments for Dividends in Stock or Other Securities or Property</font></u><font size=2>.  If, while this Warrant, or any portion hereof, remains outstanding and un-expired, the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property of the Company by way of dividend or otherwise, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon the exercise of this Warrant, and without payment of any additional consideration thereof, the amount of such other or additional stock or other
securities or property as aforesaid of the Company which such Holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 9. Any adjustment under this Section&nbsp;9.3 shall become effective as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.4.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Certificate as to Adjustments</font></u><font size=2>.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 9, the Company shall, upon the written request of any holder of this Warrant, furnish or cause to be furnished to such holder a certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.</font></p> </td> </tr>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.5.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Impairment</font></u><font size=2>.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all of the provisions of this Section 9 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of this Warrant against impairment.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Governing Law</font></u><font size=2>.  This Warrant and the legal relations between the parties arising hereunder shall be governed by and interpreted in accordance with the laws of the State of Israel without regard to its conflict of laws principles. The parties hereto agree to submit to the nonexclusive jurisdiction of the federal and state courts of the State of Israel with respect to the breach or interpretation of this Warrant or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Entire Agreement, Successors and Assigns</font></u><font size=2>.  This Warrant constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assign as a matter law, heirs, executors and administrators of the parties hereto.  The Holder may not assign, distribute or otherwise transfer this Warrant without the consent of the Company (and in such event subject to the provisions of Section 6 herein), except for a permitted transfer as such term is defined
in the Investors&#146; Rights Agreement dated as of the date hereof between the Company and certain of its stockholders, as amended from time to time.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Notices, Etc</font></u><font size=2>.   (a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of any Investor, to the address of such Investor as set forth on the signature page hereto or such other address of such Investor as shall be </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>designated in writing from time to time by such Investor.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States or Israeli mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of such facsimile.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company shall give the Holder a written notice of impending M&amp;A Transaction or a transaction (including, without limitation, any reorganization, merger or consolidation, or sale or exchange of capital stock) as a result of which the stockholders of the Company immediately prior to such transaction receive cash, securities of a publicly traded company, or any other assets, or a combination thereof, as consideration, not later than twenty (20) business days prior to the stockholders&#146; meeting called to approve such transaction, or twenty (20) business days prior to the closing of such transaction, whichever is earlier, and shall also notify the Holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and
conditions of the impending transaction and the provisions of this Warrant in connection therewith, and the Company shall thereafter give the Holder prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) business days after the Company has given the first notice provided for herein or sooner than twenty (20) business days after the Company has given notice of any material changes provided for herein.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Delays or Omissions</font></u><font size=2>.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Warrant, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Subject to Section 8, any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Warrant, or any waiver on the part of any Holder of any provisions or conditions of this
Warrant, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Warrant or by law or otherwise afforded to any holder, shall be cumulative and not alternative.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Expenses</font></u><font size=2>.  Except as otherwise provided herein, the Company and the Holder shall each bear its own expenses incurred on its behalf with respect to this Warrant and the transactions contemplated hereby.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Severability</font></u><font size=2>.  In the event that any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Warrant shall continue in full force and effect without said provision, and such provision shall be given effect to the extent legally possible.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Titles and Subtitles</font></u><font size=2>.  The titles and subtitles used in this Warrant are used for convenience only and are not considered in construing or interpreting this Warrant.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>17.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Survival</font></u><font size=2>.  The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>18.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Stockholder Rights</font></u><font size=2>. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote such Warrant Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.  </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>[</font><i><font size=2>Balance left blank intentionally</font></i><font size=2>]</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>IN WITNESS HEREOF, Pluristem Life Systems, Inc. has caused this Warrant to be executed by its officers thereunto duly authorized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Warrant Issue Date:  October ___, 2004</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.87in; text-indent:0.49in;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="326" style=' margin-left:170.25pt;border-collapse:collapse'>
    <tr>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="259" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>______________________________</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="54" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="54" ></td>

        <td width="8" ></td>

        <td width="5" ></td>

        <td width="259" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>AGREED AND ACCEPTED BY:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="214" style=' border-collapse:collapse'>
    <tr>
        <td width="189" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>[</font></p> </td>
        <td width="25" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>]</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="340" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>_______________________________ (signature)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td width="268" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>_______________________________</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td width="268" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>_______________________________</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Address: ____________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>____________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Fax: ________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>NOTICE OF EXERCISE</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>To: Pluristem Life Systems, Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>NOTICE OF EXERCISE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The undersigned hereby elects to purchase __________ shares of the Common Stock of Pluristem Life Systems, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>(Name)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Address)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for the account of the undersigned and not as an agent or nominee for any other party, and for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Securities Act of 1933, as amended, any state securities laws or any applicable securities laws of foreign jurisdictions or any rules or regulations promulgated thereunder.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Signature)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Date)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>9</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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<TYPE>EX-10
<SEQUENCE>7
<FILENAME>ex10-7fsb2.htm
<DESCRIPTION>EXHIBIT 10.7
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS WARRANT TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="72" style=' margin-left:390.0pt;border-collapse:collapse'>
    <tr>
        <td width="72" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>No. 190</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>WARRANT TO PURCHASE COMMON STOCK</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>OF</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC. </font></b><font size=2>(the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>VOID AFTER 17:00 p.m. N.Y. Time</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>on the last day of the Term (as set forth in Section 1 below)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This is to certify that, for value received, </font><b><font SIZE=2>YOKIM ASSET MANAGEMENT CORP.</font></b><font size=2>, or its registered assigns (the &#147;</font><b><font size=2>Holder</font></b><font size=2>&#148;) is entitled to purchase, subject to the provisions of this Warrant, from the Company an aggregate of 50,000 fully paid and non-assessable shares of the Common Stock, as adjusted from time to time as provided below (&#147;</font><b><font size=2>Common Stock</font></b><font size=2>&#148; and such shares, the &#147;</font><b><font size=2>Warrant Shares</font></b><font size=2>&#148;) of the Company, as constituted on the date hereof (the &#147;</font><b><font size=2>Warrant Issue Date</font></b><font size=2>&#148;), upon surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, at the principal office of the Company referred to
below, and simultaneous payment therefor in lawful money of the United States, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Term of Warrant</font></u><font size=2>. Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time during the term commencing on the Warrant Issue Date and ending at the earlier of (i) November 30, 2006; or (ii) subject to notice requirements of Section 12(b) hereto, the acquisition of the Company by another entity by means of a reorganization, merger or consolidation which results in more than fifty percent (50%) of the outstanding voting securities of the surviving entity being held by persons who were not stockholders of the Company immediately prior to such transaction; or (iii) subject to notice requirements of Section 12(b) hereto, a sale, lease, assignment, transfer or other disposition of all or substantially all of the assets of the Company; (each of the
event in this subsections (ii) and (iii), a &#147;</font><b><font size=2>M&amp;A Transaction</font></b><font size=2>&#148;); (the </font><b><font size=2>&#147;Term&#148;</font></b><font size=2>), and shall be void thereafter. </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>D/BIP/705532.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise Price</font></u><font size=2>.  The purchase price at which this Warrant may be exercised shall be $0.10 per Warrant Share, as adjusted from time to time pursuant to Section 9 hereof (the </font><b><font size=2>&#147;Exercise Price&#148;</font></b><font size=2>).</font></p> </td> </tr>
    <tr >
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise of Warrant</font></u></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Manner of Exercise</font></u><font size=2>.  This Warrant is exercisable by the Holder in whole or in part, at any time and from time to time, during the Term, by the surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, to the Secretary of the Company at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), provided that the Holder shall also deliver to the Company, concurrent with such surrender, a check payable in lawful money of the United States for the aggregate Exercise Price for the Warrant Shares being purchased.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.2.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date.  As promptly as practicable on or after such date and in any event within thirty (30) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the remaining number of shares for
which this Warrant may then be exercised.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Fractional Shares or Scrip</font></u><font size=2>.  No fractional shares or scrip representing fractional share shall be issued upon the exercise of this Warrant.  In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall round up such fraction to the nearest whole number.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Replacement of Warrant</font></u><font size=2>.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of loss, theft, or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Compliance with Securities Laws</font></u><font size=2>.  This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Holder of this Warrant, by acceptance hereof, acknowledges that (i) this Warrant and the Warrant Shares to be issued upon exercise </font></p> </td> </tr>
    <tr>
        <td width="53" ></td>

        <td width="1" ></td>

        <td width="53" ></td>

        <td width="113" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>hereof are being acquired solely for the Holder&#146;s own account and not as an agent or nominee for any other party, and for investment; (ii) the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Act, any state securities laws or any applicable securities law of foreign jurisdictions, or any rules or regulations promulgated thereunder; and (iii) such Holder is either an &#147;accredited investor&#148; within the meaning of Securities and Exchange Commission Rule 501 of Regulation&nbsp;D, as presently in effect or is not a U.S. Person, as defined by Regulation S promulgated under the Act.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unless the Warrant Shares have been registered under the Act, all shares issuable hereunder shall bear the following legend: </font><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reservation of Stock</font></u><font size=2>.  The Company covenants that during the Term this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of common Stock upon the exercise of this Warrant and, from time to time, will take all steps necessary to provide sufficient reserves of shares of the Common Stock issuable upon the exercise of the Warrant.  The Company further covenants that all Warrant Shares will be duly authorized, validly issued, fully paid and nonassessable, and will be free from all taxes, liens and preemptive rights in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein).  The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares issued upon the exercise of this Warrant. </font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Amendments and Waivers</font></u><font size=2>.  This Warrant is being issued as one of a series of warrants issued by the Company on the date hereof and, accordingly, any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the holder of this Warrant.  Any amendment or waiver effected in such manner shall be effective to modify or waive the provisions of this Warrant. No waivers of, or exceptions to any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments</font></u><font size=2>.  The Exercise Price and the number of Warrant Shares purchasable hereunder are subject to adjustment from time to time during the Term of this Warrant as follows:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reclassification.</font></u><font size=2> If the Company at any time while this Warrant, or any portion thereof, remains outstanding and un-expired shall, by reorganization or reclassification of securities or otherwise (including in connection with any anti-dilution adjustments), change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such reorganization or reclassification or other change and the Exercise Price then in effect shall, concurrently with the
effectiveness of such reorganization or reclassification, be proportionately adjusted (provided the aggregate purchase price shall remain the same) such that this Warrant shall be exercisable into, in lieu of the number of Warrant Shares which the Holder would otherwise have been entitled to receive, a number of shares of such other class or classes of stock that would have been subject to receipt by the Holder had the Holder exercised the Warrant immediately before that change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Split, Subdivision or Combination of Shares</font></u><font size=2>.  If the Company at any time while this Warrant, or any portion hereof, remains outstanding and un-expired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased and the number of securities issuable upon exercise proportionately increased in the case of a split or subdivision or the Exercise Price of such securities shall be proportionately increased and the number of securities issuable upon exercise proportionately decreased in the case of a combination. Any adjustment under this Section&nbsp;9.2 shall become effective concurrently with the subdivision or combination becomes
effective.</font></p> </td> </tr>
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        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.3.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments for Dividends in Stock or Other Securities or Property</font></u><font size=2>.  If, while this Warrant, or any portion hereof, remains outstanding and un-expired, the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property of the Company by way of dividend or otherwise, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon the exercise of this Warrant, and without payment of any additional consideration thereof, the amount of such other or additional stock or other
securities or property as aforesaid of the Company which such Holder would hold on the date of such </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 9. Any adjustment under this Section&nbsp;9.3 shall become effective as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.4.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Certificate as to Adjustments</font></u><font size=2>.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 9, the Company shall, upon the written request of any holder of this Warrant, furnish or cause to be furnished to such holder a certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.</font></p> </td> </tr>
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        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.5.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Impairment</font></u><font size=2>.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all of the provisions of this Section 9 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of this Warrant against impairment.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Governing Law</font></u><font size=2>.  This Warrant and the legal relations between the parties arising hereunder shall be governed by and interpreted in accordance with the laws of the State of Israel without regard to its conflict of laws principles. The parties hereto agree to submit to the nonexclusive jurisdiction of the federal and state courts of the State of Israel with respect to the breach or interpretation of this Warrant or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Entire Agreement, Successors and Assigns</font></u><font size=2>.  This Warrant constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assign as a matter law, heirs, executors and administrators of the parties hereto.  The Holder may not assign, distribute or otherwise transfer this Warrant without the consent of the Company (and in such event subject to the provisions of Section 6 herein), except for a permitted transfer as such term is defined
in the Investors&#146; Rights Agreement dated as of the date hereof between the Company and certain of its stockholders, as amended from time to time.</font></p> </td> </tr>
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        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Notices, Etc</font></u><font size=2>.   (a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of any Investor, to the address of such Investor as set forth on the signature page hereto or such other address of such Investor as shall be designated in writing from time to time by such Investor.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States or Israeli mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of such facsimile.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company shall give the Holder a written notice of impending M&amp;A Transaction or a transaction (including, without limitation, any reorganization, merger or consolidation, or sale or exchange of capital stock) as a result of which the stockholders of the Company immediately prior to such transaction receive cash, securities of a publicly traded company, or any other assets, or a combination thereof, as consideration, not later than twenty (20) business days prior to the stockholders&#146; meeting called to approve such transaction, or twenty (20) business days prior to the closing of such transaction, whichever is earlier, and shall also notify the Holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and
conditions of the impending transaction and the provisions of this Warrant in connection therewith, and the Company shall thereafter give the Holder prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) business days after the Company has given the first notice provided for herein or sooner than twenty (20) business days after the Company has given notice of any material changes provided for herein.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Delays or Omissions</font></u><font size=2>.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Warrant, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Subject to Section 8, any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Warrant, or any waiver on the part of any Holder of any provisions or conditions of this
Warrant, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Warrant or by law or otherwise afforded to any holder, shall be cumulative and not alternative.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Expenses</font></u><font size=2>.  Except as otherwise provided herein, the Company and the Holder shall each bear its own expenses incurred on its behalf with respect to this Warrant and the transactions contemplated hereby.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Severability</font></u><font size=2>.  In the event that any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Warrant shall continue in full force and effect without said provision, and such provision shall be given effect to the extent legally possible.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Titles and Subtitles</font></u><font size=2>.  The titles and subtitles used in this Warrant are used for convenience only and are not considered in construing or interpreting this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>17.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Survival</font></u><font size=2>.  The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Warrant.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>18.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Stockholder Rights</font></u><font size=2>. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote such Warrant Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.  </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>[</font><i><font size=2>Balance left blank intentionally</font></i><font size=2>]</font></p>

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</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>IN WITNESS HEREOF, Pluristem Life Systems, Inc. has caused this Warrant to be executed by its officers thereunto duly authorized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated: April 1, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.87in; text-indent:0.49in;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="294" style=' margin-left:170.25pt;border-collapse:collapse'>
    <tr>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="227" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>__________________________</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="54" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="54" ></td>

        <td width="8" ></td>

        <td width="5" ></td>

        <td width="227" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>AGREED AND ACCEPTED BY:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="214" style=' border-collapse:collapse'>
    <tr>
        <td width="189" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>[</font></p> </td>
        <td width="25" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>]</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="371" style=' border-collapse:collapse'>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="324" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>_____________________________ (signature)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="63" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td> </tr>
    <tr >
        <td width="55" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td  width="8">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Address:  ___________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Fax: _______________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>NOTICE OF EXERCISE</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>To: Pluristem Life Systems, Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>NOTICE OF EXERCISE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The undersigned hereby elects to purchase __________ shares of the Common Stock of Pluristem Life Systems, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>(Name)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Address)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for the account of the undersigned and not as an agent or nominee for any other party, and for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Securities Act of 1933, as amended, any state securities laws or any applicable securities laws of foreign jurisdictions or any rules or regulations promulgated thereunder.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Signature)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Date)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>ex10-8fsb2.htm
<DESCRIPTION>EXHIBIT 10.8
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>COMMON STOCK AND WARRANT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>PURCHASE AGREEMENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Common Stock and Warrant Purchase Agreement</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:left;'><font size=2>This Common Stock and Warrant Purchase Agreement (this "</font><b><font size=2>Agreement</font></b><font size=2>"), dated as of January 24, 2005, between PLURISTEM LIFE SYSTEMS INC., a Nevada corporation (the "</font><b><font size=2>Company</font></b><font size=2>"), and the investors listed on </font><u><b><font size=2>Schedule A</font></b></u><font size=2> hereto, each of which is referred to herein as an &#147;</font><b><font size=2>Investor</font></b><font size=2>&#148; and collectively as &#147;</font><b><font size=2>Investors</font></b><font size=2>&#148;.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font SIZE=2>THE PARTIES HEREBY AGREE AS FOLLOWS:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="305" style=' margin-left:.25in;border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1.  </font></p> </td>
        <td width="281" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Purchase and Sale of Stock and Warrant.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>1.1  </font><u><font size=2>Sale and Issuance of Common Stock and Warrant</font></u><font size=2>. Subject to the terms and conditions of this Agreement, the Investor agrees to purchase at the Closing (as defined below) pursuant to Section 1.2, and the Company agrees to sell and issue to each Investor at  the Closing pursuant to Section 1.2, (i) a Common Stock (as defined below) purchase warrant in the form  attached hereto as </font><u><b><font size=2>Exhibit A</font></b></u><font size=2> (each a  "</font><b><font size=2>Warrant</font></b><font size=2>" and collectively the &#147;</font><b><font size=2>Warrants</font></b><font size=2>&#148;) for the purchase of a number of shares of Common Stock as specified next to such investor&#146;s name in Schedule A hereto, at a purchase price per share of $0.30, and (ii) the  shares (the "</font><b><font size=2>Shares</font></b><font size=2>") of
common stock, par value $0.00001 per share, of the Company (the  &#147;Common Stock"), at a purchase price per share of $0.10 and for an aggregate purchase price with respect to each Investor as specified next to such investor&#146;s name in Schedule A hereto, payable in cash, wire transfer in immediately available funds  and promissory notes, as specified in Section 1.2 herein below (the "</font><b><font size=2>Purchase Price</font></b><font size=2>").</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Closing</font></u><font size=2>. Subject to the terms and conditions of this Agreement, the purchase and sale of the Common Stock and Warrants shall take place at a closing (the "</font><b><font size=2>Closing</font></b><font size=2>") to be held at the offices of Clark, Wilson, on or before 10:00 A.M. Pacific time, on January 27, 2005, or at such other time and place as the Company and the Investors (who shall be represented for this matter by Mr. (the &#147;</font><b><font size=2>Investors Representative</font></b><font size=2>&#148;) mutually agree upon in writing. The Closing may take place in tranches, with the Company accepting subscriptions for Shares from investors who have delivered their funds and this Agreement. Unless the context requires otherwise, &#147;Closing&#148; shall refer to the closing of
the first purchase and sale of Shares and Warrants pursuant to this form of Agreement. At the Closing, the Company shall deliver to the Escrow Agent as named in the Escrow Agreement attached as </font><u><b><font size=2>Exhibit D</font></b></u><font size=2> to this Agreement (the &#147;Escrow Agreement&#148;): (i) a certificate representing the Common Stock that the Investor is purchasing pursuant to the terms hereof delivered to the Investor; (ii) an executed Warrant exercisable by each Investor for a number of shares equal to the Shares purchased by such Investor; (iii) a receipt for the Purchase Price actually received; and (iv) the other documents listed in Section 4 of this Agreement. At the Closing, each Investor shall deliver to the Company: (i) the Purchase Price due by such Investor by wire transfer in immediately available funds to a bank account to be designated by the Company in writing to the Investors; and (ii) the other documents listed in Section 5 of this
Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="358" style=' margin-left:.25in;border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.  </font></p> </td>
        <td width="334" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Representations and Warranties of the Company.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The Company hereby represents and warrants to the Investor that, except as set forth on a Schedule of Exceptions (the "</font><b><font size=2>Schedule of Exceptions</font></b><font size=2>") furnished to the Investors on or prior to entering into this Agreement, which exceptions shall qualify the representation and warranty that has the corresponding number as the numbered paragraph in the Schedule of Exceptions, and which representations and warranties so qualified shall be deemed to be representations and warranties as if made hereunder, as of the date hereof and as of the date of Closing:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.1  </font><u><font size=2>Organization and Qualification; Subsidiaries</font></u><font size=2>. (a) Each of the Company and each subsidiary of the Company (each a "</font><b><font size=2>Subsidiary</font></b><font size=2>") is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite corporate power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, have a Material Adverse Effect (as defined below). Each of the Company and each Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, have a Material Adverse Effect. "</font><b><font size=2>Material Adverse Effect</font></b><font size=2>" means any event, circumstance, change or effect that, individually or in the aggregate with all other events, circumstances, changes and effects, is or is reasonably likely to be materially adverse to the business, condition (financial or otherwise), assets, liabilities or results of operations of the Company and the Subsidiaries taken as a whole.   (b)  A true and complete list of all the </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Subsidiaries, together with the jurisdiction of incorporation of each Subsidiary, is set forth in Section 2.1(b) of the Schedule of Exceptions. Each Subsidiary is a wholly-owned subsidiary of the Company. Except as disclosed in Section 2.1(b) of the Schedule of Exceptions, the Company does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.2  </font><u><font size=2>Certificate of Incorporation and By-laws</font></u><font size=2>. The Company has heretofore made available to the Investors a complete and correct copy of the Articles of Incorporation and the By-laws, each as amended to date, of the Company. Such Articles of Incorporation and By-laws are in full force and effect. The Company is not in violation of any of the provisions of its Certificate of Incorporation or By-laws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.3  </font><u><font size=2>Capitalization</font></u><font size=2>.    (a) The authorized capital stock of the Company consists of (i) one billion four hundred million shares of Common Stock, par value $0.00001 per share. As of January&nbsp;21, 2005, (i) 26,858,483 shares of Common Stock are issued and outstanding, all of which are validly issued, fully paid and non-assessable, (ii) no shares of Common Stock are held in the treasury of the Company, (iii) no shares of Common Stock are held by the Subsidiaries, and (iv) 3,883,820 shares of Common Stock are reserved for future issuance pursuant to outstanding employee stock options or stock incentive rights granted pursuant to the Company's 2003 Employee Option Plan and our 2005 Option Plan, (collectively, the "</font><b><font size=2>Plans</font></b><font size=2>"). As of the date of this Agreement, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>no shares of Company Preferred Stock are issued and outstanding. There are warrants outstanding pursuant to several private placements and otherwise. All shares of Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and non-assessable. There are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares of Common Stock or any capital stock of any Subsidiary or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other person, except pursuant to the Plans and outstanding Warrant Certificates. All outstanding shares of Common Stock, all outstanding stock options to purchase Common Stock, and all outstanding shares of
capital stock of each subsidiary of the Company have been issued and granted in compliance with (i) all applicable U.S. securities laws, (ii) all applicable non-U.S. securities laws, (iii) all other applicable Laws (as defined below) and (iv) all requirements set forth in applicable contracts. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (b) Each outstanding share of capital stock of each Subsidiary is duly authorized, validly issued, fully paid and non-assessable, and each such share is owned by the Company or another Subsidiary free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company's or any Subsidiary's voting rights, charges and other encumbrances of any nature whatsoever. The Company has granted registration rights to certain private placees pursuant to agreements similar to Exhibit B, and further registration rights to certain employees or consultants of the Company for shares to be issued.  Except as set forth above and in the documents of the Company filed with the SEC, there are no registration rights or preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements, calls, commitments or rights of any kind which obligate Company or any of its Subsidiaries to register, issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire from the Company or any of its Subsidiaries, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are issued or outstanding.  The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.4  </font><u><font size=2>Authority</font></u><font size=2>. The Company has all necessary corporate power and authority to execute and deliver this Agreement, the Investors&#146; Rights Agreement in the form attached hereto as </font><u><b><font size=2>Exhibit B</font></b></u><font size=2> (the "</font><b><font size=2>Investors&#146; Rights Agreement</font></b><font size=2>"), the Warrant, (the Investors&#146; Rights Agreement and the Warrant are collectively referred to as the "</font><b><font size=2>Transaction Agreements</font></b><font size=2>"), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby or thereby. The execution and delivery of this Agreement and the Transaction Agreements by the Company and the consummation by the Company of the transactions contemplated hereby or thereby have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement and the Transaction Agreements or to consummate the transactions contemplated hereby or thereby. Each of this Agreement and the Transaction Agreements has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>terms subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors' rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity). The Company Board of Directors (the "</font><b><font size=2>Board</font></b><font size=2>") has approved this Agreement, the Transaction Agreements and the transactions contemplated hereby or thereby and such approvals are sufficient so that the restrictions on business combinations set forth in the Nevada Corporations Code and no other &#147;fair price,&#148; &#147;moratorium,&#148; &#147;control share acquisition&#148; or other similar anti-takeover statute or regulation, (and any similar provisions, each a &#147;</font><b><font size=2>Takeover
Statute</font></b><font size=2>&#148;), and no anti-takeover provision in the amended certificate of incorporation or by-laws of the Company shall not apply to any of the transactions contemplated hereby or thereby, including, but not limited to, any exercise of the Warrant or actions permitted pursuant to the Investors&#146; Rights Agreement. The Company warrants and agrees to carry out its obligations as set out in the Investor Rights Agreement. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.5 </font><u><font size=2>No Conflict; Required Filings and Consents</font></u><font size=2>. (a) The execution and delivery of this Agreement and the Transaction Agreements by the Company do not, and the performance of this Agreement and the Transaction Agreements by the Company will not, (i) conflict with or violate the Certificate of Incorporation or By-laws of the Company, (ii) conflict with or violate any United States or other statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order ("</font><b><font size=2>Law</font></b><font size=2>") applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of the Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, have a Material Adverse Effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.67in;text-align:left;'><font size=2> (b) The execution and delivery of this Agreement and the Transaction Agreements by the Company do not, and the performance of this Agreement and the Transaction Agreements by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any foreign, United States federal, state, county or local or non-United States government, governmental, regulatory or administrative authority, agency, instrumentality or commission (including any stock exchange or inter-dealer quotation system)  or any court, tribunal, or judicial or arbitral body (a "</font><b><font size=2>Governmental Authority</font></b><font size=2>"), other than any filings necessary to comply with federal and state securities or "blue sky" laws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.6 </font><u><font size=2>Permits; Compliance</font></u><font size=2>. Each of the Company and the Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for each of the Company or the Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted (the "</font><b><font size=2>Company Permits</font></b><font size=2>"), except where the failure to have, or the suspension or cancellation of, any of the Company Permits would not, individually or in the aggregate, have a Material Adverse Effect. No suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, threatened, except where the failure to </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>have, or the suspension or cancellation of, any of the Company Permits would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary is in conflict with, or in default, breach or violation of, (a) any Law applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected, or (b) any note, bond, mortgage, indenture, contract, agreement, lease, license, Company Permit, franchise or other instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any property or asset of the Company or any Subsidiary is bound, except for any such conflicts, defaults, breaches or violations that would not, individually or in the aggregate, have a Material Adverse Effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.7 </font><u><font size=2>SEC Filings; Financial Statements</font></u><font size=2>. (a) The Company has filed all forms, reports and documents required to be filed by it with the Securities and Exchange Commission (the "</font><b><font SIZE=2>SEC</font></b><font size=2>") since September, 2001, and has heretofore made available to the Investors, in the form filed with the SEC, (i) its Annual Reports on Form 10-K for the fiscal years ended June 30, 2004, 2003, and 2002, respectively, and (ii) all other forms, reports and other registration statements filed by the Company with the SEC since January 1, 2003 (the forms, reports and other documents referred to in clauses (i), (ii), (iii) and (iv) above being, collectively, the "</font><b><font size=2>Company SEC Reports</font></b><font size=2>"). The Company SEC Reports (i) were prepared in accordance with either the requirements of the
Securities Act of 1933, as amended (the "</font><b><font size=2>Securities Act</font></b><font size=2>"), or the Securities Exchange Act of 1934, as amended (the "</font><b><font size=2>Exchange Act</font></b><font size=2>"), as the case may be, and the rules and regulations promulgated thereunder existing at the time the Company SEC Reports were filed, and (ii) did not, at the time they were filed, or, if amended, as of the date of such amendment, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary is required to file any form, report or other document with the SEC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.67in;text-align:left;'><font size=2> (b) Each of the consolidated financial statements (including, in each case, any notes thereto) contained in the Company SEC Reports was prepared in accordance with United States generally accepted accounting principles ("</font><b><font SIZE=2>GAAP</font></b><font size=2>") applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of the Company and its consolidated Subsidiaries as at the respective dates thereof and for the respective periods indicated therein , except as otherwise noted therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments which would not have had, and would not have,
individually or in the aggregate, a Material Adverse Effect) and for pro forma financial information disclosed therein.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.67in;text-align:left;'><font size=2> (c) Except as and to the extent set forth on the consolidated balance sheet of the Company and the consolidated Subsidiaries as at June 30, 2004, including the notes thereto, neither the Company nor any Subsidiary has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except for liabilities and obligations, incurred in the ordinary course of business consistent with past practice since that date.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.67in;text-align:left;'><font size=2> (d) The Company has heretofore furnished or made available to the Investors complete and correct copies of all amendments and modifications that have not been filed by the Company </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>with the SEC to all agreements, documents and other instruments that previously had been filed by the Company with the SEC and are currently in effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.8  </font><u><font size=2>Absence of Certain Changes or Events</font></u><font size=2>. Since June 30, 2004, except as set  forth in Section 2.8 of the Schedule of Exceptions, or as expressly contemplated by this Agreement, or specifically disclosed in any Company SEC Report filed since such date and prior to the date of this Agreement, (a) the Company and the Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice; (b) there has not been any Material Adverse Effect (c) any declaration, setting aside or payment of any dividend or other distribution in cash, stock or property in respect of Company&#146;s capital stock except as expressly permitted by this Agreement; (d) any split in Company&#146;s capital stock, or any combination, subdivision or reclassification of any of Company&#146;s capital stock or issuance or
authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company&#146;s capital stock, except as expressly contemplated by this Agreement; or (e) any change by it in accounting principles, practices or methods except as required by changes in GAAP .</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.9  </font><u><font size=2>Absence of Litigation</font></u><font size=2>. Except as specifically disclosed in the Company SEC Reports filed prior to the date of this Agreement, there is no litigation, suit, claim, action, proceeding or investigation (an "</font><b><font size=2>Action</font></b><font size=2>") pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary, or any property or asset of the Company or any Subsidiary, before any Governmental Authority that, individually or in the aggregate, has had or would have a Material Adverse Effect. Neither the Company nor any Subsidiary nor any material property or asset of the Company or any Subsidiary is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the knowledge of the Company, continuing investigation by, any Governmental
Authority, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority that would, individually or in the aggregate, have a Material Adverse Effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.10 </font><u><font size=2>Valid Issuance of Common Stock</font></u><font size=2>. The Common Stock that is being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly authorized, validly issued, fully paid and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements and under applicable state and federal securities laws. The shares of Common Stock issuable upon exercise of the Warrant have been duly and validly reserved for issuance and, upon issuance, will be duly authorized, validly issued, fully paid and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Transaction Agreements and under applicable state and federal securities laws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.11 </font><u><font size=2>Intellectual Property Rights</font></u><font size=2>. Except as disclosed in the Company SEC Reports, each of the Company and the Subsidiaries has sufficient title, right of  use and/or ownership, free and clear of all liens, claims or restrictions, of  all patents, patent rights, trademark rights, service mark rights, trade name rights, copyright rights, trade secrets, customer lists, information, proprietary rights, know-how, designs, computer programs, technical data, inventions and processes and other intellectual property or proprietary rights (collectively, the &#147;</font><b><font size=2>Intellectual Property</font></b><font size=2>&#148;) necessary for its business as now conducted and as proposed to be conducted (including the development, operation and sale of all products sold by it) without any conflict with or infringement of, or </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>otherwise acting adversely to the rights or claimed rights of others (including without limitation, employees or former employees). Schedule 2.11 of the Schedule of Exceptions contains a complete list of patents and pending patent applications, trademarks, trademark applications, service marks, service mark applications, copyrights, copyright applications, licenses, trade names and similar rights of the Company and the Subsidiaries.  No procedures have been commenced in any jurisdiction, nor to the Company&#146;s or any Subsidiary&#146;s knowledge, have been threatened, which would result in the cancellation of any issued patent, trademark or service-mark or materially and adversely affect the Intellectual Property.  Except as listed in Schedule 2.11 of  the Schedule of Exception there are no outstanding options, licenses, claims, encumbrances, shared ownership or interest of any kind or agreements of any kind
relating to the Intellectual Property, nor is the Company or Subsidiary bound by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property of any other person or entity.  Neither the Company nor Subsidiary have reason to believe, or have received any communications alleging that the Company or the Subsidiary have violated or, by conducting its business as proposed, would violate any of the Intellectual Property rights of any other person or entity. The Company and the Subsidiary and any of their respective directors or officers are not aware of any infringement of or conflict with asserted rights of others, with respect to any of Company&#145;s or Subsidiary&#146;s Intellectual Property and proprietary rights, or of any facts, or assertion of any facts, which could reasonably be expected to render any of Company&#146;s or Subsidiary&#146;s intellectual property or proprietary rights invalid or unenforceable. There is no Intellectual
Property owned, authored, claimed or licensed  by any third party which is used or is expected to be used by the Company or any Subsidiary to conduct its business that requires the payment of royalties, compensation, fees or otherwise to a third party. The Company and the Subsidiaries are not aware that any of the Company or its Subsidiaries&#146; employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Company or the applicable Subsidiary or that would conflict with the Company&#146;s or the Subsidiary&#146;s business as proposed to be conducted.  Neither the execution nor delivery of this Agreement or the Transaction Agreements, nor the carrying on of the Company&#146;s business by the employees of the Company, nor the carrying on any
Subsidiary&#146;s business by the employees of such Subsidiary, nor the conduct of the Company&#146;s or the Subsidiary&#146;s business as proposed, will, to the Company&#146;s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated.  The Company and the Subsidiaries do not believe it is or will be necessary to utilize any inventions of any of its or any Subsidiary&#146;s employees (or people it or a Subsidiary currently intends to hire) made prior to or outside the scope of their employment by the Company or the Subsidiary. The Company has taken reasonable security measures, including measures against unauthorized disclosure, to protect the secrecy, confidentiality and value of its and any Subsidiary&#146;s Intellectual Property and each of the Company&#146;s officers and employees and Subsidiary&#146;s employees that has access to
the Company&#146;s or a Subsidiary&#146;s material Intellectual Property has entered into a non-competition agreement with the Company or the Subsidiary.  At no time in the course of the conception of or reduction into writing of any of the Company&#146;s or a Subsidiary&#146;s Intellectual Property, was any developer, inventor or other contributor to such intellectual property operating under any grants from any governmental entity or agency or private source, or subject to any employment agreement, or invention assignment or nondisclosure agreement, or other obligation with any third party that could adversely affect or limit any </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>intellectual property owned by or licensed to the Company or a Subsidiary, or which the Company or a Subsidiary otherwise has the right to use.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.13 </font><u><font size=2>Disclosure</font></u><font size=2>. (a) The Company is not aware of any facts pertaining to the Company or its Subsidiaries which could have a Material Adverse Effect and which have not been disclosed in this Agreement, the Schedule of Exceptions or the Company SEC Reports filed prior to the date hereof or otherwise disclosed to the Investor by the Company in writing, except that the Company has depleted most of its cash and will be unable to continue operations without raising additional cash.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (b) No representation or warranty of the Company in this Agreement or the Transaction Agreements, nor any statement or certificate furnished or to be furnished to the Investors pursuant to the Transaction Agreements, when taken in conjunction with all the information provided or made available by the Company to the Investors in connection with the transactions contemplated by this Agreement, taken as a whole, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>2.15 </font><u><font size=2>Agreements, Contracts and Commitments</font></u><font size=2>. Except as identified in the Schedule of Exceptions, during the past 12 months, neither the Company nor any of its Subsidiaries has breached, violated or defaulted under, or received notice that it has breached, violated or defaulted under, nor is a breach, violation, or default continuing under, any Material Contract (as defined below) to which the Company or any Subsidiary is a party or by which its is bound. "</font><b><font size=2>Material Contract</font></b><font size=2>" means:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (a) any agreement, contract or commitment containing any covenant limiting the freedom of the Company or any of its Subsidiaries to engage in any material line of business or compete with any person in any material line of business; or</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (b) any "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Company and its Subsidiaries.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.54in;text-align:left;'><font size=2>2.16 </font><u><font size=2>Taxes</font></u><font size=2>.  For purposes of this Agreement, the following terms have the following definitions: &#147;</font><b><font size=2>Returns</font></b><font size=2>&#148; means returns, declarations, statements, reports, forms or other documents or information required to be filed with or supplied to any governmental entity having jurisdiction over the assessment, determination, collection or other imposition of any Tax. &#147;</font><b><font size=2>Tax</font></b><font size=2>&#148; or &#147;</font><b><font size=2>Taxes</font></b><font size=2>&#148; means all taxes (whether federal, state, local or foreign) based upon or measured by income and any other tax whatsoever, including gross receipts, profits, windfall profits, sales, use, occupation, value added, </font><i><font size=2>ad valorem, </font></i><font size=2>transfer, franchise, withholding,
payroll, employment, excise, stamp, premium, capital stock, production, business and occupation, disability, severance, or real or personal property taxes, fees, or assessments of any kind whatsoever imposed by any Governmental Authority, together with any interest or penalties imposed with respect thereto. The &#147;</font><b><font size=2>Code</font></b><font size=2>&#148; shall mean the Internal Revenue Code of 1986, as amended.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>Except to the extent that any breach, failure or inaccuracy is not reasonably likely to have a Material Adverse Effect on the Company:  (i) all Returns required to be filed by or with respect to the Company or one of its Subsidiaries with respect to any taxable period ending on or prior to the Closing have been duly filed which showed that the Company owed Taxes and all such Returns are </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>9</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>complete and accurate and (ii) all Taxes shown to be due on the Returns referred to in clause (i) have been paid in full.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>2.17 </font><u><font size=2>Employee Matters</font></u><font size=2>. Section 2.17 of the Schedule of Exceptions sets forth an accurate list of any material compensation or benefit plan or agreement (including any employee benefit plan, program, policy, agreement or contract providing benefits to any current or former employee, officer or director of it or any of its Subsidiaries or any beneficiary or dependent thereof that is sponsored or maintained by it or any of its Subsidiaries or to which it or any of its Subsidiaries contributes or is obligated to contribute (other than government-based plans), including any &#147;employee welfare benefit plan&#148; within the meaning of Section 3(1) of ERISA, any &#147;employee pension benefit plan&#148; within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA), all employment or severance agreements, and any bonus,
incentive, deferred compensation, vacation, stock purchase, stock option, severance, change of control or fringe benefit plans, programs or policies (any of the foregoing a &#147;</font><b><font size=2>Benefit Plan</font></b><font size=2>&#148;) of the Company and its Subsidiaries.  There do not now exist, and to the Company&#146;s knowledge, there are no existing circumstances that could reasonably be expected to result in, any liabilities (a) under Title IV of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder (&#147;</font><b><font SIZE=2>ERISA</font></b><font size=2>&#148;),  (b) under Section 302 of ERISA, (c) under Sections 412 and 4971 of the Code, (d) for violation of the continuation coverage requirements of Section 601 </font><i><font size=2>et seq</font></i><font size=2>. of ERISA and Section 4980B of the Code or the group health requirements of Sections 9801 </font><i><font size=2>et seq</font></i><font
size=2>. of the Code and Sections 701 </font><i><font size=2>et seq</font></i><font size=2>. of ERISA, and (e) under corresponding or similar provisions of foreign laws or regulations (any such liability a &#147;</font><b><font size=2>Controlled Group Liability</font></b><font size=2>&#148;) to the Company or any of its Subsidiaries except for those that, individually or in the aggregate, would not be reasonably likely to have a Material Adverse Effect on the Company.  No Benefit Plan maintained or contributed to by the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is required to contribute (any such plan a &#147;</font><b><font size=2>Company&#146;s Benefit Plan</font></b><font size=2>&#148;) is a &#147;multiemployer plan&#148; within the meaning of Section 4001(a)(3) of ERISA.  </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>Except as is not reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on the Company, (A) each of the Company&#146;s Benefit Plans has been operated and administered in all material respects in accordance with applicable Law and administrative rules and regulations of any Governmental Authority, including, but not limited to, ERISA and the Code, and (B) there are no pending or threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, against the Company&#146;s Benefit Plans, any fiduciaries thereof with respect to their duties to the Company&#146;s Benefit Plans or the assets of any of the trusts under any of the Company&#146;s Benefit Plans that could reasonably be expected to result in any material liability of the Company or any of its Subsidiaries to the Pension Benefit Guaranty Corporation,
the U.S. Department of the Treasury, the U.S. Department of Labor or any similar non-U.S. Governmental Entities, any Company&#146;s Benefit Plan, any participant in a the Company&#146;s Benefit Plan, or any other party.  </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>As of the date hereof, neither the Company nor any of its Subsidiaries is a party to any material collective bargaining or other labor union contract applicable to individuals employed by the Company&#146; or any of its Subsidiaries, and no such collective bargaining agreement or other labor union contract is being negotiated by the Company or any of its Subsidiaries.  Except as is not reasonably likely to have a Material Adverse Effect on the Company, (A) there is no labor dispute, strike, slowdown or work stoppage against the Company or any of its Subsidiaries pending or, to </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>10</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>the Company&#146;s knowledge, threatened against the Company or any of its Subsidiaries and (B)&nbsp;no unfair labor practice or labor charge or complaint has occurred with respect to the Company or any of its Subsidiaries.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="348" style=' margin-left:.25in;border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.  </font></p> </td>
        <td width="324" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Representations and Warranties of the Investor.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Each Investor hereby represents and warrants solely with respect to himself, herself or itself, as applicable that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.1  </font><u><font size=2>Organization and Qualification</font></u><font size=2>. If the Investor is a corporation, it is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.2  </font><u><font size=2>Authority Relative to This Agreement</font></u><font size=2>. The Investor has all necessary corporate power and authority to execute and deliver this Agreement and the Transaction Agreements, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby or thereby. The execution and delivery of this Agreement and the Transaction Agreements by the Investor and the consummation by the Investor of the transactions contemplated hereby or thereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Investor are necessary to authorize this Agreement and the Transaction Agreements or to consummate the transactions contemplated hereby or thereby. Each of this Agreement and the Transaction Agreements has been duly and validly executed and delivered by
the Investor and, assuming the due authorization, execution and delivery by the Investor, constitutes a Agreements, upon execution and delivery by the Company will constitute) legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors' rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.3  </font><u><font size=2>No Conflict; Required Filings and Consents</font></u><font size=2>. (a) The execution and delivery of this Agreement and the Transaction Agreements by the Investor do not, and the performance of this Agreement and the Transaction Agreements by the Investor will not, (i) conflict with or violate the organizational documents of the Investor or (ii) conflict with or violate any Law applicable to the Investor.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.71in;text-align:left;'><font size=2> (b) The execution and delivery of this Agreement and the Transaction Agreements by the Company do not, and the performance of this Agreement and the Transaction Agreements by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.4  </font><u><font size=2>Brokerage</font></u><font size=2>. Except as provided in Section 6.12 herein, there are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by this Agreement and the Transaction Agreements for which the Investor will have any liability or responsibility based on any arrangement or agreement binding upon the Investor or any of its subsidiaries.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>11</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.5  </font><u><font size=2>Purchase Entirely for Own Account</font></u><font size=2>. This Agreement is made with the Investor in reliance upon the Investor's representation to the Company, which by the Investor's execution of this Agreement the Investor hereby confirms, that the Investor is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act, that the Common Stock and Warrant to be received by the Investor (collectively, the "</font><b><font size=2>Securities</font></b><font size=2>") will be acquired for investment for the Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same other than in a transaction registered under the Securities Act or exempt from,
or not subject to, such registration. By executing this Agreement, the Investor further represents that the Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.6  </font><u><font size=2>Disclosure of Information</font></u><font size=2>. The Investor has been afforded access to such information as it has requested regarding the Company and its Subsidiaries and their respective financial condition, operating results, properties, liabilities, operations and management. The Investor has reviewed all documents filed by the Company with the SEC and which are filed on the EDGAR website. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.7  </font><u><font size=2>Restricted Securities</font></u><font size=2>. The Investor understands that the Securities it is purchasing are characterized as "restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144 under the Securities Act, as presently in effect ("</font><b><font size=2>Rule 144</font></b><font size=2>"), and understands the resale limitations imposed thereby and by the Securities Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>3.8  </font><u><font size=2>Legends</font></u><font size=2>. It is understood that the certificates evidencing the Securities may bear one or all of the following legend(s):</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.47in;text-align:left;'><font size=2>"These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such Act."</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.47in;text-align:left;'><font size=2>"The shares represented hereby are subject to certain restrictions under the terms of the Investor Rights Agreement, dated January 24, 2005, as amended from time to time, between the issuer and the holder hereof and may not be offered, sold, transferred or otherwise disposed of except in accordance with the terms of that agreement."</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.9</font></p> </td>
        <td width="75" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Omitted</font></u><font size=2>.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.12in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.12in; text-indent:0.33in;text-align:left;'><font size=2>3.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is not a "U.S. Person" as defined in Regulation S promulgated under the Securities Act (&#147;</font><b><font size=2>Regulation S</font></b><font size=2>&#148;):</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.12in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>12</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2.08in;text-align:justify;'><font size=2> (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor was not organized under the laws of any United States jurisdiction, was not formed for the purpose of investing in securities not registered under the Securities Act and is not acquiring the Shares for the account or benefit of any US Person;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time the buy order for this transaction was originated, the Investor was outside the United States;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All subsequent offers and sales of the Shares will be made (A) outside the United States in compliance with the provisions of Regulation S (including Rule 901 through Rule 905 and the Preliminary Notes thereto) (B) pursuant to registration of the Shares under the Securities Act, or (C) pursuant to an exemption from such registration.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor agrees not to engage in hedging transactions with regards to such Shares unless with compliance to the Securities Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The certificates representing the Shares shall be stamped or otherwise imprinted with the Legend set forth in Section 3.8 to this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall not register any transfer of the Shares not made in accordance with Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>3.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is a U.S. Person, the Investor is an Accredited Investor as defined by Regulation D Rule 501 and has signed and delivered to the Company an Accredited Investor Questionnaire in the form attached hereto as </font><u><b><font size=2>Exhibit C</font></b></u><font size=2>. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>3.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is not a U.S. Person nor a resident of Israel, the Investor warrants and represents that the issuance of the Common Stock and Warrants to the Investor is exempt from the prospectus and registration requirements of the laws of the jurisdiction of residence of the Investor and that the Company is not required to make any filings or take other steps in such jurisdiction to validly and lawfully issue the securities contemplated by this Agreement to the Investor. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.  </font></p> </td>
        <td width="408" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Conditions of the Investors Obligation to Affect the Closing.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The obligations of the Investors to consummate the transactions contemplated hereby are subject to the fulfillment or waiver (where permissible) on or before the Closing of each of the following conditions:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.1  </font><u><font size=2>Representations and Warranties</font></u><font size=2>. The representations and warranties of the Company contained in Section 2 shall be true and correct as of the date hereof and as of the date of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.2  </font><u><font size=2>Performance</font></u><font size=2>. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>13</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.3  </font><u><font size=2>Compliance Certificate</font></u><font size=2>. The President of the Company shall have delivered to the Investor at the Closing a certificate stating that the conditions specified in Sections 4.1 and 4.2 have been fulfilled. In addition, the Compliance Certificate shall state the number of shares of the outstanding Common Stock of the Company immediately prior to the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.4  </font><u><font size=2>Incumbency Certificate</font></u><font size=2>. The certificate of the Secretary of the Company certifying the names and signatures of the officers of the Company authorized to sign this Agreement and the other Transaction Agreements and all other documents to be delivered hereunder and thereunder.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.5  </font><u><font size=2>Qualifications</font></u><font size=2>. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall have been duly obtained and effective as of the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.6  </font><u><font size=2>Proceedings and Documents</font></u><font size=2>. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents incident to the Closing shall be reasonably satisfactory in form and substance to the Investors counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.7  </font><u><font size=2>Investors&#146; Rights Agreement</font></u><font size=2>. The Company shall have executed and delivered to the Investor a counterpart to the Investors&#146; Rights Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.8  </font><u><font size=2>Warrant</font></u><font size=2>. The Company shall have executed and delivered to each Investor the applicable Warrant.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.9 </font><u><font size=2>Takeover Statute</font></u><font size=2>. The Company shall take all necessary steps such  that no Takeover Statute, and no anti-takeover provision in the amended certificate of incorporation or by-laws of the Company is, or will be, applicable to the transactions contemplated by this Agreement and the Transactions Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>4.10 </font><u><font size=2>No Material Adverse Effect</font></u><font size=2>. No event or events shall have occurred, or be reasonably likely to occur, which individually or in the aggregate, have or could have, a Material Adverse Effect.
</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="447" style=' margin-left:.25in;border-collapse:collapse'>
    <tr>
        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.  </font></p> </td>
        <td width="423" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Conditions of the Company&#146;s Obligation to Affect the Closing.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>The obligations of the Company to consummate the transactions contemplated hereby are subject to the fulfillment or waiver (where permissible) on or before the Closing of each of the following conditions, with respect to each Investor severally and not jointly:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>5.1  </font><u><font size=2>Representations and Warranties</font></u><font size=2>. The representations and warranties of the Investors contained in Section 3 shall be true and correct as of the date hereof and as of the date of Closing with the same effect as though such representations and warranties had been made on and as of the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>14</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>5.2 </font><u><font size=2>Performance</font></u><font size=2>. The Investors shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>5.3 </font><u><font size=2>Proceedings and Documents</font></u><font size=2>. All corporate and other proceedings in connection with the transactions contemplated at the hereby and all documents incident to the Closing shall be reasonably satisfactory in form and substance to the Company's counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>5.4 </font><u><font size=2>Investors&#146; Rights Agreement</font></u><font size=2>. The Investors shall have executed and delivered a counterpart to the Investors&#146; Rights Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="139" style=' margin-left:.25in;border-collapse:collapse'>
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        <td width="24" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6.  </font></p> </td>
        <td width="115" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Miscellaneous.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.1 </font><u><font size=2>Survival of Representations, Warranties and Other Agreements</font></u><font size=2>. The representations, warranties and other agreements of each of the Company and the Investors, respectively, included or provided for in the Transaction Agreements, shall survive the execution and delivery of this Agreement, the other Transaction Agreements and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Company or the Investors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.2 </font><u><font size=2>Successors and Assigns</font></u><font size=2>. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of, and be binding upon the respective successors and assigns of the parties (including transferees of any Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.3 </font><u><font size=2>Governing Law; Venue</font></u><font size=2>. This Agreement shall be governed by and construed under the laws of the State of Israel as applied to agreements executed in and to be performed entirely within Israel. In any event of dispute not amicably resolved within 10 days of the written notice of any party, the parties hereby irrevocably submit to the jurisdiction of the courts of Israel solely in respect of the interpretation and enforcement of the provisions of this Agreement and in respect of the transactions contemplated hereby and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement
may not be enforced in or by such courts, and the parties irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a court.  The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6.6 (Notices), or in such other manner as may be permitted by applicable law, shall be valid and sufficient service thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>15</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.4 </font><u><font size=2>Counterparts</font></u><font size=2>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts executed and delivered via any form of electronic transmission shall be deemed originals.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.5 </font><u><font size=2>Titles and Subtitles</font></u><font size=2>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.42in;text-align:left;'><font size=2>6.6  </font><u><font size=2>Notices</font></u><font size=2>. Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of any Investor, to the address of such Investor as set forth on the signature page hereto or such other address of such Investor as shall be designated in writing from time to time by such Investor.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of such facsimile.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.7  </font><u><font size=2>Expenses</font></u><font size=2>. Irrespective of whether any Closing is effected, the Company shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement or the Transaction Agreements, the prevailing party shall be entitled to reasonable attorney&#146;s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.8  </font><u><font size=2>Amendments and Waivers</font></u><font size=2>. Any term of this Agreement may be amended only in writing signed by, or on behalf of, the Company and the holders of a majority of the Common Stock issuable or issued upon conversion of the Shares. At any time prior to the Closing, any party hereto may (a) extend the time for the performance of any obligation or other act of any other party hereto, (b) waive any inaccuracy in the representations and warranties of any other party contained herein or in any document delivered pursuant hereto and (c) waive compliance with any agreement of any other party or any condition to its own obligations contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of
any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any party to assert any of its rights shall not constitute a waiver of any of such rights.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.9  </font><u><font size=2>Severability</font></u><font size=2>. If any term or provision of this Agreement is held to be unenforceable under applicable Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>16</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.10 </font><u><font size=2>Publicity</font></u><font size=2>. Except as may be required by the Company pursuant to its obligations as a reporting issuer, no party hereto shall issue any press release or otherwise make any statements to any third party with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other party, which consent shall not be unreasonably withheld, and the parties shall cooperate as to the timing and contents of any such press release or public announcement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.46in;text-align:left;'><font size=2>6.11 </font><u><font size=2>Entire Agreement</font></u><font size=2>. This Agreement and the other Transaction Agreements constitute the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>6.12  </font><u><font size=2>Finders&#146; Fees</font></u><font size=2>. The parties hereto acknowledge that various agents, brokers, investment bankers, persons or firms acting on behalf of or under the authority of all or part of the Investors or Company or its affiliates or subsidiaries are, or will be, or may become entitled to broker&#146;s or finder&#146;s fee or any other commission directly or indirectly in connection with the transactions contemplated herein.  The Company further agrees to pay or otherwise cover such fees up to an amount equal to 20% of the amount of the investment such fee is paid in connected with, plus issuance of Warrants for a number of shares equal to 5% of the number of shares subject to the Warrant issued to the Investor such fee is paid in connection with (and in the aggregate up to20% of the total investment plus 5% of the Warrants shares). </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>17</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>SIGNATURE PAGE </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PURCHASE AGREEMENT</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font size=2>Dated January 24, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="493" style=' margin-left:127.5pt;border-collapse:collapse'>
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        <td width="493" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>IF the PURCHASER is an INDIVIDUAL, please complete the following:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>IN WITNESS WHEREOF, the undersigned has executed this Agreement this _____day of January, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Amount of Subscription:</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font>                                                                                        <u><font size=2> </font></u></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>___________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Print Name</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Number of Shares to be Purchased:</font></p>
<p style='margin-left:0pt;text-indent:228.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><br> <font size=2>___________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Signature of Investor</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>___________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Address and Fax Number</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>including State of residence</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>___________________________________</font><br> <font size=2>E-mail Address</font></p> </td> </tr>
    <tr>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>ACCEPTED AND AGREED:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="43" style=' margin-left:263.25pt;border-collapse:collapse'>
    <tr>
        <td width="43" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Dated:</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>18</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>SIGNATURE PAGE</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PURCHASE AGREEMENT</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font size=2>Dated January 24, 2005 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.92in;text-align:right;'><font size=2>IF the PURCHASER is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY, TRUST or OTHER ENTITY, please complete the following:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>IN WITNESS WHEREOF, the undersigned has executed this Agreement this ______ day of January, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Number of Shares to be Purchased:</font></p>
<p style='margin-left:0pt;text-indent:228.75pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>___________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Print Full Legal Name of Partnership,</font><br> <font size=2>Company, Limited Liability Company, Trust or Other Entity</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>By: __________________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Authorized Signatory)</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Name: ________________________________</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Title: _________________________________</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Address  including State of residence and Fax Number: _____________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>___________________________________</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Taxpayer Identification Number: __________</font><u></u></p> </td> </tr>
    <tr >
        <td  width="163">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Date and State of Incorporation or Organization:</font></p> </td>
        <td  width="146">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="163">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Date on which Taxable Year Ends:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="163" ></td>

        <td width="156" ></td>

        <td width="88" ></td>

        <td width="86" ></td>

        <td width="146" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.31in;text-align:right;'><font size=2>E-mail Address: ________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>ACCEPTED AND AGREED:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="43" style=' margin-left:261.15pt;border-collapse:collapse'>
    <tr>
        <td width="43" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Name:_______________________________</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="55" style=' margin-left:261.15pt;border-collapse:collapse'>
    <tr>
        <td width="55" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><font size=2>Dated: </font><font size=1>&nbsp;</font><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><font SIZE=2>SCHEDULE OF EXCEPTIONS</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.1(b)  Pluristem, Inc., an Israel company</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="87" style=' margin-left:72.15pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.8</font></p> </td>
        <td width="39" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Nil</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Trademark on the word PluriX&#148; obtained June 22, 2003; and exclusive rights to the technology covered by International Application published under the Patent Cooperation Treaty publication number WO 00/46349 entitled &#147;Method and Apparatus for Maintenance and Expansion of Hematopoietic stem cells and/or Progenitor Cells&#148;. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.14 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registration Rights for 15,000,000 shares and 15,000,000 warrants pursuant to a private placement issued in January, 2005; Registration Rights for 3 million shares and 3,300,000 warrants from 2004, already registered on form SB-2; registration rights for the CEO&#146;s shares to be issued pursuant to a bonus for patent registration; and registration rights for the finder of this private placement who will get shares and warrants.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="91" style=' margin-left:72.15pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.15</font></p> </td>
        <td width="43" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Nil.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.17</font></p> </td>
        <td width="43" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Nil.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><font size=2>Exhibit C</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><u><b><font SIZE=2>ACCREDITED INVESTOR QUESTIONNAIRE</font></b></u></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><i><font SIZE=2>ONLY U.S. SUBSCRIBERS NEED TO SIGN THIS</font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>All capitalised terms herein, unless otherwise defined, have the meanings ascribed thereto in the Subscription Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>This Questionnaire is for use by each Subscriber who is a US person (as that term is defined Regulation S of the United States Securities Act of 1933 (the &#147;1933 Act&#148;)) and has indicated an interest in purchasing Shares of Pluristem Life Systems, Inc. (the &#147;Company&#148;).  The purpose of this Questionnaire is to assure the Company that each Subscriber will meet the standards imposed by the 1933 Act and the appropriate exemptions of applicable state securities laws.  The Company will rely on the information contained in this Questionnaire for the purposes of such determination.  The Shares will not be registered under the 1933 Act in reliance upon the exemption from registration afforded by Section 3(b) and/or Section 4(2) and Regulation D of the 1933 Act.  This Questionnaire is not an offer of the Shares or any other securities of the Company in any state other than those
specifically authorized by the Company.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>All information contained in this Questionnaire will be treated as confidential.  However, by signing and returning this Questionnaire, each Subscriber agrees that, if necessary, this Questionnaire may be presented to such parties as the Company deems appropriate to establish the availability, under the 1933 Act or applicable state securities law, of exemption from registration in connection with the sale of the Shares hereunder.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>The Subscriber covenants, represents and warrants to the Company that it satisfies one or more of the categories of &#147;Accredited Investors&#148;, as defined by Regulation D promulgated under the 1933 Act, as indicated below:  (Please initial in the space provide those categories, if any, of an &#147;Accredited Investor&#148; which the Subscriber satisfies)</font></p>


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    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 1</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of US&nbsp;$5,000,000;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in; text-indent:-0.88in;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 2</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A natural person whose individual net worth, or joint net worth with that person&#146;s spouse, on the date of purchase exceeds US&nbsp;$1,000,000;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 3</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A natural person who had an individual income in excess of US&nbsp;$200,000 in each of the two most recent years or joint income with that person&#146;s spouse in excess of US&nbsp;$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 4</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A &#147;bank&#148; as defined under Section&nbsp;(3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section&nbsp;3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2.5in;text-align:left;'><font size=2>Section&nbsp;15 of the </font><i><font size=2>Securities Exchange Act of 1934</font></i><font size=2> (United States); an insurance company as defined in Section&nbsp;2(13) of the 1933 Act; an investment company registered under the </font><i><font size=2>Investment Company Act of 1940</font></i><font size=2> (United States) or a business development company as defined in Section&nbsp;2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section&nbsp;301(c) or (d) of the </font><i><font size=2>Small Business Investment Act of 1958</font></i><font size=2> (United States); a plan with total assets in excess of $5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan
within the meaning of the </font><i><font size=2>Employee Retirement Income Security Act of 1974</font></i><font size=2> (United States) whose investment decisions are made by a plan fiduciary, as defined in Section&nbsp;3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors;</font></p>


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        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 5</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A private business development company as defined in Section&nbsp;202(a)(22) of the </font><i><font size=2>Investment Advisers Act of 1940</font></i><font size=2> (United States);</font></p> </td> </tr>
    <tr >
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 6</font></p> </td>
        <td width="325" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A director or executive officer of the Company;</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 7</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule&nbsp;506(b)(2)(ii) under the 1933 Act;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 8</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories;</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in; text-indent:1in;text-align:left;'><font size=2>Note that prospective Subscribers claiming to satisfy one of the above categories of Accredited Investor may be required to supply the Company with a balance sheet, prior years&#146; federal income tax returns or other appropriate documentation to verify and substantiate the Subscriber&#146;s status as an Accredited Investor.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>If the Subscriber is an entity which initialled Category 8 in reliance upon the Accredited Investor categories above, state the name, address, total personal income from all sources for the previous calendar year, and the net worth (exclusive of home, home furnishings and personal automobiles) for each equity owner of the said entity: </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>______________________________________________________________________________</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>______________________________________________________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>The Subscriber hereby certifies that the information contained in this Questionnaire is complete and accurate and the Subscriber will notify the Company promptly of any change in any such information.  If this Questionnaire is being completed on behalf of a corporation, partnership, trust or estate, the person executing on behalf of the Subscriber represents that it has the authority to execute and deliver this Questionnaire on behalf of such entity.</font></p>

<p style=' margin-bottom:18pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the ______ day of __________________, 20_____.</font></p>


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        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:104.35pt'>
            <p style='margin-left:0pt;text-indent:72pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><font size=2>If a Corporation, Partnership or</font><br> <font size=2>Other Entity:</font></p>
<p style='margin-left:0pt;text-indent:3.0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Print or Type Name of Entity</font></p>
<p style='margin-left:0pt;text-indent:3.0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Signature of Authorized Signatory</font></p>
<p style='margin-left:0pt;text-indent:3.0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Type of Entity</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:104.35pt'>
            <p style='margin-left:12.6pt;text-indent:72pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><font size=2>If an Individual:</font><br > <br > </p>
<p style='margin-left:12.6pt;text-indent:219.75pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Signature</font></p>
<p style='margin-left:12.6pt;text-indent:219.75pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Print or Type Name</font></p>
<p style='margin-left:12.6pt;text-indent:219.75pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <font size=2>Social Security/Tax I.D. No.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/BIP/642696.5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


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<DESCRIPTION>EXHIBIT 10.9
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.9</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:24pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>INVESTORS&#146; RIGHTS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>GREEMENT</font></b></p>


<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.06in;text-align:left;'><font SIZE=1>D/BIP/673359.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="48" style=' margin-left:205.5pt;border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 1 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:18pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:center;'><b><font size=2>INVESTORS&#146; RIGHTS AGREEMENT</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>THIS INVESTORS&#146; RIGHTS AGREEMENT (the &#147;</font><b><font size=2>Agreement</font></b><font size=2>&#148;) is made as of the 24th day of January, 2005, by and among Pluristem Life Systems Inc., a Nevada corporation (the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;) and the investors listed on </font><u><b><font size=2>Schedule</font></b><font size=2>&nbsp;</font><b><font SIZE=2>A</font></b></u><font size=2> hereto, each of which is herein referred to as an &#147;</font><b><font size=2>Investor</font></b><font size=2>&#148; with respect to the shares of Common Stock held by it and collectively the &#148;</font><b><font size=2>Investors</font></b><font size=2>&#148;). </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><u><font SIZE=2>RECITALS</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>WHEREAS, the Company and the Investor are parties to the Common Stock</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>and Warrant Purchase Agreement, dated as of January 24, 2005 (as the same may be amended from time to time, the "</font><b><font size=2>Purchase Agreement</font></b><font size=2>&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:3pt; text-indent:0.98in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>WHEREAS, in order to induce the Investors to invest funds in the Company, the Investors and the Company hereby agree to enter into this Agreement which shall set forth the rights of the Investor to cause the Company to register shares of Common Stock issued or issuable to the Investors under the Purchase Agreement and certain other matters as set forth herein; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>NOW, THEREFORE, in consideration of the premises and the mutual</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>agreements and covenants hereinafter set forth, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Investors hereby agree as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="95" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Definitions</font></b></u><b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>For purposes of this Agreement:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in; text-indent:-0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>


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        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.1</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font size=2>Act</font></b><font size=2>&#148; means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.2</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font size=2>Form</font></b><font size=2>&nbsp;</font><b><font SIZE=2>S-3</font></b><font size=2>&#148; means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.3</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term</font><b><font size=2> </font></b><font size=2>&#148;</font><b><font size=2>Common Stock</font></b><font size=2>&#148; means the Company&#146;s Common Stock, par value US $0.00001 per share.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.4</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term "</font><b><font size=2>Control</font></b><font size=2>" (including the terms "</font><b><font size=2>Controlled by</font></b><font size=2>" and "</font><b><font size=2>under common control with</font></b><font size=2>&#148;) means, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.06in;text-align:left;'><font SIZE=1>D/BIP/673359.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.5</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term</font><b><font size=2> </font></b><font size=2>"</font><b><font size=2>Person</font></b><font size=2>" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the 1934 Act.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.6</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term</font><b><font size=2> </font></b><font size=2>"</font><b><font size=2>Affiliate</font></b><font size=2>" means, with respect to any specified Person, any Person that directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.7</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term</font><b><font size=2> </font></b><font size=2>&#148;</font><b><font size=2>Warrant</font></b><font size=2>&#148; shall mean any of the warrants issued to the Investors pursuant to the Purchase Agreement.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.8</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#148;</font><b><font size=2>Registrable Securities&#148;</font></b><font size=2> means (i) Common Stock, held by the Investors and/or transferees of the Investors issued under the Purchase Agreement including Common Stock resulting from exercise of Warrants and (iii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the Common Stock referred to in clause (i), excluding in all cases, however, (A) any Registrable Securities sold by a person in a transaction in which his rights under this Agreement are not assigned; (B) any shares of Common Stock that could be distributed by the holder thereof pursuant to Rule 144 (in
accordance with applicable law) within six (6) months without the registration of such shares and (C) any shares of Common Stock covered by a registration statement in effect. </font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.9</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The number of shares of &#148;</font><b><font size=2>Registrable Securities then outstanding</font></b><font size=2>&#148; shall be determined by the number of Common Stock outstanding, calculated on an as-converted basis, which are Registrable Securities.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.10</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>"</font><b><font size=2>Rule 144</font></b><font size=2>" shall mean Rule 144 under the Act or any successor or similar rule as may be enacted by the SEC from time to time, but shall not include Rule 144A.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.11</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#148;</font><b><font size=2>Holder</font></b><font size=2>&#148; means any person lawfully owning or having the right to acquire Registrable Securities.</font></p> </td> </tr>
    <tr >
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.12</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font size=2>1934 Act</font></b><font size=2>&#148; means the Securities Exchange Act of 1934, as amended.</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.13</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font size=2>register</font></b><font size=2>,&#148; &#147;</font><b><font size=2>registered</font></b><font size=2>,&#148; and &#147;</font><b><font size=2>registration</font></b><font size=2>&#148; refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.</font></p> </td> </tr>
    <tr >
        <td width="47" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.14</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The term &#147;</font><b><font SIZE=2>SEC</font></b><font size=2>&#148; shall mean the Securities and Exchange Commission.</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="53" ></td>

        <td width="1" ></td>

        <td width="532" ></td>

        <td width="60" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="202" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2.</font></b></p> </td>
        <td width="154" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Initial Registration</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the conditions of this Section&nbsp;2, the Company shall file a registration statement (the &#147;Initial Registration&#148;) under the Act covering the registration of the Registrable Securities, to become effective within nine months of November 30, 2004. The Company shall use best efforts to effect the registration under the Act of all Registrable Securities held by the Holders as aforesaid.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Holders intend to distribute the Registrable Securities by means of an underwriting, they shall so advise the Company. The underwriter will be selected by the Holders subject to the approval of the Company (not to be unreasonably withheld). In such event the right of any person to include securities in such registration shall be conditioned upon such person&#146;s participation in such underwriting and the inclusion of such person&#146;s securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Holders) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the selected underwriter or underwriters. If any Holder disapproves of the terms of the underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company, the underwriter and the other Holders. The Registrable Securities so withdrawn from such underwriting shall also be withdrawn from such registration; provided that if by the withdrawal of such Registrable Securities, a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum limitations imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration, the right to include additional Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the underwriter advises the Company that marketing factors require a limitation of the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be limited and shall be allocated, first, to the Holders with respect to their Registrable Securities and second (if any additional shares may be included), to any holders of other securities. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. If the underwriter has not so limited the number of Registrable Securities to be underwritten, the Company may include securities for its own account or the account of others in such registration if the
underwriter so agrees and if the number of Registrable Securities which would otherwise have been included in such registration will not thereby be or the price applicable to such included securities will not thereby be reduced.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this section&nbsp;2 prior to the date which is the month anniversary of the Closing. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="226" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3.</font></b></p> </td>
        <td width="178" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Company Registration</font></b></u><b><font size=2>. </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If (but without any obligation to do so) the Company proposes, commencing nine months after the Closing, to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than a registration relating solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization or other transaction under Rule&nbsp;145 of the Act), the Company shall, at such time, promptly give each Holder who holds Registerable Securities a written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company, the Company shall, subject to the provisions of Section&nbsp;5, use
best efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall have the right to terminate or withdraw any registration initiated by it under this Section&nbsp;3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the Company.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with any offering involving an underwriting of shares of the Company&#146;s capital stock, the Company shall not be required under this Section&nbsp;3 to include any of the securities of the Holders in such underwriting unless they accept the terms of the underwriting, in customary form, as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with an underwriter or underwriters selected by the Company and approved by holders of at least a majority of the Registrable Securities, which approval shall not be unreasonably withheld, and then only in such quantity as the underwriters determine in their sole discretion will not materially and adversely jeopardize the success of the offering by the Company. If the total
amount of securities, including Registrable Securities, requested by the Holders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion could materially and adversely jeopardize the success of the offering by the Company, then the Company shall be required to include in the offering only that number of securities, including Registrable Securities, that the underwriters determine in their sole discretion will not materially and adversely jeopardize the success of the offering (the securities so included to be (i) first the securities which the Company proposes to register, (ii) second, if remaining, pro rata among the Holders exercising their piggyback registration rights pursuant to Section 3.1 above based on their holdings of the Registrable Securities. In no event shall any Registrable Securities be excluded from such offering unless all other stockholders&#146; securities are first
excluded.  </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the preceding parenthetical concerning apportionment, for any stockholder that is a Holder of Registrable Securities that is a partnership or corporation, the Affiliates, partners, retired partners and stockholders of such Holder, or the estates and family members of any such Affiliates, partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single &#147;Holder&#148;, as applicable, and any pro-rata reduction with respect to such &#147;Holder&#148; shall be based upon the aggregate amount of </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>the applicable class of Registrable Securities owned by all such related entities and individuals.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The right of the Holders of Registrable Securities under this Section 3 may be used for an unlimited number of times.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="224" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.</font></b></p> </td>
        <td width="176" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Form S-3 Registration</font></b></u><b><font size=2>. </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>In case the Company shall receive from the Holders a written request or requests that the Company effects a registration on Form&nbsp;S-3 or any equivalent form and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;use best efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders&#146; Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders who have notified the Company in a written request given within twenty (20) days after receipt of such written notice from the Company of their intention to join such request (&#148;</font><b><font size=2>Form S-3 Joining Holders</font></b><font size=2>&#148;). </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this section&nbsp;4:</font></p>


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        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>if Form&nbsp;S-3 is not available for such offering by the Holders;</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td width="181" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>prior to August 30, 2005;</font></p> </td>
        <td  width="228">
            <p style='margin-left:0pt;text-indent:70.9pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;during the period starting with the date forty five&nbsp;(45) days prior to the Company&#146;s good faith estimate of the date of the filing of, and ending three months immediately following the effective date of, a Company-initiated registration (other than a registration relating solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization or other transaction under Rule&nbsp;145 of the Act), provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section&nbsp;4 shall not be counted as registration effected pursuant to Section&nbsp;2.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>5.</font></b></p> </td>
        <td width="216" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Obligations of the Company</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Whenever required under this Agreement to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prepare and file with the SEC a registration statement with respect to such Registrable Securities and use best efforts to cause such registration statement to become effective, and,  keep such registration statement effective until the distribution contemplated in the registration statement has been completed, or, in the event of registration pursuant to Sections 3 or 4, for a period of twelve (12) months, if earlier. The Company shall not be deemed to have used its reasonable best efforts to keep a registration statement effective during the applicable period if it voluntarily takes any action that would result in the Holder not being able to sell such Registrable Securities during that period, unless such action is required  under applicable law;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement within the period of Section 5.1 hereinabove;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;furnish to the Holders and each duly authorized underwriter such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, including indemnification and other customary provisions, in usual and customary form, with the managing underwriter of such offering;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act or the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use its reasonable best efforts to amend or supplement such prospectus as soon as practicable to cause such prospectus not to include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;notify each Holder of Registrable Securities covered by such registration statement, promptly after the Company shall receive notice thereof, of the time when such registration statement becomes effective or when any amendment or supplement or any prospectus forming a part of such registration has been filed.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;notify each Holder of Registrable Securities covered by such registration statement, promptly of any request by the SEC for the amending or supplementing of such registration statement or prospectus for additional information.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;advise each Holder whose Registrable Securities are included in such registration statement promptly after the Company shall receive notice or otherwise obtain knowledge of the issuance of any order by the SEC suspending the effectiveness of such registration statement or amendment thereto or of the initiation or threatening of any proceeding for that purpose; and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal promptly if a stop order should be issued.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Agreement on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Agreement, if such securities are being sold through underwriters, or otherwise, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter, dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Same obligations as provided by subsections (h), (j), (l) and (m) of Section 3 of that certain Registration Rights Agreement dated as of January 15, 2004 among the Company and certain purchasers of its common stock.</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6.</font></b></p> </td>
        <td width="197" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Information from Holder</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.04in;text-align:justify;'><font size=2>It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the Registrable Securities of any selling Holder that such Holder shall promptly furnish to the Company in writing, upon its written request, such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder&#146;s Registrable Securities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>7.</font></b></p> </td>
        <td width="192" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Expenses of Registration</font></b></u><b><font size=2>. </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>All expenses other than underwriting discounts and commissions incurred in connection with registrations, including pre registration expenses such as stockmarket experts or advisors fees etc, filings or qualifications pursuant to Sections&nbsp;2, 3 and 4, including (without limitation) all registration, filing and qualification fees, printers&#146; and accounting fees, fees and disbursements of counsel for the Company, shall be borne by the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.59in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8.</font></b></p> </td>
        <td width="168" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Delay of Registration</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>9.</font></b></p> </td>
        <td width="133" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Indemnification</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.04in;text-align:left;'><font size=2>In the event any Registrable Securities are included in a registration statement under this Agreement:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners or officers, directors and stockholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act (collectively and individually referred to as the &#147;</font><b><font size=2>Indemnified Party</font></b><font size=2>&#148;), against any losses, claims, damages or liabilities (joint or several) (or actions with respect thereof) to which they may become subject under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or
violations (collectively a &#147;</font><b><font size=2>Violation</font></b><font size=2>&#148;): (i)&nbsp;any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii)&nbsp;the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii)&nbsp;any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws; and the Company will reimburse each Indemnified Party, for any legal or other expenses reasonably incurred by them in connection with investigating, preparing or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in
this subsection&nbsp;9.1 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon (i) a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Indemnified Party, or (ii) in the case of a sale directly by a seller of Registrable Securities, such Violation was made in a preliminary prospectus and corrected in a final or amended prospectus and due notice was given to all Registrable Securities holders by the Company, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>9</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>and such seller of Registrable Securities failed to deliver a copy of the final or amended prospectus at or prior to the confirmation of the sale of Registrable Securities to the person or entity asserting such loss, claim, damage or liability in any case where such delivery is required by the Act or any state securities laws.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder, and stated to be specifically for use in connection with such registration; and each such Holder will reimburse any person intended to be indemnified pursuant to this subsection 9.2, for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection&nbsp;9.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld), and further provided that in no event shall any indemnity under this subsection&nbsp;9.2 exceed the gross proceeds from such offering received by such Holder.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly after receipt by an indemnified party under this Section&nbsp;9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section&nbsp;9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by
the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section&nbsp;9, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section&nbsp;9.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the indemnification provided for in this Section&nbsp;9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>10</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the
parties&#146; relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall govern.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing indemnity agreements of the Company and Holders are subject to the condition that, insofar as they relate to any Violation made in a preliminary prospectus but eliminated or remedied in the amended prospectus on file with the SEC at the time the registration statement in question becomes effective or the amended prospectus filed with the SEC pursuant to Commission Rule 424(b) (the &#147;</font><b><font size=2>Final Prospectus</font></b><font size=2>&#148;), such indemnity agreement shall not inure to the benefit of any person if a copy of the Final Prospectus (i)&nbsp;was furnished to the indemnified party and (ii)&nbsp;was not furnished to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the 1933 Act.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>9.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The obligations of the Company and Holders under this Section&nbsp;9 shall survive the completion of any offering of Registrable Securities in a registration statement under this Agreement, and otherwise.</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10.</font></b></p> </td>
        <td width="348" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Reports Under Securities Exchange Act of 1934</font></b></u><b><font size=2>. </font></b><font size=2>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>With a view to making available to the Holders the benefits of Rule&nbsp;144 promulgated under the Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;make and keep public information available, as those terms are understood and defined in SEC Rule&nbsp;144, at all times after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if the Company qualifies for registration on Form S-3, take such action, including the voluntary registration of its Common Stock under Section 12 of the 1934 Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>11</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act including all certifications of the chief executive officer and chief executive officer, or persons performing similar functions, required to be included therein or attached thereto; </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i)&nbsp;a written statement by the Company that it has complied with the reporting requirements of SEC Rule&nbsp;144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Act and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form&nbsp;S-3 (at any time after it so qualifies), (ii)&nbsp;a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii)&nbsp;such other information as may reasonably be requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such
securities without registration or pursuant to such form; and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>10.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;maintain controls and other procedures designed to ensure that information required to be disclosed by the Company in its reports filed or submitted under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the Commission&#146;s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company&#146;s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="286" style=' border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td width="238" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Restrictions on Sale by Holders</font></b><font size=2>. &nbsp;</font></u><b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>11.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything herein to the contrary, and notwithstanding that the Registerable Securities may be registered and freely tradable, commencing on the Closing, a Holder may not transfer, sell or offer for sale under such Initial Registration statement or otherwise such Holder&#146;s Registrable Securities until August 30, 2005. Commencing after August 30, 2005, each of the Holders shall be entitled to sell up to 25% of such Holder&#146;s Registrable Securities in each three month period. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>11.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to effect the orderly sale of the Registerable Securities as per section 11.2, the parties agree that the Registerable Securities will be held by an escrow agent named in the Escrow Agreement (defined in the Purchase Agreement) and will be released to each Investor as to 25% of the Shares and 25% of the Warrants on each of the 9, 12, 15, and 18 month anniversaries of November 30, 2004. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>12.</font></b></p> </td>
        <td width="258" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Assignment of Registration Rights</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The rights to cause the Company to register Registrable Securities pursuant to this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities provided that such transfer or assignment is made pursuant to </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>12</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>the provisions of the Company&#146;s Certificate of Incorporation, as amended, and any other provisions relating to transfer of securities and applicable law, and provided further that: (a)&nbsp;the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b)&nbsp;such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including without limitation the provisions of Section&nbsp;13 below; and (c)&nbsp;such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>13.</font></b></p> </td>
        <td width="120" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Miscellaneous</font></b></u><b><font size=2>.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Successors and Assigns</font></u><font size=2>. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any shares of Registrable Securities). Nothing in this Agreement, expressed or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. No assignment or transfer under this section 14 shall be made unless the transferee agrees in writing to be bound by all agreements binding upon the Company&#146;s stockholders immediately prior to such transfer. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Governing Law</font></u><font size=2>. This Agreement will be governed by and construed in accordance with the laws of the State of Israel excluding those pertaining to conflict of laws.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Counterparts</font></u><font size=2>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts executed and delivered by facsimile, e-mail or any other visible electronic means shall be deemed as originals.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Titles and Subtitles</font></u><font size=2>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Notices</font></u><font size=2>. Any notice required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed given to such party under this Agreement on the earliest of the following: (a) the date of personal delivery; (b) one (1) business day after transmission by facsimile, e-mail or any other visible electronic means addressed to the other party at its facsimile number, e-mail or other address, with confirmation of transmission; (c) one (1) business day after deposit with a return receipt express courier for domestic deliveries, or five (5) business days after deposit with a return receipt express courier for deliveries oversees; or (d) five (5) business days after deposit with local mail for registered or certified mail (return receipt requested). All notices not
delivered personally or by facsimile or e-mail or electronically will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address of such party in the records of the Company or at such other address as such other party may designate by a ten (10) days prior written notice to the other parties hereto. All notices for delivery abroad will be sent by facsimile, e-mail or any other visible electronic means or by overnight </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>13</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>courier. Any notice given hereunder to more than one person will be deemed to have been given, for purposes of counting time periods hereunder, on the date effectively given to the last party required to be given such notice.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Expenses</font></u><font size=2>. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys&#146; fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Entire Agreement: Amendments and Waivers; Prior Agreement</font></u><font size=2>. This Agreement (including the Schedules hereto, if any) constitutes the full and entire understanding and agreement among the parties hereto with regard to the subject matters hereof and thereof. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding. Any amendment or waiver effected in accordance with this paragraph shall be binding upon the Company, the Common Stock Holders and all Holders and their respective successors and assignees. Effective as of the date hereof, the provisions of the Prior
Agreement in connection with any of the provisions herein shall terminate and be of no further force and effect. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Severability</font></u><font size=2>. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>13.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><u><font size=2>Calculation</font></u><font size=2>. All calculations of the Holders&#146; pro rata share will be made by the Company as of the date of the Company&#146;s notice in which such pro rata share appears.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>13.10&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Obligation of Company; Binding Nature of Exercise</font></u><font size=2>. The Company agrees to use its best efforts to enforce the terms of this Agreement, to inform each Holder of any breach hereof (to the extent the Company has knowledge thereof) and to assist each Holder in the exercise of such Holder&#146;s rights and performance of such Holder&#146;s obligations hereunder.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>13.11&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Financial Information</font></u><font size=2>. The Company will provide to each Investor, with reasonable promptness, such other financial information and projections relating to the business, affairs and financial condition of the Company as is made available by the Company to any other stockholders of the Company (or any series, class or group of stockholders)and as from time to time such Investor may reasonably request.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>14</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>Pluristem Life Systems, Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:9pt; margin-left:0.03in; text-indent:-0.02in;text-align:left;'><font size=2>By: _________________</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>_____________, CEO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Address: ______________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>Investor:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>______________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in;text-align:left;'><b><font size=2>(Print Name)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>_________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in;text-align:left;'><b><font size=2>Signature</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in; text-indent:-0.02in;text-align:left;'><b><font size=2>_________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.02in;text-align:left;'><b><font size=2>Address</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.03in; text-indent:-0.02in;text-align:center;'><b><font size=2>Pluristem Life Systems, Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.03in; text-indent:-0.02in;text-align:center;'><b><font size=2>Investors Rights Agreement dated January 24, 2005</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.03in; text-indent:-0.02in;text-align:center;'><b><font size=2>Signature Page</font></b><font size=2> </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:center;'><font size=2>15</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.02in; text-indent:-2.02in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.03in; text-indent:-0.02in;text-align:center;'><u><font size=2>&nbsp;&nbsp;</font><b><font size=2>Schedule A</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(Investors&#146; Rights Agreement)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2in; text-indent:-2in;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2in; text-indent:-2in;text-align:center;'><u><b><font size=2>Schedule of Investors</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2in; text-indent:-2in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2in; text-indent:-2in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.98in;text-align:left;'>&nbsp;</p>


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<TYPE>EX-10
<SEQUENCE>10
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<DESCRIPTION>EXHIBIT 10.10
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<p STYLE=' MARGIN-BOTTOM:6PT; MARGIN-TOP:12PT;TEXT-ALIGN:RIGHT;'><FONT SIZE=2>EXHIBIT 10.10</FONT></P>

<p STYLE=' MARGIN-BOTTOM:6PT; MARGIN-TOP:12PT;TEXT-ALIGN:CENTER;'><B><FONT SIZE=2>ESCROW AGREEMENT</FONT></B></P>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>THIS AGREEMENT dated for reference the  </font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>day of January, 2005</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:justify;'><font SIZE=2>AMONG:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS</font></b><font size=2>, </font><b><font SIZE=2>INC.</font></b><font size=2>,  a Nevada company, having an office at Matam Center, Building 20, Haifa, 31905, Israel (herein called &#147;Pluristem&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE FIRST PART</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>AND:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>THOSE INVESTORS</font></b><font size=2> who are listed on the attached Schedule &#147;A&#148;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(herein jointly called the &#147;Investors&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE SECOND PART</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>AND:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>H. MELVILLE HICKS JR.,</font></b><font size=2> attorney, of 551 5th Avenue, Suite 1625, New York, New York 10176</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>herein called the &#147;Escrow Agent&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE THIRD PART</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font SIZE=2>WITNESSES THAT WHEREAS:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Pluristem approved of a private placement of Units each Unit consisting of one common share (each a &#147;Share&#148;) and one common share purchase warrant (each a &#147;Warrant&#148;) with Investors listed in Schedule A attached hereto pursuant to Share Purchase Agreements (&#147;SPAs&#148;) and Investors&#146; Rights Agreements (&#147;IRAs&#148;)dated for reference January ___, 2005;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SPAs and IRAs contemplated that the Shares and Warrants would be held in escrow with release over time;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pluristem and the Investors desire to appoint the Escrow Agent, and the Escrow Agent has agreed to act as escrow agent, to hold the Shares and Warrants in accordance with the terms hereof;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/673027.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 2 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>DEFINITIONS AND INTERPRETATION</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wherever used in this Agreement, unless the context otherwise requires, the following words and terms will have the meanings shown:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Agreement&#148; means this escrow agreement;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Company&#148; means Pluristem;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Closing Date&#148; means the day the initial Shares and Warrants were paid for and issued by the Company;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Release Date&#148; means each of the 9, 12, 15 and 18 month anniversaries November 30, 2004;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Subsequent Closing Date&#148; means any closing of purchase and sale of Shares and Warrants pursuant to the SPAs not completed on the Closing Date.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.2</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In this Agreement:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the headings have been inserted for convenience of reference only and in no way define, limit, or enlarge the scope or meaning of the provisions of this Agreement;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>all references to any party, whether a party to this Agreement or not, will be read with such changes in number and gender as the context or reference requires; and</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>when the context hereof makes it possible, the word &#147;person&#148; includes in its meaning any firm and any body corporate or politic.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>DEPOSIT OF SHARES AND WARRANTS</font></u></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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        <td width="52" ></td>

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        <td width="4" ></td>

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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will within three (3) days of the Closing Date or any Subsequent Closing Dates, whichever is applicable, deliver the Shares and Warrants to the Escrow Agent for deposit in escrow with the Escrow Agent on the terms of this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>ESCROW PROVISIONS</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company hereby directs the Escrow Agent to retain the Shares and Warrants in safekeeping, and not to do or cause anything to be done to release the Shares and Warrants from escrow except in accordance with this Agreement.  The Escrow Agent accepts its responsibilities hereunder and agrees to perform them in accordance with the terms hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will hold the Shares and Warrants in escrow and will deliver twenty five (25%) percent of each Investor&#146;s Shares and Warrants to such Investor on each Release Date.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Shares and Warrants will not be released from escrow, transferred within escrow or otherwise in any manner dealt with except in accordance with this Agreement or as may be required by reason of the bankruptcy of the Company, in which case the Escrow Agent </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/673027.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 3 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>will hold the Shares and Warrants subject to this Agreement, for whatever person, firm or corporation shall be legally entitled to be or become the owner thereof.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>THE ESCROW AGENT</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In exercising the rights, duties and obligations prescribed or confirmed by this Agreement, the Escrow Agent will act honestly and in good faith and will exercise that degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Investor jointly and severally covenant and agree from time to time and at all times hereafter well and truly to save, defend and keep harmless and fully indemnify the Escrow Agent, its successors, and assigns, from and against all loss, costs, charges, suits, demands, claims, damages and expenses which the Escrow Agent, its successors or assigns may at any time or times hereafter bear, sustain, suffer or be put unto for or by reason or on account of its acting pursuant to this Agreement or anything in any manner relating thereto or by reason of the Escrow Agent&#146;s compliance in good faith with the terms hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case proceedings should hereafter be taken in any court respecting the Shares and Warrants, the Escrow Agent will not be obliged to defend any such action or submit its rights to the court until it has been indemnified by other good and sufficient security against its costs of such proceedings.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will have no responsibility in respect of loss of the Shares and Warrants except the duty to exercise such care in the safekeeping thereof as it would exercise if the Shares and Warrants belonged to the Escrow Agent.  The Escrow Agent may act on the advice of counsel but will not be responsible for acting or failing to act on the advice of counsel.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will not be bound in any way by any contract between the parties hereto whether or not it has notice thereof or of its terms and conditions and the only duty, liability and responsibility of the Escrow Agent will be to hold the Shares and Warrants as herein directed and to pay and deliver the same to such persons and other such conditions as are herein set forth.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In no event will the Escrow Agent be deemed to have assumed any liability or responsibility for the sufficiency, form and manner of making any notice or demand provided for under this Agreement or of the identity of the persons executing the same, but it shall be sufficient if any writing purporting to be such a notice, demand or protest is served upon the Escrow Agent in any manner sufficient to bring it to its attention.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Shares and Warrants are attached, garnished or levied upon under any court order, or if the delivery of such property is stayed or enjoined by any court order or if any court order, judgment or decree is made or entered affecting such property or affecting any act by the Escrow Agent, the Escrow Agent may, in its sole discretion, obey and comply with all writs, orders, judgments or decrees so entered or issued, whether with or without jurisdiction, notwithstanding any provision of this Agreement to the contrary.  If the Escrow Agent obeys and complies with any such writs, order, judgment or decrees it will not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/673027.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 4 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>compliance, notwithstanding that such writs, orders, judgments or decrees may be subsequently reversed, modified, annulled, set aside or vacated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as herein otherwise provided, the Escrow Agent is authorized and directed to disregard in its sole discretion any and all notices and warnings which may be given to it by any of the parties hereto or by any other person, firm, association or corporation.  It will, however, obey the order, judgment or decree of any court of competent jurisdiction, and it is hereby authorized to comply with and obey such orders, judgements or decrees and in case of such compliance, it shall not be liable by reason thereof to any of the parties hereto or to any other person, firm, association or corporation, even if thereafter any such order, judgment or decree may be reversed, modified, annulled, set aside or vacated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Escrow Agent receives any written instructions contrary to the instructions contained in this Agreement, the Escrow Agent may continue to hold the Shares and Warrants until the lawful determination of the issue between the parties hereto.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If protest is made to any action contemplated by the Escrow Agent under this Agreement, the Escrow Agent may continue to hold the Shares and Warrants until the right to the Shares and Warrants is legally determined by a court of competent jurisdiction or otherwise.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent may resign as Escrow Agent by giving not less then ten (10)&nbsp;days&#146; written notice thereof to each of the Company or the Investor.  The Company and the Investor may terminate the Escrow Agent by giving to the Escrow Agent a notice of termination executed by each of them not less than ten (10)&nbsp;days prior to the proposed date of termination.  The resignation or termination of the Escrow Agent will be effective and the Escrow Agent will cease to be bound by this Agreement on the date that is ten (10)&nbsp;days after the date of receipt of the termination notice given hereunder or on such other date as the Escrow Agent, the Company and the Investor may agree upon.  All indemnities granted to the Escrow Agent will survive the termination of this Agreement or the
resignation or termination of the Escrow Agent.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything herein to the contrary, the Escrow Agent may act upon any written instructions given by the Company and the Investor jointly.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary contained herein, in the event of any dispute arising between the Company and the Investor or between any other persons or between any of them with respect to this Agreement or any matters arising thereto, or with respect to the Shares and Warrants, the Escrow Agent may in its sole discretion deliver and interplead the Shares and Warrants into court and such delivery and interpleading will be an effective discharge to the Escrow Agent.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="241" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td width="145" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>COUNTERPARTS</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in several counterparts, each of which will be deemed to be an original and all of which will together constitute one and the same instrument.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/673027.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 5 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="190" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td width="94" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>GENERAL</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Agreement will be binding upon the parties hereto unless reduced to writing and signed by the parties.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement will enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors, and assigns.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The parties will execute and deliver all such further documents, do or cause to be done all such further acts and things, and give all such further assurances as may be necessary to give full effect to the provisions and intent of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement will be governed by and construed in accordance with the laws of New York, USA.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted to be given under this Agreement will be in writing and may be given by delivering, sending by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy, or sending by prepaid registered mail posted in Israel or the United States, the notice to the addresses set forth on the first page of this Agreement (or to such other address or facsimile number as any party may specify by notice in writing to another party).  Any notice delivered or sent by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy on a business day will be deemed conclusively to have been effectively given on the day the notice was delivered, or the transmission was sent
successfully, as the case may be.  Any notice sent by prepaid registered mail will be deemed conclusively to have been effectively given on the third business day after posting; but if at the time of posting or between the time of posting and the third business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Notice may be delivered by facsimile to the following facsimile numbers:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="258" style=' margin-left:1.0in;border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Escrow Agent:</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>H. Melville Hicks, Jr.</font></p> </td> </tr>
    <tr >
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fax No.:</font></p> </td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>212-655-5943</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Email:</font></p> </td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>yolyd75@yahoo.com</font></p> </td>
        <td  width="5">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="104" ></td>

        <td width="5" ></td>

        <td width="117" ></td>

        <td width="49" ></td>

        <td width="5" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:left;'><font size=2>Pluristem Life Systems, Inc.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="381" style=' border-collapse:collapse'>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Attention:</font></p> </td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Yossi Keret</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fax No.:</font></p> </td>
        <td  colspan="5" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>972-4-850-1085</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Email:</font></p> </td>
        <td  colspan="5" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>yossi@pluristem.com</font></p> </td>
        <td  width="30">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investors:</font></p> </td>
        <td width="63" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>care of</font></p> </td>
        <td   colspan="5">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="5" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Fax No./Home Email:</font></p>  </td>
        <td   colspan="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="77" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Tel. No.:</font></p>  </td>
        <td   colspan="8">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.6</font></p> </td>
        <td  colspan="9" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Time is of the essence of this Agreement.</font></p> </td> </tr>
    <tr>
        <td width="104" ></td>

        <td width="83" ></td>

        <td width="20" ></td>

        <td width="0" ></td>

        <td width="68" ></td>

        <td width="3" ></td>

        <td width="31" ></td>

        <td width="32" ></td>

        <td width="37" ></td>

        <td width="33" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/673027.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 6 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement on the date of such communication by the party so delivering such copy.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is understood and agreed by the parties to this Agreement that the only duties and obligations of the Escrow Agent are those specifically stated herein and no other. Except for the disposition of the Shares, each Investor shall be recorded by the Company as owner of the Shares and Warrants and shall be entitled to exercise any right and be subject to any obligation as a stockholder and/or warrant holder, including, without limitation, any voting rights associated with the Shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party has been advised and has opportunity to seek and obtain independent legal advice respecting all aspects of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>IN WITNESS WHEREOF the parties have caused this Agreement to be executed and delivered effective as of this </font><u><font size=2>___</font></u><font size=2> day of January, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="46" style=' border-collapse:collapse'>
    <tr>
        <td width="46" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Per:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>ESCROW AGENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="46" style=' border-collapse:collapse'>
    <tr>
        <td width="46" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Per:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/673027.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 7 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>SCHEDULE A</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>LIST OF INVESTORS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="512" style=' border-collapse:collapse'>
    <tr>
        <td width="240" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investor</font></p> </td>
        <td width="192" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Units Held</font></p> </td>
        <td width="80" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Signature</font></p> </td> </tr></table>

<p style=' margin-bottom:6pt; margin-top:12pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/673027.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<TYPE>EX-10
<SEQUENCE>11
<FILENAME>ex10-11fsb2.htm
<DESCRIPTION>EXHIBIT 10.11
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.11</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS WARRANT TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>No. 69</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>WARRANT TO PURCHASE COMMON STOCK</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>OF</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC. </font></b><font size=2>(the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>VOID AFTER 17:00 p.m. N.Y. Time</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>on the last day of the Term (as set forth in Section 1 below)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This is to certify that, for value received, </font><b><font SIZE=2>JOSEPH CORSO</font></b><font size=2>, or its registered assigns (the &#147;</font><b><font size=2>Holder</font></b><font size=2>&#148;) is entitled to purchase, subject to the provisions of this Warrant, from the Company an aggregate of 1,750,000 fully paid and non-assessable shares of the Common Stock, as adjusted from time to time as provided below (&#147;</font><b><font size=2>Common Stock</font></b><font size=2>&#148; and such shares, the &#147;</font><b><font size=2>Warrant Shares</font></b><font size=2>&#148;) of the Company, as constituted on the date hereof (the &#147;</font><b><font size=2>Warrant Issue Date</font></b><font size=2>&#148;), upon surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, at the principal office of the Company referred to below, and
simultaneous payment therefor in lawful money of the United States, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below.</font></p>


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    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Term of Warrant</font></u><font size=2>. Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time during the term commencing on the Warrant Issue Date and ending at the earlier of (i) November 30, 2006; or (ii) subject to notice requirements of Section 12(b) hereto, the acquisition of the Company by another entity by means of a reorganization, merger or consolidation which results in more than fifty percent (50%) of the outstanding voting securities of the surviving entity being held by persons who were not stockholders of the Company immediately prior to such transaction; or (iii) subject to notice requirements of Section 12(b) hereto, a sale, lease, assignment, transfer or other disposition of all or substantially all of the assets of the Company; (each of the
event in this subsections (ii) and (iii), a &#147;</font><b><font size=2>M&amp;A Transaction</font></b><font size=2>&#148;); (the </font><b><font size=2>&#147;Term&#148;</font></b><font size=2>), and shall be void thereafter. </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>D/ljm/676550.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise Price</font></u><font size=2>.  The purchase price at which this Warrant may be exercised shall be $0.30 per Warrant Share, as adjusted from time to time pursuant to Section 9 hereof (the </font><b><font size=2>&#147;Exercise Price&#148;</font></b><font size=2>).</font></p> </td> </tr>
    <tr >
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise of Warrant</font></u></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Manner of Exercise</font></u><font size=2>.  This Warrant is exercisable by the Holder in whole or in part, at any time and from time to time, during the Term, by the surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, to the Secretary of the Company at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), provided that the Holder shall also deliver to the Company, concurrent with such surrender, a check payable in lawful money of the United States for the aggregate Exercise Price for the Warrant Shares being purchased.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.2.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date.  As promptly as practicable on or after such date and in any event within thirty (30) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the remaining number of shares for
which this Warrant may then be exercised.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Fractional Shares or Scrip</font></u><font size=2>.  No fractional shares or scrip representing fractional share shall be issued upon the exercise of this Warrant.  In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall round up such fraction to the nearest whole number.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Replacement of Warrant</font></u><font size=2>.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of loss, theft, or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Compliance with Securities Laws</font></u><font size=2>.  This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Holder of this Warrant, by acceptance hereof, acknowledges that (i) this Warrant and the Warrant Shares to be issued upon exercise </font></p> </td> </tr>
    <tr>
        <td width="53" ></td>

        <td width="1" ></td>

        <td width="53" ></td>

        <td width="113" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>hereof are being acquired solely for the Holder&#146;s own account and not as an agent or nominee for any other party, and for investment; (ii) the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Act, any state securities laws or any applicable securities law of foreign jurisdictions, or any rules or regulations promulgated thereunder; and (iii) such Holder is either an &#147;accredited investor&#148; within the meaning of Securities and Exchange Commission Rule 501 of Regulation&nbsp;D, as presently in effect or is not a U.S. Person, as defined by Regulation S promulgated under the Act.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unless the Warrant Shares have been registered under the Act, all shares issuable hereunder shall bear the following legend: </font><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reservation of Stock</font></u><font size=2>.  The Company covenants that during the Term this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of common Stock upon the exercise of this Warrant and, from time to time, will take all steps necessary to provide sufficient reserves of shares of the Common Stock issuable upon the exercise of the Warrant.  The Company further covenants that all Warrant Shares will be duly authorized, validly issued, fully paid and nonassessable, and will be free from all taxes, liens and preemptive rights in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein).  The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares issued upon the exercise of this Warrant. </font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Amendments and Waivers</font></u><font size=2>.  This Warrant is being issued as one of a series of warrants issued by the Company on the date hereof and, accordingly, any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the holder of this Warrant.  Any amendment or waiver effected in such manner shall be effective to modify or waive the provisions of this Warrant. No waivers of, or exceptions to any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments</font></u><font size=2>.  The Exercise Price and the number of Warrant Shares purchasable hereunder are subject to adjustment from time to time during the Term of this Warrant as follows:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:35.45pt; border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reclassification.</font></u><font size=2> If the Company at any time while this Warrant, or any portion thereof, remains outstanding and un-expired shall, by reorganization or reclassification of securities or otherwise (including in connection with any anti-dilution adjustments), change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such reorganization or reclassification or other change and the Exercise Price then in effect shall, concurrently with the
effectiveness of such reorganization or reclassification, be proportionately adjusted (provided the aggregate purchase price shall remain the same) such that this Warrant shall be exercisable into, in lieu of the number of Warrant Shares which the Holder would otherwise have been entitled to receive, a number of shares of such other class or classes of stock that would have been subject to receipt by the Holder had the Holder exercised the Warrant immediately before that change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Split, Subdivision or Combination of Shares</font></u><font size=2>.  If the Company at any time while this Warrant, or any portion hereof, remains outstanding and un-expired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased and the number of securities issuable upon exercise proportionately increased in the case of a split or subdivision or the Exercise Price of such securities shall be proportionately increased and the number of securities issuable upon exercise proportionately decreased in the case of a combination. Any adjustment under this Section&nbsp;9.2 shall become effective concurrently with the subdivision or combination becomes
effective.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.3.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments for Dividends in Stock or Other Securities or Property</font></u><font size=2>.  If, while this Warrant, or any portion hereof, remains outstanding and un-expired, the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property of the Company by way of dividend or otherwise, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon the exercise of this Warrant, and without payment of any additional consideration thereof, the amount of such other or additional stock or other
securities or property as aforesaid of the Company which such Holder would hold on the date of such </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 9. Any adjustment under this Section&nbsp;9.3 shall become effective as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.4.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Certificate as to Adjustments</font></u><font size=2>.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 9, the Company shall, upon the written request of any holder of this Warrant, furnish or cause to be furnished to such holder a certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.</font></p> </td> </tr>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.5.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Impairment</font></u><font size=2>.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all of the provisions of this Section 9 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of this Warrant against impairment.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Governing Law</font></u><font size=2>.  This Warrant and the legal relations between the parties arising hereunder shall be governed by and interpreted in accordance with the laws of the State of Israel without regard to its conflict of laws principles. The parties hereto agree to submit to the nonexclusive jurisdiction of the federal and state courts of the State of Israel with respect to the breach or interpretation of this Warrant or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Entire Agreement, Successors and Assigns</font></u><font size=2>.  This Warrant constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assign as a matter law, heirs, executors and administrators of the parties hereto.  The Holder may not assign, distribute or otherwise transfer this Warrant without the consent of the Company (and in such event subject to the provisions of Section 6 herein), except for a permitted transfer as such term is defined
in the Investors&#146; Rights Agreement dated as of the date hereof between the Company and certain of its stockholders, as amended from time to time.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Notices, Etc</font></u><font size=2>.   (a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of any Investor, to the address of such Investor as set forth on the signature page hereto or such other address of such Investor as shall be designated in writing from time to time by such Investor.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States or Israeli mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of such facsimile.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company shall give the Holder a written notice of impending M&amp;A Transaction or a transaction (including, without limitation, any reorganization, merger or consolidation, or sale or exchange of capital stock) as a result of which the stockholders of the Company immediately prior to such transaction receive cash, securities of a publicly traded company, or any other assets, or a combination thereof, as consideration, not later than twenty (20) business days prior to the stockholders&#146; meeting called to approve such transaction, or twenty (20) business days prior to the closing of such transaction, whichever is earlier, and shall also notify the Holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and
conditions of the impending transaction and the provisions of this Warrant in connection therewith, and the Company shall thereafter give the Holder prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) business days after the Company has given the first notice provided for herein or sooner than twenty (20) business days after the Company has given notice of any material changes provided for herein.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Delays or Omissions</font></u><font size=2>.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Warrant, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Subject to Section 8, any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Warrant, or any waiver on the part of any Holder of any provisions or conditions of this
Warrant, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Warrant or by law or otherwise afforded to any holder, shall be cumulative and not alternative.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Expenses</font></u><font size=2>.  Except as otherwise provided herein, the Company and the Holder shall each bear its own expenses incurred on its behalf with respect to this Warrant and the transactions contemplated hereby.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Severability</font></u><font size=2>.  In the event that any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Warrant shall continue in full force and effect without said provision, and such provision shall be given effect to the extent legally possible.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Titles and Subtitles</font></u><font size=2>.  The titles and subtitles used in this Warrant are used for convenience only and are not considered in construing or interpreting this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>17.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Survival</font></u><font size=2>.  The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>18.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Stockholder Rights</font></u><font size=2>. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote such Warrant Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.  </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>[</font><i><font size=2>Balance left blank intentionally</font></i><font size=2>]</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>IN WITNESS HEREOF, Pluristem Life Systems, Inc. has caused this Warrant to be executed by its officers thereunto duly authorized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated:  January 27, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.87in; text-indent:0.49in;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="294" style=' margin-left:170.25pt;border-collapse:collapse'>
    <tr>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="227" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>__________________________</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="54" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="54" ></td>

        <td width="8" ></td>

        <td width="5" ></td>

        <td width="227" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>AGREED AND ACCEPTED BY:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="214" style=' border-collapse:collapse'>
    <tr>
        <td width="189" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>[</font></p> </td>
        <td width="25" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>]</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="371" style=' border-collapse:collapse'>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="324" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>_____________________________ (signature)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="63" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td> </tr>
    <tr >
        <td width="55" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td  width="8">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Address:  ___________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Fax: _______________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>NOTICE OF EXERCISE</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>To: Pluristem Life Systems, Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>NOTICE OF EXERCISE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The undersigned hereby elects to purchase __________ shares of the Common Stock of Pluristem Life Systems, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>(Name)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Address)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for the account of the undersigned and not as an agent or nominee for any other party, and for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Securities Act of 1933, as amended, any state securities laws or any applicable securities laws of foreign jurisdictions or any rules or regulations promulgated thereunder.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Signature)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Date)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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<FILENAME>ex10-12fsb2.htm
<DESCRIPTION>EXHIBIT 10.12
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.12</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>COMMON STOCK </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=3>PURCHASE AGREEMENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p STYLE=' MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT;TEXT-ALIGN:CENTER;'><B><FONT SIZE=2>COMMON STOCK PURCHASE AGREEMENT</FONT></B></P>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>This Common Stock Purchase Agreement (this &#147;</font><b><font size=2>Agreement</font></b><font size=2>&#148;), is made as of March 3, 2005, by and between PLURISTEM LIFE SYSTEMS, INC., a Nevada corporation whose business address is at Matam Centre, Building 20, Haifa, 31905 Israel (the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;), and ERETZ HACARMEL LTD. (the &#147;</font><b><font size=2>Investor</font></b><font size=2>&#148;) whose address is at ________________________, Israel.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>RECITALS</font></b></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><b><font SIZE=2>WHEREAS </font></b><font size=2>in consideration for certain corporate finance advisory services (the &#147;</font><b><font size=2>Services</font></b><font size=2>&#148;) provided to the Company by the Investor, the Company has agreed to issue to the Investor 10,000 common stock in the capital of the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><b><font SIZE=2>THE PARTIES HEREBY AGREE AS FOLLOWS:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1.</font></b></p> </td>
        <td width="282" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Purchase and Sale of Stock.</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Sale and Issuance of Common Stock</font></u><font size=2>. In consideration for the Investor having provided the Services to the Company, the Company hereby agrees to sell and issue to the Investor and the Investor hereby agrees to purchase from the Company 10,000 shares (the &#147;</font><b><font size=2>Shares</font></b><font size=2>&#148;) of common stock, par value $0.00001 per share, of the Company (the &#147;</font><b><font size=2>Common Stock</font></b><font size=2>&#148;).</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Closing</font></u><font size=2>. Subject to the terms and conditions of this Agreement, the purchase and sale of the Common Stock shall take place at a closing (the &#147;</font><b><font size=2>Closing</font></b><font size=2>&#148;) to be held at the offices of Clark Wilson LLP, on or before 10:00 A.M. Pacific time, on March 3, 2005, or at such other time and place as the Company and the Investor (who shall be represented for this matter by </font><font size=2>James Yeung</font><b><font size=2> </font></b><font size=2>(the &#147;</font><b><font size=2>Investors Representative</font></b><font size=2>&#148;) mutually agree upon in writing. At the Closing, the Investor shall deliver to the Company the documents listed in Section 5 of this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2.</font></b></p> </td>
        <td width="485" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Representations and Warranties of the Company.</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>The Company hereby represents and warrants to the Investor that, except as set forth on a Schedule of Exceptions (the &#147;</font><b><font size=2>Schedule of Exceptions</font></b><font size=2>&#148;) furnished to the Investor on or prior to entering into this Agreement, which exceptions shall qualify the representation and warranty that has the corresponding number as the numbered paragraph in the Schedule of Exceptions, and which representations and warranties so qualified shall be deemed to be representations and warranties as if made hereunder, as of the date hereof and as of the date of Closing:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Organization and Qualification; Subsidiaries</font></u><font size=2>. (a) Each of the Company and each subsidiary of the Company (each a &#147;</font><b><font size=2>Subsidiary</font></b><font size=2>&#148;) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite corporate power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, have a Material Adverse Effect (as defined below). Each of the </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Company and each Subsidiary is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, have a Material Adverse Effect. &#147;</font><b><font size=2>Material Adverse Effect</font></b><font size=2>&#148; means any event, circumstance, change or effect that, individually or in the aggregate with all other events, circumstances, changes and effects, is or is reasonably likely to be materially adverse to the business, condition (financial or otherwise), assets, liabilities or results of operations of the Company and the Subsidiaries taken as a whole.  (b) A true and complete list of
all the Subsidiaries, together with the jurisdiction of incorporation of each Subsidiary, is set forth in Section 2.1(b) of the Schedule of Exceptions. Each Subsidiary is a wholly-owned subsidiary of the Company. Except as disclosed in Section 2.1(b) of the Schedule of Exceptions, the Company does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Certificate of Incorporation and By-laws</font></u><font size=2>. The Company has heretofore made available to the Investor a complete and correct copy of the Articles of Incorporation and the By-laws, each as amended to date, of the Company. Such Articles of Incorporation and By-laws are in full force and effect. The Company is not in violation of any of the provisions of its Certificate of Incorporation or By-laws.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.3</font></p> </td>
        <td width="113" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Capitalization</font></u><font size=2>.</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(a) The authorized capital stock of the Company consists of (i) one billion four hundred million shares of Common Stock, par value $0.00001 per share. As of January&nbsp;21, 2005, (i) 26,858,483 shares of Common Stock are issued and outstanding, all of which are validly issued, fully paid and non-assessable, (ii) no shares of Common Stock are held in the treasury of the Company, (iii) no shares of Common Stock are held by the Subsidiaries, and (iv) 3,883,820 shares of Common Stock are reserved for future issuance pursuant to outstanding employee stock options or stock incentive rights granted pursuant to the Company&#146;s 2003 Employee Option Plan and 2005 Option Plan, (collectively, the &#147;</font><b><font size=2>Plans</font></b><font size=2>&#148;). As of the date of this Agreement, no shares of Company Preferred Stock are issued and outstanding. There are warrants outstanding
pursuant to several private placements and otherwise. All shares of Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and non-assessable. There are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares of Common Stock or any capital stock of any Subsidiary or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other person, except pursuant to the Plans and certain outstanding warrant certificates. All outstanding shares of Common Stock, all outstanding stock options to purchase Common Stock, and all outstanding shares of capital stock of each subsidiary of the Company have been issued and granted in compliance with (i) all applicable U.S. securities laws, (ii) all applicable non-U.S.
securities laws, (iii) all other applicable Laws (as defined below) and (iv) all requirements set forth in applicable contracts. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(b) Each outstanding share of capital stock of each Subsidiary is duly authorized, validly issued, fully paid and non-assessable, and each such share is owned by the Company or another Subsidiary free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company&#146;s or any Subsidiary&#146;s voting rights, charges and other encumbrances of any nature whatsoever. The Company has granted registration rights to certain private placees pursuant to certain investors&#146; rights agreements, and further registration rights to certain employees or consultants of the Company for shares to be issued.  Except as set forth above and in the documents of the Company filed with the SEC, there are no registration rights or preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights,
redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind which obligate the Company or any of its Subsidiaries to register, issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire from the Company or any of its Subsidiaries, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are issued or outstanding.  The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Authority</font></u><font size=2>. The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting creditors&#146; rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity). The Company Board of Directors (the &#147;</font><b><font size=2>Board</font></b><font size=2>&#148;) has approved this Agreement and the transactions contemplated hereby and such approvals are sufficient so that the restrictions on business combinations set forth in the Nevada Corporations Code and no other &#147;fair price,&#148; &#147;moratorium,&#148; &#147;control share acquisition&#148; or other similar anti-takeover statute or regulation, (and any similar provisions, each a &#147;</font><b><font size=2>Takeover Statute</font></b><font size=2>&#148;), and no anti-takeover provision in the
amended certificate of incorporation or by-laws of the Company shall not apply to any of the transactions contemplated hereby. </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.5</font></p> </td>
        <td width="304" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Conflict; Required Filings and Consents</font></u><font size=2>.</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(a) The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company will not, (i) conflict with or violate the Certificate of Incorporation or By-laws of the Company, (ii) conflict with or violate any United States or other statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order (&#147;</font><b><font size=2>Law</font></b><font size=2>&#148;) applicable to the Company or any Subsidiary or by which any property or asset of </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>the Company or any Subsidiary is bound or affected, or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of the Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation, except, with respect to clauses (ii) and (iii) of this Section, for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, have a Material Adverse Effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(b) The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any foreign, United States federal, state, county or local or non-United States government, governmental, regulatory or administrative authority, agency, instrumentality or commission (including any stock exchange or inter-dealer quotation system)  or any court, tribunal, or judicial or arbitral body (a &#147;</font><b><font size=2>Governmental Authority</font></b><font size=2>&#148;), other than any filings necessary to comply with federal and state securities or &#147;blue sky&#148; laws.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Permits; Compliance</font></u><font size=2>. Each of the Company and the Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority necessary for each of the Company or the Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted (the &#147;</font><b><font size=2>Company Permits</font></b><font size=2>&#148;), except where the failure to have, or the suspension or cancellation of, any of the Company Permits would not, individually or in the aggregate, have a Material Adverse Effect. No suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, threatened, except where the failure to have, or the
suspension or cancellation of, any of the Company Permits would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary is in conflict with, or in default, breach or violation of, (a) any Law applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected, or (b) any note, bond, mortgage, indenture, contract, agreement, lease, license, Company Permit, franchise or other instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any property or asset of the Company or any Subsidiary is bound, except for any such conflicts, defaults, breaches or violations that would not, individually or in the aggregate, have a Material Adverse Effect.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="291" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.7</font></p> </td>
        <td width="243" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><font size=2>SEC Filings; Financial Statements</font></u><font size=2>.</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(a) The Company has filed all forms, reports and documents required to be filed by it with the Securities and Exchange Commission (the &#147;</font><b><font SIZE=2>SEC</font></b><font size=2>&#148;) since September, 2001, and has heretofore made available to the Investor, in the form filed with the SEC, (i) its Annual Reports on Form 10-K for the fiscal years ended June 30, 2004, 2003, and 2002, respectively, and (ii) all other forms, reports and other registration statements filed by the Company with the SEC since January 1, 2003 (the forms, reports and other documents referred to in clauses (i) and (ii) above being, collectively, the &#147;</font><b><font size=2>Company SEC Reports</font></b><font size=2>&#148;). The Company SEC Reports (i) were prepared in accordance with either the requirements of the Securities Act of 1933, as amended (the &#147;</font><b><font size=2>Securities
Act</font></b><font size=2>&#148;), or the Securities Exchange Act of 1934, as amended (the &#147;</font><b><font size=2>Exchange Act</font></b><font size=2>&#148;), as the case may </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>be, and the rules and regulations promulgated thereunder existing at the time the Company SEC Reports were filed, and (ii) did not, at the time they were filed, or, if amended, as of the date of such amendment, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary is required to file any form, report or other document with the SEC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(b) Each of the consolidated financial statements (including, in each case, any notes thereto) contained in the Company SEC Reports was prepared in accordance with United States generally accepted accounting principles (&#147;</font><b><font SIZE=2>GAAP</font></b><font size=2>&#148;) applied on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and each fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of the Company and its consolidated Subsidiaries as at the respective dates thereof and for the respective periods indicated therein , except as otherwise noted therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments which would not have had, and would not
have, individually or in the aggregate, a Material Adverse Effect) and for pro forma financial information disclosed therein.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(c) Except as and to the extent set forth on the consolidated balance sheet of the Company and the consolidated Subsidiaries as at June 30, 2004, including the notes thereto, neither the Company nor any Subsidiary has any liability or obligation of any nature (whether accrued, absolute, contingent or otherwise), except for liabilities and obligations, incurred in the ordinary course of business consistent with past practice since that date.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(d) The Company has heretofore furnished or made available to the Investor complete and correct copies of all amendments and modifications that have not been filed by the Company with the SEC to all agreements, documents and other instruments that previously had been filed by the Company with the SEC and are currently in effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Absence of Certain Changes or Events</font></u><font size=2>. Since June 30, 2004, except as set  forth in Section 2.8 of the Schedule of Exceptions, or as expressly contemplated by this Agreement, or specifically disclosed in any Company SEC Report filed since such date and prior to the date of this Agreement, (a) the Company and the Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice; (b) there has not been any Material Adverse Effect (c) any declaration, setting aside or payment of any dividend or other distribution in cash, stock or property in respect of Company&#146;s capital stock except as expressly permitted by this Agreement; (d) any split in Company&#146;s capital stock, or any combination, subdivision or reclassification of any of Company&#146;s capital
stock or issuance or authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of Company&#146;s capital stock, except as expressly contemplated by this Agreement; or (e) any change by it in accounting principles, practices or methods except as required by changes in GAAP .</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Absence of Litigation</font></u><font size=2>. Except as specifically disclosed in the Company SEC Reports filed prior to the date of this Agreement, there is no litigation, suit, claim, action, proceeding or investigation (an &#147;</font><b><font size=2>Action</font></b><font size=2>&#148;) pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary, or any property or asset of the Company or any Subsidiary, before any </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Governmental Authority that, individually or in the aggregate, has had or would have a Material Adverse Effect. Neither the Company nor any Subsidiary nor any material property or asset of the Company or any Subsidiary is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the knowledge of the Company, continuing investigation by, any Governmental Authority, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority that would, individually or in the aggregate, have a Material Adverse Effect.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Valid Issuance of Common Stock</font></u><font size=2>. The Common Stock that is being purchased by the Investor hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly authorized, validly issued, fully paid and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and under applicable state and federal securities laws. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Intellectual Property Rights</font></u><font size=2>. Except as disclosed in the Company SEC Reports, each of the Company and the Subsidiaries has sufficient title, right of  use and/or ownership, free and clear of all liens, claims or restrictions, of  all patents, patent rights, trademark rights, service mark rights, trade name rights, copyright rights, trade secrets, customer lists, information, proprietary rights, know-how, designs, computer programs, technical data, inventions and processes and other intellectual property or proprietary rights (collectively, the &#147;</font><b><font size=2>Intellectual Property</font></b><font size=2>&#148;) necessary for its business as now conducted and as proposed to be conducted (including the development, operation and sale of all products sold by it) without any conflict with or infringement of, or
otherwise acting adversely to the rights or claimed rights of others (including without limitation, employees or former employees). Section 2.11 of the Schedule of Exceptions contains a complete list of patents and pending patent applications, trademarks, trademark applications, service marks, service mark applications, copyrights, copyright applications, licenses, trade names and similar rights of the Company and the Subsidiaries.  No procedures have been commenced in any jurisdiction, nor to the Company&#146;s or any Subsidiary&#146;s knowledge, have been threatened, which would result in the cancellation of any issued patent, trademark or service-mark or materially and adversely affect the Intellectual Property.  Except as listed in Section 2.11 of the Schedule of Exception there are no outstanding options, licenses, claims, encumbrances, shared ownership or interest of any kind or agreements of any kind relating to the Intellectual Property, nor is the Company or Subsidiary bound
by or a party to any options, licenses or agreements of any kind with respect to the Intellectual Property of any other person or entity.  Neither the Company nor Subsidiary have reason to believe, or have received any communications alleging that the Company or the Subsidiary have violated or, by conducting its business as proposed, would violate any of the Intellectual Property rights of any other person or entity. The Company and the Subsidiary and any of their respective directors or officers are not aware of any infringement of or conflict with asserted rights of others, with respect to any of Company&#146;s or Subsidiary&#146;s Intellectual Property and proprietary rights, or of any facts, or assertion of any facts, which could reasonably be expected to render any of Company&#146;s or Subsidiary&#146;s intellectual property or proprietary rights invalid or unenforceable. There is no Intellectual Property owned, authored, claimed or licensed  by any third party which is used or
is expected to be used by the Company or any Subsidiary to conduct its business that requires the payment of royalties, compensation, fees or otherwise to a third party. The Company and the Subsidiaries are not aware that any of the Company or its Subsidiaries&#146; employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Company or the applicable Subsidiary or that would conflict with the Company&#146;s or the Subsidiary&#146;s business as proposed to be conducted.  Neither the execution nor delivery of this Agreement, nor the carrying on of the Company&#146;s business by the employees of the Company, nor the carrying on any Subsidiary&#146;s business by the employees of such Subsidiary, nor the conduct of the Company&#146;s or the Subsidiary&#146;s business as proposed, will, to the Company&#146;s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated.  The Company and the Subsidiaries do not believe it is or will be necessary to utilize any inventions of
any of its or any Subsidiary&#146;s employees (or people it or a Subsidiary currently intends to hire) made prior to or outside the scope of their employment by the Company or the Subsidiary. The Company has taken reasonable security measures, including measures against unauthorized disclosure, to protect the secrecy, confidentiality and value of its and any Subsidiary&#146;s Intellectual Property and each of the Company&#146;s officers and employees and Subsidiary&#146;s employees that has access to the Company&#146;s or a Subsidiary&#146;s material Intellectual Property has entered into a non-competition agreement with the Company or the Subsidiary.  At no time in the course of the conception of or reduction into writing of any of the Company&#146;s or a Subsidiary&#146;s Intellectual Property, was any developer, inventor or other contributor to such intellectual property operating under any grants from any governmental entity or agency or private source, or subject to any
employment agreement, or invention assignment or nondisclosure agreement, or other obligation with any third party that could adversely affect or limit any intellectual property owned by or licensed to the Company or a Subsidiary, or which the Company or a Subsidiary otherwise has the right to use.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.12</font></p> </td>
        <td width="91" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Disclosure</font></u><font size=2>.</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(a) The Company is not aware of any facts pertaining to the Company or its Subsidiaries which could have a Material Adverse Effect and which have not been disclosed in this Agreement, the Schedule of Exceptions or the Company SEC Reports filed prior to the date hereof or otherwise disclosed to the Investor by the Company in writing, except that the Company has depleted most of its cash and will be unable to continue operations without raising additional cash.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(b) No representation or warranty of the Company in this Agreement, when taken in conjunction with all the information provided or made available by the Company to the Investor in connection with the transactions contemplated by this Agreement, taken as a whole, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein not misleading.</font></p>

<p style=' margin-bottom:12pt; margin-top:12pt;text-align:justify;'><font size=2>2.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Agreements, Contracts and Commitments</font></u><font size=2>. Except as identified in the Schedule of Exceptions, during the past 12 months, neither the Company nor any of its Subsidiaries has breached, violated or defaulted under, or received notice that it has breached, violated or defaulted under, nor is a breach, violation, or default continuing under, any Material Contract (as defined below) to which the Company or any Subsidiary is a party or by which its is bound. &#147;</font><b><font size=2>Material Contract</font></b><font size=2>&#148; means:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(a) any agreement, contract or commitment containing any covenant limiting the freedom of the Company or any of its Subsidiaries to engage in any material line of business or compete with any person in any material line of business; or</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(b) any &#147;material contract&#148; (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Company and its Subsidiaries.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Taxes</font></u><font size=2>.  For purposes of this Agreement, the following terms have the following definitions: &#147;Returns&#148; means returns, declarations, statements, reports, forms or other documents or information required to be filed with or supplied to any governmental entity having jurisdiction over the assessment, determination, collection or other imposition of any Tax. &#147;Tax&#148; or &#147;Taxes&#148; means all taxes (whether federal, state, local or foreign) based upon or measured by income and any other tax whatsoever, including gross receipts, profits, windfall profits, sales, use, occupation, value added, </font><i><font size=2>ad valorem, </font></i><font size=2>transfer, franchise, withholding, payroll, employment, excise, stamp, premium, capital stock, production, business and occupation, disability, severance, or
real or personal property taxes, fees, or assessments of any kind whatsoever imposed by any Governmental Authority, together with any interest or penalties imposed with respect thereto. The &#147;Code&#148; shall mean the Internal Revenue Code of 1986, as amended.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Except to the extent that any breach, failure or inaccuracy is not reasonably likely to have a Material Adverse Effect on the Company:  (i) all Returns required to be filed by or with respect to the Company or one of its Subsidiaries with respect to any taxable period ending on or prior to the Closing have been duly filed which showed that the Company owed Taxes and all such Returns are complete and accurate and (ii) all Taxes shown to be due on the Returns referred to in clause (i) have been paid in full.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>2.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Employee Matters</font></u><font size=2>. Section 2.17 of the Schedule of Exceptions sets forth an accurate list of any material compensation or benefit plan or agreement (including any employee benefit plan, program, policy, agreement or contract providing benefits to any current or former employee, officer or director of it or any of its Subsidiaries or any beneficiary or dependent thereof that is sponsored or maintained by it or any of its Subsidiaries or to which it or any of its Subsidiaries contributes or is obligated to contribute (other than government-based plans), including any &#147;employee welfare benefit plan&#148; within the meaning of Section 3(1) of ERISA, any &#147;employee pension benefit plan&#148; within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA), all employment or severance
agreements, and any bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance, change of control or fringe benefit plans, programs or policies (any of the foregoing a &#147;</font><b><font size=2>Benefit Plan</font></b><font size=2>&#148;) of the Company and its Subsidiaries.  There do not now exist, and to the Company&#146;s knowledge, there are no existing circumstances that could reasonably be expected to result in, any liabilities (a) under Title IV of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder (&#147;</font><b><font SIZE=2>ERISA</font></b><font size=2>&#148;),  (b) under Section 302 of ERISA, (c) under Sections 412 and 4971 of the Code, (d) for violation of the continuation coverage requirements of Section 601 </font><i><font size=2>et seq</font></i><font size=2>. of ERISA and Section 4980B of the Code or the group health requirements of Sections 9801 </font><i><font
size=2>et seq</font></i><font size=2>. of the Code and Sections 701 </font><i><font size=2>et seq</font></i><font size=2>. of ERISA, and (e) under corresponding or similar provisions of foreign laws or regulations (any such liability a &#147;</font><b><font size=2>Controlled Group Liability</font></b><font size=2>&#148;) to the Company or any of its Subsidiaries except for those that, individually or in the aggregate, would not be reasonably likely to have a Material Adverse Effect on the Company.  No Benefit Plan maintained </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>9</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>or contributed to by the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is required to contribute (any such plan a &#147;</font><b><font size=2>Company&#146;s Benefit Plan</font></b><font size=2>&#148;) is a &#147;multiemployer plan&#148; within the meaning of Section 4001(a)(3) of ERISA.  </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>Except as is not reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on the Company, (A) each of the Company&#146;s Benefit Plans has been operated and administered in all material respects in accordance with applicable Law and administrative rules and regulations of any Governmental Authority, including, but not limited to, ERISA and the Code, and (B) there are no pending or threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, against the Company&#146;s Benefit Plans, any fiduciaries thereof with respect to their duties to the Company&#146;s Benefit Plans or the assets of any of the trusts under any of the Company&#146;s Benefit Plans that could reasonably be expected to result in any material liability of the Company or any of its Subsidiaries to the Pension Benefit Guaranty
Corporation, the U.S. Department of the Treasury, the U.S. Department of Labor or any similar non-U.S. Governmental Entities, any Company&#146;s Benefit Plan, any participant in the Company&#146;s Benefit Plan, or any other party.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>As of the date hereof, neither the Company nor any of its Subsidiaries is a party to any material collective bargaining or other labor union contract applicable to individuals employed by the Company or any of its Subsidiaries, and no such collective bargaining agreement or other labor union contract is being negotiated by the Company or any of its Subsidiaries.  Except as is not reasonably likely to have a Material Adverse Effect on the Company, (A) there is no labor dispute, strike, slowdown or work stoppage against the Company or any of its Subsidiaries pending or, to the Company&#146;s knowledge, threatened against the Company or any of its Subsidiaries and (B)&nbsp;no unfair labor practice or labor charge or complaint has occurred with respect to the Company or any of its Subsidiaries.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3.</font></b></p> </td>
        <td width="485" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Representations and Warranties of the Investor. </font></b><font size=2>&nbsp;</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>The Investor hereby represents and warrants solely with respect to itself, that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Organization and Qualification</font></u><font size=2>. It is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Authority Relative to This Agreement</font></u><font size=2>. The Investor has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Investor and the consummation by the Investor of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Investor are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Investor and, assuming the due authorization, execution and delivery by the Investor, constitutes an Agreement, and upon execution and delivery by
the Company will constitute a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>10</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>laws affecting creditors&#146; rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).</font></p>


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    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.3</font></p> </td>
        <td width="304" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Conflict; Required Filings and Consents</font></u><font size=2>.</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(a) The execution and delivery of this Agreement by the Investor does not, and the performance of this Agreement by the Investor will not, (i) conflict with or violate the organizational documents of the Investor or (ii) conflict with or violate any Law applicable to the Investor.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(b) The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Brokerage</font></u><font size=2>. There are no claims for brokerage commissions, finders&#146; fees or similar compensation in connection with the transactions contemplated by this Agreement for which the Investor will have any liability or responsibility based on any arrangement or agreement binding upon the Investor or any of its subsidiaries.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Purchase Entirely for Own Account</font></u><font size=2>. This Agreement is made with the Investor in reliance upon the Investor&#146;s representation to the Company, which by the Investor&#146;s execution of this Agreement the Investor hereby confirms, that the Investor is an &#147;accredited investor&#148; within the meaning of Regulation D promulgated under the Securities Act, that the Common Stock to be received by the Investor will be acquired for investment for the Investor&#146;s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same other than in a transaction registered under the Securities Act or exempt from, or not subject to, such
registration. By executing this Agreement, the Investor further represents that the Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Common Stock.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Disclosure of Information</font></u><font size=2>. The Investor has been afforded access to such information as it has requested regarding the Company and its Subsidiaries and their respective financial condition, operating results, properties, liabilities, operations and management. The Investor has reviewed all documents filed by the Company with the SEC and which are filed on the EDGAR website. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Restricted Securities</font></u><font size=2>. The Investor understands that the Common Stock it is purchasing are characterized as &#147;restricted securities&#148; under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144 under the Securities Act, as presently in effect (&#147;</font><b><font size=2>Rule 144</font></b><font size=2>&#148;), and understands the resale limitations imposed thereby and by the Securities Act.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Legends</font></u><font size=2>. It is understood that the certificates evidencing the Common Stock may bear the following legend:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>11</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&#147;These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the Company that such registration is not required or unless sold pursuant to Rule 144 of such Act.&#148;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="123" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3.9</font></p> </td>
        <td width="75" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Omitted</font></u><font size=2>.</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is not a &#147;U.S. Person&#148; as defined in Regulation S promulgated under the Securities Act (&#147;</font><b><font size=2>Regulation S</font></b><font size=2>&#148;):</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(i) The Investor was not organized under the laws of any United States jurisdiction, was not formed for the purpose of investing in securities not registered under the Securities Act and is not acquiring the Shares for the account or benefit of any US Person;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(ii) At the time the buy order for this transaction was originated, the Investor was outside the United States;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(iii) All subsequent offers and sales of the Shares will be made (A) outside the United States in compliance with the provisions of Regulation S (including Rule 901 through Rule 905 and the Preliminary Notes thereto) (B) pursuant to registration of the Shares under the Securities Act, or (C) pursuant to an exemption from such registration.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(iv) The Investor agrees not to engage in hedging transactions with regards to such Shares unless with compliance to the Securities Act.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(v) The certificates representing the Shares shall be stamped or otherwise imprinted with the Legend set forth in Section 3.8 to this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>(vi) The Company shall not register any transfer of the Shares not made in accordance with Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is a U.S. Person, the Investor is an Accredited Investor as defined by Regulation D Rule 501 and has signed and delivered to the Company an Accredited Investor Questionnaire in the form attached hereto as </font><b><font size=2>Exhibit A</font></b><font size=2>. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>3.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Investor is not a U.S. Person nor a resident of Israel, the Investor warrants and represents that the issuance of the Common Stock to the Investor is exempt from the prospectus and registration requirements of the laws of the jurisdiction of residence of the Investor and that the Company is not required to make any filings or take other steps in such jurisdiction to validly and lawfully issue the securities contemplated by this Agreement to the Investor. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>12</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.</font></b></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>CONDITIONS OF THE INVESTOR&#146;S OBLIGATION TO AFFECT THE CLOSING. </font></b><font size=2>&nbsp;</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>The obligations of the Investor to consummate the transactions contemplated hereby are subject to the fulfillment or waiver (where permissible) on or before the Closing of each of the following conditions:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Representations and Warranties</font></u><font size=2>. The representations and warranties of the Company contained in Section 2 shall be true and correct as of the date hereof and as of the date of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Performance</font></u><font size=2>. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Compliance Certificate</font></u><font size=2>. The President of the Company shall have delivered to the Investor at the Closing a certificate stating that the conditions specified in Sections 4.1 and 4.2 have been fulfilled. In addition, the Compliance Certificate shall state the number of shares of the outstanding Common Stock of the Company immediately prior to the Closing.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Incumbency Certificate</font></u><font size=2>. The certificate of the Secretary of the Company certifying the names and signatures of the officers of the Company authorized to sign this Agreement and all other documents to be delivered hereunder.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Qualifications</font></u><font size=2>. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall have been duly obtained and effective as of the Closing.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Proceedings and Documents</font></u><font size=2>. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents incident to the Closing shall be reasonably satisfactory in form and substance to the Investor&#146;s counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Takeover Statute</font></u><font size=2>. The Company shall take all necessary steps such  that no Takeover Statute, and no anti-takeover provision in the amended certificate of incorporation or by-laws of the Company is, or will be, applicable to the transactions contemplated by this Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>No Material Adverse Effect</font></u><font size=2>. No event or events shall have occurred, or be reasonably likely to occur, which individually or in the aggregate, have or could have, a Material Adverse Effect.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>13</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>5.</font></b></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>CONDITIONS OF THE COMPANY&#146;S OBLIGATION TO AFFECT THE CLOSING. </font></b><font size=2>&nbsp;</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>The obligations of the Company to consummate the transactions contemplated hereby are subject to the fulfillment or waiver (where permissible) on or before the Closing of each of the following conditions, with respect to the Investor:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Representations and Warranties</font></u><font size=2>. The representations and warranties of the Investor contained in Section 3 shall be true and correct as of the date hereof and as of the date of Closing with the same effect as though such representations and warranties had been made on and as of the Closing.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Performance</font></u><font size=2>. The Investor shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Proceedings and Documents</font></u><font size=2>. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents incident to the Closing shall be reasonably satisfactory in form and substance to the Company&#146;s counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request.</font></p>


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        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6.</font></b></p> </td>
        <td width="164" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>Miscellaneous.</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in; text-indent:-1in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Survival of Representations, Warranties</font></u><font size=2>. The representations, warranties and other agreements of each of the Company and the Investor, respectively, included or provided for in this Agreement, shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Company or the Investor.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Successors and Assigns</font></u><font size=2>. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of, and be binding upon the respective successors and assigns of the parties (including transferees of any Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Governing Law; Venue</font></u><font size=2>. This Agreement shall be governed by and construed under the laws of the State of Israel as applied to agreements executed in and to be performed entirely within Israel. In any event of dispute not amicably resolved within 10 days of the written notice of any party, the parties hereby irrevocably submit to the jurisdiction of the courts of Israel solely in respect of the interpretation and enforcement of the provisions of this Agreement and in respect of the transactions contemplated hereby and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement may not be enforced in or by such courts, and the parties irrevocably agree that all claims with respect to such action or </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>14</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>proceeding shall be heard and determined in such a court.  The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in 6.6 (Notices), or in such other manner as may be permitted by applicable law, shall be valid and sufficient service thereof.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Counterparts</font></u><font size=2>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts executed and delivered via any form of electronic transmission shall be deemed originals.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Titles and Subtitles</font></u><font size=2>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Notices</font></u><font size=2>. Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of the Investor, to the address of the Investor as set forth on the signature page hereto or such other address of the Investor as shall be designated in writing from time to time by the Investor.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of
such facsimile.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Expenses</font></u><font size=2>. Irrespective of whether any Closing is effected, the Company shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney&#146;s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Amendments and Waivers</font></u><font size=2>. Any term of this Agreement may be amended only in writing signed by, or on behalf of, the Company and the holders of a majority of the Common Stock issuable or issued upon conversion of the Shares. At any time prior to the Closing, any party hereto may (a) extend the time for the performance of any obligation or other act of any other party hereto, (b) waive any inaccuracy in the representations and warranties of any other party contained herein or in any document delivered pursuant hereto and (c) waive compliance with any agreement of any other party or any condition to its own obligations contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. Any waiver of any term or condition shall
not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any party to assert any of its rights shall not constitute a waiver of any of such rights.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Severability</font></u><font size=2>. If any term or provision of this Agreement is held to be unenforceable under applicable Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner adverse to any party. Upon such determination that any </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>15</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Publicity</font></u><font size=2>. Except as may be required by the Company pursuant to its obligations as a reporting issuer, no party hereto shall issue any press release or otherwise make any statements to any third party with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other party, which consent shall not be unreasonably withheld, and the parties shall cooperate as to the timing and contents of any such press release or public announcement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>6.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Entire Agreement</font></u><font size=2>. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>16</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>SIGNATURE PAGE</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>TO</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font SIZE=2>PURCHASE AGREEMENT</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.1in;text-align:center;'><font size=2>Dated March ______, 2005 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>IF the PURCHASER is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY, TRUST or OTHER ENTITY, please complete the following:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>IN WITNESS WHEREOF, the undersigned has executed this Agreement this ______ day of March, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="643" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Number of Shares to be Purchased:</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>10,000</font></u>                                                    </p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ERETZ HACARMEL LTD.</font></b></u>                                                                   <font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Print Full Legal Name of </font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Partnership, Company, Limited</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liability Company, Trust or Other Entity</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By: </font>                                                                                                                                                                                                                                                                        <font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:60.75pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Authorized Signatory)</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name: </font>                                                                                                                                                                                                                                                    <u></u></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title: </font>                                                                                                                                                                                                                                                               <u></u></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Address  including State of residence:</font></p>
<p style='margin-left:0pt;text-indent:3.0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fax Number: </font>                                                                                                                                                                                                            <u></u></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Taxpayer Identification Number: </font>                                                                                                       <u></u></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="187" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date and State of Incorporation or Organization: </font>                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        </p> </td> </tr>
    <tr>
        <td width="187" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="187" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Date on which Taxable Year Ends:</font>                                                                                                                                                                                                                              </p> </td> </tr>
    <tr>
        <td width="187" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="322" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>E-mail Address: ________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>ACCEPTED AND AGREED:</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font
size=2>By:</font>                            <font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:_______________________________</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font>                   <font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Dated:</font>                                                                                                                                                                                                                                                        </p> </td> </tr>
    <tr>
        <td width="187" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="187" ></td>

        <td width="132" ></td>

        <td width="2" ></td>

        <td width="322" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.5in;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>17</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><font SIZE=2>SCHEDULE OF EXCEPTIONS</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.1(b)  Pluristem, Inc., an Israel company</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="91" style=' margin-left:72.15pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.8</font></p> </td>
        <td width="43" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Nil.</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Trademark on the word PluriX&#148; obtained June 22, 2003; and exclusive rights to the technology covered by International Application published under the Patent Cooperation Treaty publication number WO 00/46349 entitled &#147;Method and Apparatus for Maintenance and Expansion of Hematopoietic stem cells and/or Progenitor Cells&#148;. </font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.14 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registration Rights for 15,000,000 shares and 15,000,000 warrants pursuant to a private placement issued in January, 2005; Registration Rights for 3 million shares and 3,300,000 warrants from 2004, already registered on form SB-2; registration rights for the CEO&#146;s shares to be issued pursuant to a bonus for patent registration; and registration rights for the finder of this private placement who will get shares and warrants.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.15</font></p> </td>
        <td width="43" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Nil.</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>2.17</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Nil.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>18</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p STYLE=' MARGIN-BOTTOM:12PT; MARGIN-TOP:0PT; TEXT-INDENT:1IN;TEXT-ALIGN:CENTER;'><B><FONT SIZE=2>EXHIBIT A</FONT></B></P>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:center;'><u><b><font SIZE=2>ACCREDITED INVESTOR QUESTIONNAIRE</font></b></u></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><i><font SIZE=2>ONLY U.S. SUBSCRIBERS NEED TO SIGN THIS</font></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>All capitalised terms herein, unless otherwise defined, have the meanings ascribed thereto in the Subscription Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>This Questionnaire is for use by each Subscriber who is a US person (as that term is defined Regulation S of the United States Securities Act of 1933 (the &#147;</font><b><font size=2>1933 Act</font></b><font size=2>&#148;)) and has indicated an interest in purchasing Shares of Pluristem Life Systems, Inc. (the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;).  The purpose of this Questionnaire is to assure the Company that each Subscriber will meet the standards imposed by the 1933 Act and the appropriate exemptions of applicable state securities laws.  The Company will rely on the information contained in this Questionnaire for the purposes of such determination.  The Shares will not be registered under the 1933 Act in reliance upon the exemption from registration afforded by Section 3(b) and/or Section 4(2) and Regulation D of the 1933 Act.  This Questionnaire is not
an offer of the Shares or any other securities of the Company in any state other than those specifically authorized by the Company.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>All information contained in this Questionnaire will be treated as confidential.  However, by signing and returning this Questionnaire, each Subscriber agrees that, if necessary, this Questionnaire may be presented to such parties as the Company deems appropriate to establish the availability, under the 1933 Act or applicable state securities law, of exemption from registration in connection with the sale of the Shares hereunder.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="3" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Subscriber covenants, represents and warrants to the Company that it satisfies one or more of the categories of &#147;Accredited Investors&#148;, as defined by Regulation D promulgated under the 1933 Act, as indicated below:  (Please initial in the space provide those categories, if any, of an &#147;Accredited Investor&#148; which the Subscriber satisfies)</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 1</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of US&nbsp;$5,000,000;</font></p> </td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="60" ></td>

        <td width="84" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in; text-indent:-0.88in;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 2</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A natural person whose individual net worth, or joint net worth with that person&#146;s spouse, on the date of purchase exceeds US&nbsp;$1,000,000;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 3</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A natural person who had an individual income in excess of US&nbsp;$200,000 in each of the two most recent years or joint income with that person&#146;s spouse in excess of US&nbsp;$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 4</font></p> </td>
        <td  valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A &#147;bank&#148; as defined under Section&nbsp;(3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section&nbsp;3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to Section&nbsp;15 of the </font><i><font size=2>Securities Exchange Act of 1934</font></i><font size=2> (United </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:2.5in;text-align:justify;'><font size=2>States); an insurance company as defined in Section&nbsp;2(13) of the 1933 Act; an investment company registered under the </font><i><font size=2>Investment Company Act of 1940</font></i><font size=2> (United States) or a business development company as defined in Section&nbsp;2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section&nbsp;301(c) or (d) of the </font><i><font size=2>Small Business Investment Act of 1958</font></i><font size=2> (United States); a plan with total assets in excess of $5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan within the meaning of the </font><i><font size=2>Employee Retirement Income Security Act of 1974</font></i><font
size=2> (United States) whose investment decisions are made by a plan fiduciary, as defined in Section&nbsp;3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 5</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A private business development company as defined in Section&nbsp;202(a)(22) of the </font><i><font size=2>Investment Advisers Act of 1940</font></i><font size=2> (United States);</font></p> </td> </tr>
    <tr >
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 6</font></p> </td>
        <td width="325" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A director or executive officer of the Company;</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 7</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule&nbsp;506(b)(2)(ii) under the 1933 Act;</font></p> </td> </tr>
    <tr>
        <td width="84" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 8</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories;</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:1in; text-indent:1in;text-align:justify;'><font size=2>Note that prospective Subscribers claiming to satisfy one of the above categories of Accredited Investor may be required to supply the Company with a balance sheet, prior years&#146; federal income tax returns or other appropriate documentation to verify and substantiate the Subscriber&#146;s status as an Accredited Investor.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td width="544" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>If the Subscriber is an entity which initialled Category 8 in reliance upon the Accredited Investor categories above, state the name, address, total personal income from all sources for the previous calendar year, and the net worth (exclusive of home, home furnishings and personal automobiles) for each equity owner of the said entity: </font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>____________________________________________________________________</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="2" valign=top style='padding:0in 0in 12.0pt 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>____________________________________________________________________</font></p> </td> </tr></table>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>The Subscriber hereby certifies that the information contained in this Questionnaire is complete and accurate and the Subscriber will notify the Company promptly of any change in </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:justify;'><font size=2>any such information.  If this Questionnaire is being completed on behalf of a corporation, partnership, trust or estate, the person executing on behalf of the Subscriber represents that it has the authority to execute and deliver this Questionnaire on behalf of such entity.</font></p>

<p style=' margin-bottom:18pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the ______ day of March, 2005.</font></p>


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            <p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><font SIZE=2>ERETZ HACARMEL LTD.</font></p>
<p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Per:</font>                                                                                                                                                                                                                                                                        <font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>Authorized Signatory</font></p> </td>
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            <p style='margin-left:12.6pt;text-indent:0in;text-align:left;margin-top:0pt;margin-bottom:12pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font SIZE=2>D/AZS/687905.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

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<DESCRIPTION>EXHIBIT 10.13
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font size=2>Exhibit 10.13</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font SIZE=2>NONE OF THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE 1933 ACT), OR ANY U.S. STATE SECURITIES LAWS, AND UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><b><font SIZE=2>WARRANT AGREEMENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(Reg S or US Accredited Subscriber) </font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>THIS WARRANT AGREEMENT (the &#147;Agreement&#148;) is made as of the 3rd day of March, 2005 by and between Pluristem Life Systems, Inc. (the &#147;Company&#148;), whose business address is at Matam Centre, Building 20, Haifa, 31905 Israel, and Ori Ackerman (the &#147;Consultant&#148;), whose address is _______________________, Israel.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><b><font SIZE=2>RECITALS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:0.97in;text-align:justify;'><b><font SIZE=2>WHEREAS </font></b><font size=2>in consideration for certain corporate finance advisory services (the &#147;Services&#148;) provided to the Company by the Consultant, the Company has agreed to issue to the Consultant 440,000 share purchase warrants, entitling the Consultant to purchase a total of 440,000 shares in the capital of the Company.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOW, THEREFORE,</font></b><font size=2> the parties hereto agree as follows:</font><b></b></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ISSUANCE OF THE WARRANTS</font></b></u></p> </td>
        <td  width="172">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="211" ></td>

        <td width="186" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration for the Consultant having provided the Services to the Company, the Company hereby grants to the Consultant 440,000 common share purchase warrants, in the form as provided by the Company (each a &#147;Warrant&#148; and collectively, the &#147;Warrants&#148;), each Warrant entitling the Consultant to purchase one common share in the capital of the Company (each a &#147;Warrant Share&#148;) at an exercise price of U.S. $2.50 per Warrant Share on or before November 30, 2007, at which date any unexercised Warrants will expire.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Warrants and the Warrant Shares may be collectively referred to in this Agreement as the &#147;Securities&#148;.</font></p>


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        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2.</font></b></p> </td>
        <td width="276" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>DELIVERIES BY THE CONSULTANT</font></b></u></p> </td>
        <td  width="269">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.1</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Consultant must complete, sign and return to the Company the following documents:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(a) two (2) executed copies of this Agreement; and</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(b) if a U.S. resident, a Prospective Investor Suitability Questionnaire in the form attached as Schedule &#147;A&#148; of this Agreement (the &#147;Questionnaire&#148;).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 2 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>2.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant shall complete, sign and return to the Company as soon as possible, on request by the Company, any documents, questionnaires, notices and undertakings as may be required by regulatory authorities, stock exchanges and applicable law.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3.</font></b></p> </td>
        <td width="209" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>EXERCISE OF WARRANTS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The right to purchase Warrant Shares conferred by the Warrants may be exercised by the Consultant by delivering to the Company a duly completed and executed subscription (the &#147;Subscription Form&#148;) in the form as provided by the Company and a bank draft or certified cheque payable to or to the order of the Company for the aggregate exercise price in respect of the Warrant Shares subscribed for in lawful money of the United States of America, delivered to the Company at the address specified in Section 18.1 or such other address as the Company may advise the Consultant in writing pursuant to Section 18.1.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant agrees to complete, sign and return to the Company on request by the Company, any documents, questionnaires, notices and undertakings as may be required by regulatory authorities, stock exchanges and applicable law, or as the Company may deem reasonably necessary for the purpose of ensuring compliance with applicable securities laws in connection with the issuance of any shares upon the exercise of any Warrants. </font></p>


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    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.</font></b></p> </td>
        <td width="295" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>EFFECT OF EXERCISE OF WARRANTS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to applicable securities laws, upon exercise of any Warrants and payment of the applicable exercise price, the Warrant Shares so subscribed for will be deemed to have been issued and the Consultant will be deemed to have become the holder of record of such Warrant Shares on the date of such exercise and payment.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to applicable securities laws, within five business days after exercise of any Warrants and payment as aforesaid, the Company will forthwith cause to be sent to the Consultant a certificate representing the Warrant Shares so subscribed for, at the address specified in such Subscription Form.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>5.</font></b></p> </td>
        <td width="465" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exercise price and the number of Warrant Shares deliverable upon the exercise of the Warrants will be subject to adjustment in the event and in the manner following:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(a) If and whenever the common shares of the Company at any time outstanding are subdivided into a greater or consolidated into a lesser number of shares the exercise price will be decreased or increased proportionately as the case may be; and upon any such subdivision or consolidation the number of Warrant Shares deliverable upon the exercise of the Warrants will be increased or decreased proportionately as the case may be.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(b) In case of any capital reorganization or of any reclassification of the capital of the Company or in the case of the consolidation, merger or amalgamation of the Company with or into any other company, trust, partnership, or other entity, or a sale or conveyance of the property and assets of the Company as an entirety or substantially as an entirety (hereinafter collectively referred to as a &#147;Reorganization&#148;), each Warrant will after such Reorganization confer the right to purchase the number of shares or other securities of the Company (or of the company resulting from such Reorganization) which the Consultant would have been entitled to upon Reorganization if the Consultant had been a shareholder at the time of such Reorganization.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 3 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(c) In any such case, if necessary, appropriate adjustments will be made in the application of the provisions of this Section 5 relating to the rights and interest thereafter of the Consultant, as the holder of the Warrants, so that the provisions of this Section 5 will be made applicable as nearly as reasonably possible to any shares or other securities deliverable after the Reorganization on the exercise of the Warrants.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(d) The subdivision or consolidation of shares at any time outstanding into a greater or lesser number of shares (whether with or without par value) will not be deemed to be a Reorganization for the purposes of this Section 5.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(e) The adjustments provided for in this Section 5 are cumulative and will become effective immediately after the record date or, if no record date is fixed, the effective date of the event which results in such adjustments.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any questions will at any time arise with respect to the exercise price or any adjustment provided for in Section 5.1, such questions will be conclusively determined by the Company&#146;s auditors, or, if they decline to so act any other firm of certified public accountants that the Company may designate and who will have access to all appropriate records and such determination will be binding upon the Company and the holder of the Warrants.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6.</font></b></p> </td>
        <td width="404" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>COVENANT BY THE COMPANY TO RESERVE SHARES</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will reserve and there will remain unissued out of its authorized capital a sufficient number of common shares to satisfy the rights of purchase provided for herein.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>7.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ACKNOWLEDGEMENTS OF THE CONSULTANT</font></b></u></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.1</font></p> </td>
        <td width="292" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Consultant acknowledges and agrees that:</font></p> </td>
        <td  width="66">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(a) none of the Securities have been registered under the 1933 Act, or under any state securities or &#147;blue sky&#148; laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or to U.S. Persons, as that term is defined in Regulation S under the 1933 Act (&#147;Regulation S&#148;), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable state securities laws;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(b) the Consultant has received and carefully read this Agreement, and has carefully reviewed all of the Company&#146;s filings with the Securities and Exchange Commission (collectively the &#147;Company Information&#148;);</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(c) the decision to execute this Agreement and acquire the Securities pursuant to this Agreement has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company and such decision is based entirely upon a review of the Company Information and any other public information which has been filed by the Company with the Securities and Exchange Commission in compliance, or intended compliance, with applicable securities legislation.  If the Company has presented a business plan to the Consultant, the Consultant acknowledges that the business plan may not be achieved or be achievable;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(d) the Consultant and the Consultant&#146;s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the issuance of the Securities hereunder, and to obtain additional information, to the extent possessed or obtainable </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 4 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>without unreasonable effort or expense, necessary to verify the accuracy of the information contained in the Company Information;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(e) the books and records of the Company were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Consultant during reasonable business hours at its principal place of business and that all documents, records and books in connection with the issuance of the Securities hereunder have been made available for inspection by the Consultant, the Consultant&#146;s attorney and/or advisor(s);</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(f) the Company is entitled to rely on the representations and warranties and the statements and answers of the Consultant contained in this Agreement and the Questionnaire, and the Consultant will hold harmless the Company from any loss or damage it may suffer as a result of the Consultant&#146;s failure to correctly complete this Agreement or the Questionnaire;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(g) it will indemnify and hold harmless the Company and, where applicable, its respective directors, officers, employees, agents, advisors and shareholders from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Consultant contained herein, the Questionnaire or in any other document furnished by the Consultant to the Company in connection herewith being untrue in any material respect or any breach or failure by the Consultant to comply with any covenant or agreement made by the Consultant to the Company in connection therewith;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(h) the issuance of the Securities to the Consultant will not be completed if it would be unlawful;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(i) it has been advised to consult its own legal, tax and other advisors with respect to the merits and risks of an investment in the Securities and the Company, and with respect to applicable resale restrictions and it is solely responsible (and the Company is not in any way responsible) for compliance with applicable resale restrictions;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(j) none of the Securities are listed on any stock exchange or automated dealer quotation system and no representation has been made to the Consultant that any of the Securities will become listed on any stock exchange or automated dealer quotation system, except that currently certain market makers make market in the common shares of the Company on the Over-the-Counter Bulletin Board service of the National Association of Shares Dealers Inc.; </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(k) no documents in connection with the sale of the Securities hereunder have been reviewed by the Securities and Exchange Commission or any state securities administrators; and</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(l) there is no government or other insurance covering any of the Securities.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CONSULTANT</font></b></u></p> </td> </tr>
    <tr >
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.1</font></p> </td>
        <td width="539" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Consultant hereby represents and warrants to and covenants with the Company that:</font></p> </td>
        <td  width="30">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(a) the Consultant has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 5 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(b) the Consultant (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the Securities for an indefinite period of time;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(c) the Consultant is aware that an investment in the Company is speculative and involves certain risks, including the possible loss of the investment and the Consultant has carefully read and considered the matters set forth under the heading &#147;Risk Factors&#148; appearing in the Company Information;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(d) the Consultant has made an independent examination and investigation of an investment in the Securities and the Company and has depended on the advice of its legal and financial advisors and agrees that the Company will not be responsible in anyway whatsoever for the Consultant&#146;s decision to invest in the Securities and the Company;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(e) it has the requisite knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in the Securities and the Company;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(f) it is acquiring the Securities as principal for its own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such Securities; </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(g) the entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or the constating documents of, the Consultant or of any agreement, written or oral, to which the Consultant may be a party or by which the Consultant is or may be bound;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(h) the Consultant has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Consultant enforceable against the Consultant;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(i) it is able to fend for itself with respect to its investment in the Securities and has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(j) the Consultant is not acquiring the Securities as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(k) no person has made to the Consultant any written or oral representations:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(i) that any person will resell or repurchase any of the Securities;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(ii) that any person will refund the purchase price of any of the Securities;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(iii) as to the future price or value of any of the Securities; or</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(iv) that any of the Securities will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Securities of the Company on any stock exchange or automated dealer </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 6 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>quotation system (except that currently certain market makers make market in the common shares of the Company on the Over-the-Counter Bulletin Board service of the National Association of Shares Dealers Inc.); and </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(l) the Consultant is not resident in British Columbia and is not acquiring the Securities for such residents.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In this Agreement, the term &#147;U.S. Person&#148; shall have the meaning ascribed thereto in Regulation&nbsp;S and for the purpose of the Subscription includes any person in the United States.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>9.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font SIZE=2>REPRESENTATIONS AND WARRANTIES WILL BE RELIED UPON BY THE COMPANY</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant acknowledges that the representations and warranties contained herein are made by it with the intention that they may be relied upon by the Company and its legal counsel in determining the Consultant&#146;s eligibility to purchase the Securities under applicable securities legislation. The Consultant further agrees that by accepting delivery of the certificates representing the Securities on the Closing Date, it will be representing and warranting that the representations and warranties contained herein are true and correct as at the Closing Date with the same force and effect as if they had been made by the Consultant at the Closing Date and that they will survive the purchase by the Consultant of the Securities and will continue in full force and effect notwithstanding any subsequent disposition by the Consultant of any of the Securities.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10.</font></b></p> </td>
        <td width="194" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>RESALE RESTRICTIONS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant acknowledges that any resale of the Securities will be subject to resale restrictions contained in the securities legislation applicable to the Consultant.  The Securities may not be offered or sold in the United States unless registered in accordance with federal securities laws and all applicable state securities laws or exemptions from such registration requirements are available.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>11</font></b></p> </td>
        <td width="297" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>LEGENDING OF SUBJECT SECURITIES</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>11.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant hereby acknowledges that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing any of the Securities will bear a legend in substantially the following form:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE &#147;SECURITIES ACT&#148;), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>11.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>12.</font></b></p> </td>
        <td width="69" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>COSTS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 7 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>12.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant acknowledges and agrees that all costs and expenses incurred by the Consultant (including any fees and disbursements of any special counsel retained by the Consultant) relating to the acquisition of the Securities shall be borne by the Consultant.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>13.</font></b></p> </td>
        <td width="151" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>GOVERNING LAW</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>13.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement is governed by the laws of the State of New York.  The Consultant irrevocably attorns to the jurisdiction of the State of New York.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>14.</font></b></p> </td>
        <td width="97" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>SURVIVAL</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the acquisition of the Securities by the Consultant pursuant hereto.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>15.</font></b></p> </td>
        <td width="120" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ASSIGNMENT</font></b></u></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.1</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>This Agreement and the Warrants granted hereunder are not transferable or assignable.</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>16.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>SEVERABILITY</font></b></u></p> </td>
        <td  width="399">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="130" ></td>

        <td width="12" ></td>

        <td width="432" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>16.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>17.</font></b></p> </td>
        <td width="177" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ENTIRE AGREEMENT</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>17.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Agreement contains the entire agreement between the parties with respect to the issuance of the Securities and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by the Company or by anyone else.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>18.</font></b></p> </td>
        <td width="87" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>NOTICES</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>18.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted to be given to any of the parties to this Agreement will be in writing and may be given by prepaid registered post, electronic facsimile transmission or other means of electronic communication capable of producing a printed copy to the address of such party first above stated or such other address as any party may specify by notice in writing to the other parties, and any such notice will be deemed to have been given and received by the party to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time of mailing or between the time of mailing and the third business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not
be effectively given until actually delivered.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>19.</font></b></p> </td>
        <td width="142" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>COUNTERPARTS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>19.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 8 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>20.</font></b></p> </td>
        <td width="176" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ELECTRONIC MEANS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>20.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date first above mentioned.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font SIZE=2>IN WITNESS WHEREOF</font></b><font size=2> each of the parties has duly executed this Agreement as of the date first above mentioned. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Per: __________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Authorized Signatory</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>SIGNED, SEALED and DELIVERED by ORI ACKERMAN in the presence of:</font><br> <br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <font size=2>Signature</font><br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <font size=2>Print Name</font><br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <font size=2>Address</font><br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <br> <u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><br> <font size=2>Occupation</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font></p> </td>
        <td width="307" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.05in;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><br> <br> <br> <br> <br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <b><font SIZE=2>ORI ACKERMAN</font></b><b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS WARRANT TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="72" style=' margin-left:5.0in;border-collapse:collapse'>
    <tr>
        <td width="72" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>No. 178</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>WARRANT TO PURCHASE COMMON STOCK</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>OF</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC. </font></b><font size=2>(the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>VOID AFTER 17:00 p.m. N.Y. Time</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>on the last day of the Term (as set forth in Section 1 below)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This is to certify that, for value received, </font><b><font size=2>Ori Ackerman</font></b><font size=2>, or his or her registered assigns (the &#147;</font><b><font size=2>Holder</font></b><font size=2>&#148;) is entitled to purchase, subject to the provisions of this Warrant, from the Company an aggregate of 440,000 fully paid and non-assessable shares of the Common Stock, as adjusted from time to time as provided below (&#147;</font><b><font size=2>Common Stock</font></b><font size=2>&#148; and such shares, the &#147;</font><b><font size=2>Warrant Shares</font></b><font size=2>&#148;) of the Company, as constituted on the date hereof (the &#147;</font><b><font size=2>Warrant Issue Date</font></b><font size=2>&#148;), upon surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, at the principal office of the Company referred to below, and
simultaneous payment therefor in lawful money of the United States, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in; text-indent:-0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Term of Warrant</font></u><font size=2>. Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time during the term commencing on the Warrant Issue Date and ending November 30, 2007 (the &#147;Term&#148;), and shall be void thereafter. </font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise Price</font></u><font size=2>.  The purchase price at which this Warrant may be exercised shall be $2.50 per Warrant Share, as adjusted from time to time pursuant to Section 9 hereof (the &#147;</font><b><font size=2>Exercise Price</font></b><font size=2>&#148;).</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise of Warrant</font></u></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Manner of Exercise</font></u><font size=2>.  This Warrant is exercisable by the Holder in whole or in part, at any time and from time to time, during the Term, by the surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, to the Secretary of the Company at the office of the </font></p> </td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="108" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 2 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), provided that the Holder shall also deliver to the Company, concurrent with such surrender, a check payable in lawful money of the United States for the aggregate Exercise Price for the Warrant Shares being purchased.</font></p>


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        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.2</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date.  As promptly as practicable on or after such date and in any event within thirty (30) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the remaining number of shares for which this
Warrant may then be exercised.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Fractional Shares or Scrip</font></u><font size=2>.  No fractional shares or scrip representing fractional share shall be issued upon the exercise of this Warrant.  In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall round up such fraction to the nearest whole number.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Replacement of Warrant.</font></u><font size=2>  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of loss, theft, or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Compliance with Securities Laws</font></u><font size=2>.  This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee.</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.1</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Holder of this Warrant, by acceptance hereof, acknowledges that (i) this Warrant and the Warrant Shares to be issued upon exercise hereof are being acquired solely for the Holder&#146;s own account and not as an agent or nominee for any other party, and for investment; (ii) the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Act, any state securities laws or any applicable securities law of foreign jurisdictions, or any rules or regulations promulgated thereunder; and (iii) such Holder is either an &#147;accredited investor&#148; within the meaning of Securities and Exchange Commission Rule 501 of Regulation&nbsp;D, as presently in effect or is not a U.S. Person,
as defined by Regulation S promulgated under the Act.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 3 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.5in;border-collapse: collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.2</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unless the Warrant Shares have been registered under the Act, all shares issuable hereunder shall bear the following legend:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1.5in;text-align:justify;'><font size=2>THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE &#147;SECURITIES ACT&#148;), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.</font></p>


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    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reservation of Stock.</font></u><font size=2>  The Company covenants that during the Term this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of common Stock upon the exercise of this Warrant and, from time to time, will take all steps necessary to provide sufficient reserves of shares of the Common Stock issuable upon the exercise of the Warrant.  The Company further covenants that all Warrant Shares will be duly authorized, validly issued, fully paid and nonassessable, and will be free from all taxes, liens and preemptive rights in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein).  The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares issued upon the exercise of this Warrant. </font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Amendments and Waivers</font></u><font size=2>.  This Warrant is being issued as one of a series of warrants issued by the Company on the date hereof and, accordingly, any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the holder of this Warrant.  Any amendment or waiver effected in such manner shall be effective to modify or waive the provisions of this Warrant. No waivers of, or exceptions to any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments</font></u><font size=2>.  The Exercise Price and the number of Warrant Shares purchasable hereunder are subject to adjustment from time to time during the Term of this Warrant as follows:</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.1</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reclassification.</font></u><font size=2> If the Company at any time while this Warrant, or any portion thereof, remains outstanding and un-expired shall, by reorganization or reclassification of securities or otherwise (including in connection with any anti-dilution adjustments), change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="48" style=' margin-left:223.5pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 4 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such reorganization or reclassification or other change and the Exercise Price then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted (provided the aggregate purchase price shall remain the same) such that this Warrant shall be exercisable into, in lieu of the number of Warrant Shares which the Holder would otherwise have been entitled to receive, a number of shares of such other class or classes of stock that would have been subject to receipt by the Holder had the Holder exercised the Warrant immediately before that change. In
any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.5in;border-collapse: collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.2</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Split, Subdivision or Combination of Shares</font></u><font size=2>.  If the Company at any time while this Warrant, or any portion hereof, remains outstanding and un-expired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased and the number of securities issuable upon exercise proportionately increased in the case of a split or subdivision or the Exercise Price of such securities shall be proportionately increased and the number of securities issuable upon exercise proportionately decreased in the case of a combination. Any adjustment under this Section&nbsp;9.2 shall become effective concurrently with the subdivision or combination becomes
effective.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.3</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments for Dividends in Stock or Other Securities or Property</font></u><font size=2>.  If, while this Warrant, or any portion hereof, remains outstanding and un-expired, the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property of the Company by way of dividend or otherwise, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon the exercise of this Warrant, and without payment of any additional consideration thereof, the amount of such other or additional stock or other
securities or property as aforesaid of the Company which such Holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 9. Any adjustment under this Section&nbsp;9.3 shall become effective as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 5 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.4</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Certificate as to Adjustments</font></u><font size=2>.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 9, the Company shall, upon the written request of any holder of this Warrant, furnish or cause to be furnished to such holder a certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.5</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Impairment</font></u><font size=2>.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all of the provisions of this Section 9 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of this Warrant against impairment.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Governing Law</font></u><font size=2>.  This Warrant and the legal relations between the parties arising hereunder shall be governed by and interpreted in accordance with the laws of the State of Israel without regard to its conflict of laws principles. The parties hereto agree to submit to the nonexclusive jurisdiction of the federal and state courts of the State of Israel with respect to the breach or interpretation of this Warrant or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Entire Agreement, Successors and Assigns. </font></u><font size=2> This Warrant constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assign as a matter law, heirs, executors and administrators of the parties hereto.  The Holder may not assign, distribute or otherwise transfer this Warrant without the consent of the Company (and in such event subject to the provisions of Section 6 herein).</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Notices, Etc</font></u><font size=2>.  (a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of any Holder, to the address of such Holder as set forth on the signature page hereto or such other address of such Holder as shall be designated in writing from time to time by such Holder.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States or Israeli mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have
been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of such facsimile.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 6 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company shall give the Holder a written notice of impending transaction (including, without limitation, any reorganization, merger or consolidation, or sale or exchange of capital stock) as a result of which the stockholders of the Company immediately prior to such transaction receive cash, securities of a publicly traded company, or any other assets, or a combination thereof, as consideration, not later than twenty (20) business days prior to the stockholders&#146; meeting called to approve such transaction, or twenty (20) business days prior to the closing of such transaction, whichever is earlier, and shall also notify the Holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending
transaction and the provisions of this Warrant in connection therewith, and the Company shall thereafter give the Holder prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) business days after the Company has given the first notice provided for herein or sooner than twenty (20) business days after the Company has given notice of any material changes provided for herein.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Delays or Omissions</font></u><font size=2>.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Warrant, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Subject to Section 8, any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Warrant, or any waiver on the part of any Holder of any provisions or conditions of this
Warrant, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Warrant or by law or otherwise afforded to any holder, shall be cumulative and not alternative.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Expenses</font></u><font size=2>.  Except as otherwise provided herein, the Company and the Holder shall each bear its own expenses incurred on its behalf with respect to this Warrant and the transactions contemplated hereby.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Severability</font></u><font size=2>.  In the event that any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Warrant shall continue in full force and effect without said provision, and such provision shall be given effect to the extent legally possible.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Titles and Subtitles</font></u><font size=2>.  The titles and subtitles used in this Warrant are used for convenience only and are not considered in construing or interpreting this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>17.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Survival</font></u><font size=2>.  The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Warrant.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 7 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>18.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Stockholder Rights</font></u><font size=2>. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote such Warrant Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.  </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>[</font><i><font size=2>Balance left blank intentionally</font></i><font size=2>]</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 8 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>IN WITNESS HEREOF, Pluristem Life Systems, Inc. has caused this Warrant to be executed by its officers thereunto duly authorized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated:  March 3, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.87in; text-indent:0.49in;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="294" style=' margin-left:170.25pt;border-collapse:collapse'>
    <tr>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="227" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>__________________________</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top >
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:.0001pt'><font size=2>Name:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="54" valign=top >
            <p style='margin:0in;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:.0001pt'><font size=2>Title:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="54" ></td>

        <td width="8" ></td>

        <td width="5" ></td>

        <td width="227" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>AGREED AND ACCEPTED BY:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font SIZE=2>WITNESSED BY:</font><br> <br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <font size=2>Name</font><br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <font size=2>Address</font><br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <br> <u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><br> <font size=2>Occupation</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font></p> </td>
        <td width="307" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.05in;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><br> <br> <br> <br> <br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <b><font SIZE=2>ORI ACKERMAN</font></b><b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 9 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>NOTICE OF EXERCISE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>To: Pluristem Life Systems, Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>NOTICE OF EXERCISE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The undersigned hereby elects to purchase __________ shares of the Common Stock of Pluristem Life Systems, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>(Name)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Address)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for the account of the undersigned and not as an agent or nominee for any other party, and for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Securities Act of 1933, as amended, any state securities laws or any applicable securities laws of foreign jurisdictions or any rules or regulations promulgated thereunder.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:left;'><font size=2>(Signature)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:left;'><font size=2>(Date)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><u><b><font SIZE=2>SCHEDULE A</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><u><font SIZE=2>U.S. SECURITIES LAW QUESTIONNAIRE</font></u></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><i><font SIZE=2>ONLY U.S. SUBSCRIBERS NEED TO SIGN THIS</font></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>All capitalized terms herein, unless otherwise defined, have the meanings ascribed thereto in the Subscription Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Subscriber covenants, represents and warrants to the Company that:</font></p> </td>
        <td  width="132">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber is a U.S. Person;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the transactions detailed in the Subscription Agreement and it is able to bear the economic risk of loss arising from such transactions;</font></p> </td> </tr>
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        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber is acquiring the Securities for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Securities in the United States or to U.S. Persons; provided, however, that the Subscriber may sell or otherwise dispose of any of the Securities pursuant to registration thereof pursuant to the </font><i><font size=2>Securities Act of 1933</font></i><font size=2> (the &#147;1933 Act&#148;) and any applicable State securities laws unless an exemption from such registration requirements is available or registration is not required pursuant to Regulation&nbsp;S under the 1933 Act or registration is otherwise not required under this 1933 Act;</font></p> </td> </tr>
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        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber satisfies one or more of the categories indicated below (please check the appropriate box):</font></p> </td> </tr>
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        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of US&nbsp;$5,000,000;</font></p> </td> </tr>
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        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A natural person whose individual net worth, or joint net worth with that person&#146;s spouse, on the date of purchase exceeds US&nbsp;$1,000,000;</font></p> </td> </tr>
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        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A natural person who had an individual income in excess of US&nbsp;$200,000 in each of the two most recent years or joint income with that person&#146;s spouse in excess of US&nbsp;$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A &#147;bank&#148; as defined under Section&nbsp;(3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section&nbsp;3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to </font></p> </td> </tr>
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        <td width="48" ></td>

        <td width="48" ></td>

        <td width="144" ></td>

        <td width="62" ></td>

        <td width="190" ></td>

        <td width="132" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 2 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>Section&nbsp;15 of the </font><i><font size=2>Securities Exchange Act of 1934</font></i><font size=2> (United States); an insurance company as defined in Section&nbsp;2(13) of the 1933 Act; an investment company registered under the </font><i><font size=2>Investment Company Act of 1940</font></i><font size=2> (United States) or a business development company as defined in Section&nbsp;2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section&nbsp;301(c) or (d) of the </font><i><font size=2>Small Business Investment Act of 1958</font></i><font size=2> (United States); a plan with total assets in excess of $5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan
within the meaning of the </font><i><font size=2>Employee Retirement Income Security Act of 1974</font></i><font size=2> (United States) whose investment decisions are made by a plan fiduciary, as defined in Section&nbsp;3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A private business development company as defined in Section&nbsp;202(a)(22) of the </font><i><font size=2>Investment Advisers Act of 1940</font></i><font size=2> (United States);</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 6</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A director or executive officer of the Company;</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person as described in Rule&nbsp;506(b)(2)(ii) under the 1933 Act; or</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories; and</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber is not acquiring the Securities as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Subscriber acknowledges and agrees that:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>if the Subscriber decides to offer, sell or otherwise transfer any of the Securities, it will not offer, sell or otherwise transfer any of such securities directly or indirectly, unless:</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is to the Company;</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is made outside the United States in a transaction meeting the requirements of Rule&nbsp;904 of Regulation&nbsp;S under the 1933 Act and in compliance with applicable local laws and regulations;</font></p> </td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="48" ></td>

        <td width="48" ></td>

        <td width="96" ></td>

        <td width="83" ></td>

        <td width="17" ></td>

        <td width="200" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 3 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(iii)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is made pursuant to the exemption from the registration requirements under the 1933 Act provided by Rule&nbsp;144 thereunder if available and in accordance with any applicable state securities or &#147;Blue Sky&#148; laws; or</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(iv)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Securities are sold in a transaction that does not require registration under the 1933 Act or any applicable U.S. state laws and regulations governing the offer and sale of securities, and it has prior to such sale furnished to the Company an opinion of counsel reasonably satisfactory to the Company;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>any of the Warrants may not be exercised in the United States or by or on behalf of a U.S. Person unless registered under the 1933 Act and any applicable state securities laws unless an exemption from such registration requirements is available;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber has not acquired the Securities as a result of, and will not itself engage in, any &#147;directed selling efforts&#148; (as defined in Regulation&nbsp;S under the 1933 Act) in the United States in respect of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities; provided, however, that the Subscriber may sell or otherwise dispose of any of the Securities pursuant to registration of any of the Securities pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements and as otherwise provided herein; &#145;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. State laws and regulations, the certificates representing any of the Securities will bear a legend in substantially the following form:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&#147;THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE &#147;SECURITIES ACT&#148;), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.&#148;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.5in;border-collapse: collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Company may make a notation on its records or instruct the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described herein; and</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 4 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(f)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber, if an individual, is a resident of the state or other jurisdiction in its address on the Subscriber&#146;s execution page of the Subscription Agreement, or if the Subscriber is not an individual, the office of the Subscriber at which the Subscriber received and accepted the offer to acquire the Securities is the address listed on the Subscriber&#146;s execution page of the Subscription Agreement.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font SIZE=2>IN WITNESS WHEREOF</font></b><font size=2>, the undersigned has executed this Questionnaire as of the _____ day of March, 2005.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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        <td width="307" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom: 0in'><font size=2>SIGNED, SEALED and DELIVERED by ORI ACKERMAN in the presence of:</font><br> <br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <font size=2>Signature</font><br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <font size=2>Print Name</font><br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <font size=2>Address</font><br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <br> <u><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></u><br> <font size=2>Occupation</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:0in;margin-bottom:0in'><font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font><br> <font size=2>)</font></p> </td>
        <td width="307" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:.05in;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><br> <br> <br> <br> <br> <font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><br> <b><font SIZE=2>ORI ACKERMAN</font></b><b></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/687938.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>14
<FILENAME>ex10-14fsb2.htm
<DESCRIPTION>EXHIBIT 10.14
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<p STYLE=' MARGIN-BOTTOM:6PT; MARGIN-TOP:0PT;TEXT-ALIGN:RIGHT;'><FONT SIZE=2>EXHIBIT 10.14</FONT></P>

<p STYLE=' MARGIN-BOTTOM:6PT; MARGIN-TOP:0PT;TEXT-ALIGN:CENTER;'><U><B><FONT SIZE=3>AGREEMENT</FONT></B></U></P>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>This agreement is entered into this 12th day of January, 2005, by and Pluristem Life Systems, Inc. (PLRS), a Nevada Corporation (the "Company"), with a business address at Matam Centre, Building20, Haifa, 31905. Israel and Carlthon Corp ("Finder"), with an address at 9411 Shore Road, Apt. 6A, Brooklyn, NY 11209.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:0.54in;text-align:left;'><b><font SIZE=2>WHEREAS</font></b><font size=2>, Finder wishes to make to the Company, and the Company wishes to receive from Finder, introductions for the purpose of identifying potential investors in the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:0.54in;text-align:left;'><b><font SIZE=2>NOW, THEREFORE</font></b><font size=2>, in consideration of the mutual promises set forth hereinafter, the parties agree as follow:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>1.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Finder's Fee</font></b><font size=2>.  As result of Finder introducing Brody, Corso, De Franceso, Grecos', Inserras', Klier, Johnson, Monteforte, Perez, Short and Walter in the amount of $1,2000,000.  As payment for first introducing the Company to the investors, the Company shall pay to Finder, for services rendered, a finder's fee payable by issuance of 10% in the share amount of the deal (the "Shares") of the Company's common stock, par value $0.00001 (the "Common Stock") to Finder, within three (3) business days of the date hereof.  For an example, $1,200,000 invested equals 1,200,000 shares of the Company's common stock.  To the Finder as a fee.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>2.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Restricted Shares.</font></b><font size=2>  The Finder understands that the Shares are restricted securities, the sale or transfer of which is governed by Rule 144 (the "Rule") promulgated under the Securities Act, which requires, among other conditions, a one-year holding period prior to the resale (in limited amounts) of securities acquired to a non-public offering without having to satisfy the registration requirements under the Securities Act.  The Finder agrees that he will not sell or otherwise transfer the Share, unless the Shares are registered under the Securities Act or unless an exemption from such registration is available.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:0.54in;text-align:left;'><font size=2>The Finder consents to the placement of the following legend on a certificate or other document evidencing the Shares:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font SIZE=2>THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR TRANSFERRED IUNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES OR THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICHMAY BE COUNSEL FOR THE COMPANY) STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.</font></b></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3.</font></b></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Registration Rights</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/LKY/708218.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(a)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company has agreed to register the Shares on a Registration Statement under the Securities Act of 1933, as amended, covering the resale of the Shares for an offering to be made on a continuous basis pursuant to Rule 415 or the Company will make reasonable efforts to have the registration statement become effective by August 30, 2005.  The Registration Statement required hereunder shall be on Form SB-2.  Subject to the terms of this Agreement, the Company shall its commercial reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event not later than 270 days after the date hereof(the "Effective Date"), and shall use its commercially reasonable efforts to keep the
Registration Statement continuously effective under the Securities Act until the date when all the securities covered by the Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule 144(k) or pursuant to Rule 144 without any limitation on the volume of securities sold as determined by the counsel to the company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer agent and the affected Holders (the "Effectiveness Period").</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Finder acknowledges and agrees that the Company will also include on the Registration Statement (i) 12,000,000 shares, subscribed for by Brody, Corso, De Franceso, Grecos', Inserras', Klier, Johnson, Monteforte, Perez, Short. And Walter, pursuant to that certain subscription Agreement, dated as of even date herewith.  The Company may include other securities in this Private Placement as parts of the Registration.  The Company also has acknowledged another Finders' Fee in this Registration.  The Finder Fee shall have the same conditions as the Private Placement investors.  The registration statement will register not only Finder's fee shares and the 12,000,000 shares private placement, it will register several other private placements as well and other finder's fees, and any other
securities Pluristem decides to register in its sole discretion.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(c)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Registration Expenses</font></b><font size=2>.  With respect to the of the Shares, all fees, costs and expenses of and incidental to such registration, inclusion and public offering in connection therewith shall be borne by the Company.  These include all registration, filing, and NASD fees, printing expenses, fees and disbursements of counsel and accountants for the Company, and all legal fees and disbursements and other expenses of complying with state securities or blue sky laws of any jurisdictions in which the securities to be offered are to be registered and qualified.  The Finder shall bear all broker commissions and transfer taxes and the cost of fees and disbursements of the Finder's counsel and accountants as well as any other expenses incurred by the Finder not
expressly included above.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.</font></b></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Indemnity.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(a)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company will indemnify and hold harmless the Finder of the Shares which are included in the Registration Statement pursuant to the provisions of Section2 hereof, and any underwriter (as defined in the Securities Act) for the Finder, if any, and each person, if any, who controls such underwriter within the meaning of Securities Act, from and against, and will reimburse the Finder and each underwriter and controlling person with respect to, any and all loss, damage, liability, cost and expense to which the Finder </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/LKY/708218.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>or any such underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material fact contained in such registration statement, any prospectus contained therein or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to stat therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances will not be liable in any such case to the extent that any such loss, damage, liability, cost or expenses arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by or behalf of the Finder, such underwriter or such controlling
person in writing specifically for use in the preparation thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Finder will indemnify and hold the Company, its directors and officers, any controlling person and any underwriter from and against, and will reimburse the Company, its directors and officers, any controlling person and underwriter with respect to, any and all loss, damage, liability, cost or expense to which the Company or any controlling person and/or any underwriter may become subject under the Securities Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material fact contained in such registration statement, any prospectus contained therein or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance upon and in strict conformity with written information furnished by or on behalf of the Finder specifically for use in the preparation thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>(c)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Promptly after receipt by an indemnified party pursuant to the provisions of paragraph (i) or (ii) of the Section 3 of notice of the commencement of any action involving the subject matter of the foregoing indemnity provisions such indemnifying party will, if a claim thereof is to be made against the indemnifying party pursuant to the provisions of the said paragraph (i) or (ii), promptly notify the indemnifying party of the commencement thereof: but the omission to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise under this Section except to the extent the defense of the claim is prejudiced.  In case such action is brought against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to participate in, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, provided, however, if counsel for the indemnifying party concludes that a single counsel cannot under applicable legal and ethical considerations, represent both the indemnifying party and the indemnified party, the indemnified party or parties have the right to select separate counsel to participate in the defense of such action on behalf of such indemnified party or parties; provided that there shall be no more than one such separate counsel.  After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/LKY/708218.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>liable to such indemnified party pursuant to the provisions of said paragraph (a) or (b) for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, unless (i) the indemnified party shall have employed counsel in accordance with the provisions of the preceding sentence, (ii) the indemnifying party shall have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after the notice of the commencement of the action or (iii) the indemnifying party has, in its sole discretion, authorized the employment of counsel for the indemnified party at the expense of the indemnifying party.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>5.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Entire Agreement.</font></b><font size=2>  This agreement sets forth the entire understanding between the parties, and cannot be changed, modified or canceled except by an instrument signed by the party sought to be bound.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>6.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Notices.</font></b><font size=2>  Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, or by personal delivery and addressed to the parties as indicated in the beginning of the Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>7.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Governing Law.</font></b><font size=2>  Any controversy arising under this agreement shall be subject to the exclusive jurisdiction of the federal and state courts located within the County of New York in the State of New York, and the parties hereby consent to the jurisdiction of such courts.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=2>8.</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Severability.  </font></b><font size=2>If any term or provision of this Agreement shall be found to be illegal or unenforceable by a court of competent jurisdiction, the remaining provisions will nevertheless continue in full force and effect without being impaired or invalidated in any way.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font SIZE=2>IN WITNESS WHEREOF, </font></b><font size=2>the parties have hereunto signed as of the date first above written.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>PLURISTEM LIFE SYSTEM, INC.</font></b><b></b></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>FINDER</font></b></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>BY.  /s/ signed</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ signed</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>CFO</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>CARLTHON CORP.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/LKY/708218.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><b><font size=3>Consulting Fee to Carlthon Corp</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=3>1,200,000 shares will be issued to Carlthon Corp as a Finder Fee</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:left;'><font size=3>Carlthon Corp</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=3>9411 Shore Road Apt. 6A</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=3>Brooklyn, NY 11209</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font SIZE=3>ID#  01-0585862</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/LKY/708218.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<DESCRIPTION>EXHIBIT 10.15
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.15</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font SIZE=2>NONE OF THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE "AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><b><font SIZE=2>PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(U.S. Accredited Investors)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Dated for reference January 31, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><u><font size=2>Personal &amp; Confidential</font></u></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>TO:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>PLURISTEM LIFE SYSTEMS, INC. (the "Company")</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>Matam Centre, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>Building 20, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in;text-align:left;'><font size=2>Haifa, 31905 Israel</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in; text-indent:-1in;text-align:left;'><u><font size=2>Purchase of Shares and Warrants</font></u></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Subscription</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the basis of the representations and warranties and subject to the terms and conditions set forth herein, the undersigned (the "Investor") hereby irrevocably subscribes for and agrees to purchase __________________ units (each a &#147;Unit&#148; and collectively the &#147;Units&#148;), each Unit consisting of one common share (each a &#147;Share&#148; and collectively the &#147;Shares&#148;) and one common share purchase warrant (each a &#147;Warrant&#148; and collectively the &#147;Warrants&#148;) in the capital of the Company at a price per Unit of US$0.10 (such subscription and agreement to purchase being the "Subscription"), for an aggregate purchase price of US$____________ (the "Subscription Price").</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Each Warrant will entitle the holder to purchase one (1) common share in the capital of the Company at an exercise price of $0.30 on or before November 30, 2006</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company hereby irrevocably agrees to sell, on the basis of the representations and warranties and subject to the terms and conditions set forth herein, the Units to the Investor at the Subscription Price.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms hereof, the Subscription will be effective upon its acceptance by the Company.  The Investor acknowledges that the offering of Units contemplated hereby is part of a private placement of Shares having an aggregate subscription level of up to US$3,000,000 (the "Offering"). The Offering is not subject to any minimum aggregate subscription level.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Payment</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Subscription Price must accompany this Subscription and shall be paid by cashier&#146;s check or bank draft drawn on a bank in the United States reasonably acceptable to the Company, and made payable and delivered to the Company.  Alternatively, the Subscription Price may be wired to the Company or its attorneys pursuant to wiring instructions that will be provided to the Investor upon </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- </font><font size=2>2 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>request.  If the funds are wired to the Company's attorneys, those attorneys are authorized to immediately deliver the funds to the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor acknowledges and agrees that this Subscription Agreement, the Subscription Price and any other documents delivered in connection herewith will be held on behalf of the Company.  In the event that this Subscription Agreement is not accepted by the Company for whatever reason, which the Company expressly reserves the right to do, within 30 days of the delivery of an executed Subscription Agreement by the Investor, this Subscription Agreement, the Subscription Price (without interest thereon) and any other documents delivered in connection herewith will be returned to the Investor at the address of the Investor as set forth in this Subscription Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Documents Required from Investor</font></u></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Investor must complete, sign and return to the Company:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an executed copy of this Subscription Agreement;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>if a U.S. Person, a Prospective Investor Suitability Questionnaire in the form attached as Exhibit A (the "US Questionnaire"); </font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A Registration Rights Agreement in the form attached as Exhibit B (the &#147;Registration Rights Agreement&#148;); and</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>an Escrow Agreement in the form attached as Exhibit C (the &#147;Escrow Agreement&#148;).</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor shall complete, sign and return to the Company as soon as possible, on request by the Company, any documents, questionnaires, notices and undertakings as may be required by regulatory authorities and applicable law.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Closing</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Closing of the offering (the "Closing") shall occur no later than February 15, 2005 or on such later date as may be mutually agreed to by the Investor and the Company (the "Closing Date"). The Investor hereby appoints Aaron Bookstein as Investor&#146;s agent to grant extensions and/or negotiate any issues that arise in regards to the Closing or Closing documents. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company may, at its discretion, elect to close the Offering in one or more closings, in which event the Company may agree with one or more Investors (including the Investor hereunder) to complete delivery of the Units to such Investor(s) against payment therefor at any time on or prior to the Closing Date.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Acknowledgements of Investor</font></u></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.1</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Investor acknowledges and agrees that:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>none of the Shares have been registered under the 1933 Act, under any state securities or "blue sky" laws of any state of the United States, or under any provincial securities laws, and, unless so registered, may not be offered or sold in the United States or to U.S. Persons, as that term is defined in Regulation S promulgated under the 1933 Act ("Regulation S"), except pursuant to an exemption from, or in a transaction not subject to, </font></p> </td> </tr>
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<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- </font><font size=2>3 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>the registration requirements of the 1933 Act and in each case only in accordance with any applicable securities laws;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor acknowledges that the Company has not undertaken the registration of, and will have no obligation to register any of, the Shares under the 1933 Act, except as required under the Registration Rights Agreement;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>by completing the US Questionnaire, the Investor is representing and warranting that the Investor is an "Accredited Investor", as the term is defined in Regulation D under the 1933 Act;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the decision to execute this Agreement and purchase the Units agreed to be purchased hereunder has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company, and such decision is based entirely upon a review of information (the receipt of which is hereby acknowledged) which has been filed by the Company with the United States Securities and Exchange Commission and in compliance, or intended compliance, with applicable securities legislation (collectively, the "Public Record");</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>e)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>by execution hereof the Investor has waived the need for the Company to communicate the Company's acceptance of the purchase of the Shares pursuant to this Agreement;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(f)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>it will indemnify and hold harmless the Company and, where applicable, its directors, officers, employees, agents, advisors and shareholders from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Investor contained herein or in any document furnished by the Investor to the Company in connection herewith being untrue in any material respect or any breach or failure by the Investor to comply with any covenant or agreement made by the Investor to the Company in connection therewith;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(g)</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>it has been advised to consult its own legal, tax and other advisors with respect to the merits and risks of an investment in the Shares and with respect to applicable resale restrictions and it is solely responsible for compliance with applicable resale restrictions;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(h)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Shares are not listed on any stock exchange or subject to quotation except that the Shares currently are eligible for quotation on the National Association of Securities Dealers, Inc. Over The Counter Bulletin Board, and no representation has been made to the Investor that the Shares will become listed on any other stock exchange or subject to quotation on any other quotation system;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>there are risks associated with an investment in the Units, as more fully described in certain information forming part of the Public Record;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(j)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>this Agreement is not enforceable by the Investor unless it has been accepted by the Company.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- </font><font size=2>4 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td width="365" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Representations, Warranties and Covenants of the Investor</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor hereby represents and warrants to and covenants with the Company (which representations, warranties and covenants shall survive the Closing) that:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor has duly executed and delivered this Subscription Agreement and it constitutes a valid and binding agreement of the Investor enforceable against the Investor;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor has the requisite knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in the Shares and the Company, and the Investor is providing evidence of such knowledge and experience in these matters through the information requested in the Questionnaire;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor is resident in the jurisdiction set out under the heading "Name and Address of Investor" on the signature page of this Subscription Agreement;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor is acquiring the Shares for investment purposes only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Shares in the United States or to U.S. Persons; </font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor is not an underwriter of, or dealer in, the common shares of the Company, nor is the Investor participating, pursuant to a contractual agreement or otherwise, in the distribution of the Shares;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In this Subscription, the term "U.S. Person" shall have the meaning ascribed thereto in Regulation S and for the purpose of the Subscription includes any person in the United States.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>
        <td width="190" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Legending of Subject Shares</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor hereby acknowledges that that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing any of the Shares will bear a legend in substantially the following form:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font SIZE=2>THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Subscription Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- </font><font size=2>5 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>
        <td width="306" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Representations and Warranties of the Company</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company acknowledges and agrees that the Investor is entitled to rely upon the representations and warranties of the Company contained in this Agreement and further acknowledges that the Investor will be relying upon such representations and warranties in purchasing the Shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company warrants that the Public Record fairly represents the status of the Company as at the dates indicated in the Public Record.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company agrees to register the Units pursuant to the terms contained in the Registration Rights Agreement.</font></p>


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        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>
        <td width="293" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Escrow; No Issuance of Stock at Lower Prices</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor will escrow the Shares and Warrants pursuant to the terms of the Escrow Agreement and one quarter of the Investor&#146;s Shares and one quarter of the Investor&#146;s Warrants will be released from escrow every 3 months, with the first release on August 30, 2005. The Investor agrees not to short sell the securities of the Company prior to or during the period of the Escrow. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the period that any Shares are required to be held in escrow pursuant to the Escrow Agreement, the Company will not sell or transfer Shares or securities exercisable or convertible into Shares to any person at a purchase price (the &#147;Lower Price&#148;) less than $0.10 per Share without the written consent of the Investor. In the event that the Company breaches this provision, the Investor will be entitled to a additional number of Units equal to the number of Units originally issued to the Investor in this offering (the &#147;Original Units&#148;) divided by the Lower Price minus the Original Units divided by $0.10. For clarity, if there were 50,000 Original Units and the Company issued common shares at $0.07, the Investor would be entitled to (50,000 divided by 0.07 equals
714,286, less 50,000 divided by 0.10 equals 500,000 totals 214,286) 214,286 additional Units. The Company will issue said additional Units within 3 business days of issuing securities at the Lower Price. This provision will repeat so long as any Units remain in escrow. </font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>
        <td width="55" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Costs</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Investor acknowledges and agrees that all costs and expenses incurred by the Investor (including any fees and disbursements of any special counsel or Escrow Agent retained by the Investor) relating to the purchase of the Units shall be borne by the Investor, except that the Company will pay a finder&#146;s fee respecting this subscription and will pay costs of registration of the Units.</font></p>


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        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td width="112" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Governing Law</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>11.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Subscription Agreement is governed by the laws of the State of New York.  The Investor, in its personal or corporate capacity and, if applicable, on behalf of each beneficial purchaser for whom it is acting, irrevocably attorns to the jurisdiction of the courts of the State of New York.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>
        <td width="70" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Survival</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>12.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Subscription, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the purchase of the Units by the Investor pursuant hereto, the completion of the issue of Units of the Company and any subsequent disposition by the Investor of the Shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- </font><font size=2>6 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Assignment</font></u></p> </td>
        <td  width="226">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.1</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>This Subscription is not transferable or assignable.</font></p> </td> </tr>
    <tr >
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.</font></p> </td>
        <td width="80" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Execution</font></u></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="104" ></td>

        <td width="87" ></td>

        <td width="11" ></td>

        <td width="245" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall be entitled to rely on delivery by facsimile machine of an executed copy of this Subscription and acceptance by the Company of such facsimile copy shall be equally effective to create a valid and binding agreement between the Investor and the Company in accordance with the terms hereof. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.</font></p> </td>
        <td width="126" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Entire Agreement</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>15.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Agreement contains the entire agreement between the parties with respect to the sale of the Shares and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by the Company, the Investor or by anyone else.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.</font></p> </td>
        <td width="65" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Notices &nbsp;</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>16.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication.  Notices to the Investor shall be directed to the address on page 11; notices to the Company shall be directed to it at the address on page 1, with a copy to Bernard Pinsky, 800 &#150; 885 West Georgia Street, Vancouver, British Columbia, Canada fax 604-687-6314.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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    <tr>
        <td width="43" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- </font><font size=2>7 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:0.04in;text-align:justify;'><font size=2>IN WITNESS WHEREOF the Investor has duly executed this Subscription as of the date first above mentioned.</font></p>


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    <tr >
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Number of Units to be purchased at $0.10 U.S. each:&nbsp;&nbsp;</font></p> </td>
        <td width="204" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>_________________________</font></u></p> </td>
        <td  width="84">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>Total purchase price:&nbsp;&nbsp;</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Registration of the Share and Warrant certificates which are to be delivered at Closing should be made as follows:</font></p> </td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="103" ></td>

        <td width="209" ></td>

        <td width="221" ></td>

        <td width="91" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>________________________________________________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>(name)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>________________________________________________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>(address)</font></p>


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    <tr>
        <td width="79" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td width="565" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The undersigned hereby acknowledges that it will deliver to the Company all such additional</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>completed forms in respect of the Investor's purchase of Shares as may be required for filing with the appropriate securities commissions and regulatory authorities and stock exchanges.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="259" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>(Name of Investor - Please type or print)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="235" style=' margin-left:3.0in;border-collapse:collapse'>
    <tr>
        <td width="235" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>(Signature and, if applicable, Office)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="146" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>(Address of Investor)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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        <td width="222" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>(City, State, Zip Code of Investor)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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        <td width="146" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><font size=2>(Country of Investor)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="43" style=' margin-left:225.45pt;border-collapse:collapse'>
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        <td width="43" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- </font><font size=2>8 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:6pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>A C C E P T A N C E</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The above-mentioned Subscription in respect of the Shares is hereby accepted by PLURISTEM LIFE SYSTEMS, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>DATED at </font><u><font size=2>_______________________________________</font></u><font size=2>, the 31st day of January, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr >
        <td width="44" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Per:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="148" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Authorized Signatory</font></p> </td> </tr>
    <tr>
        <td width="48" ></td>

        <td width="4" ></td>

        <td width="160" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><i><b><font SIZE=2>EXHIBIT A</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><u><font SIZE=2>U.S. SECURITIES LAW QUESTIONNAIRE</font></u></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>All capitalized terms herein, unless otherwise defined, have the meanings ascribed thereto in the Subscription Agreement.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style=' border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Investor covenants, represents and warrants to the Company that:</font></p> </td>
        <td  width="183">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor is a U.S. Person;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the transactions detailed in the Subscription Agreement and it is able to bear the economic risk of loss arising from such transactions;</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor is acquiring the Shares for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Shares in the United States or to U.S. Persons; provided, however, that the Investor may sell or otherwise dispose of any of the Shares pursuant to registration thereof pursuant to the Securities Act of 1933 (the "1933 Act") and any applicable State securities laws unless an exemption from such registration requirements is available or registration is not required pursuant to Regulation&nbsp;S under the 1933 Act or registration is otherwise not required under this 1933 Act;</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor satisfies one or more of the categories indicated below (please check the appropriate box):</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of US&nbsp;$5,000,000;</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A natural person whose individual net worth, or joint net worth with that person's spouse, on the date of purchase exceeds US&nbsp;$1,000,000;</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A natural person who had an individual income in excess of US&nbsp;$200,000 in each of the two most recent years or joint income with that person's spouse in excess of US&nbsp;$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A "bank" as defined under Section&nbsp;(3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section&nbsp;3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to Section&nbsp;15 of the Securities Exchange Act of 1934 (United States); an insurance company as defined in Section&nbsp;2(13) of the 1933 Act; an investment company registered under the Investment Company Act of 1940 (United States) or a business development company as defined in Section&nbsp;2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section&nbsp;301(c) or (d) of the Small Business Investment Act of 1958
(United States); a plan with total assets in excess of $5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan within the </font></p> </td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="156" ></td>

        <td width="34" ></td>

        <td width="183" ></td>

        <td width="199" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="28" style=' margin-left:231.45pt;border-collapse:collapse'>
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        <td width="28" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>meaning of the Employee Retirement Income Security Act of 1974 (United States) whose investment decisions are made by a plan fiduciary, as defined in Section&nbsp;3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A private business development company as defined in Section&nbsp;202(a)(22) of the Investment Advisers Act of 1940 (United States);</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 6</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A director or executive officer of the Company;</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule&nbsp;506(b)(2)(ii) under the 1933 Act; or</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories; and</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor is not acquiring the Shares as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Investor acknowledges and agrees that:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>if the Investor decides to offer, sell or otherwise transfer any of the Shares, it will not offer, sell or otherwise transfer any of such securities directly or indirectly, unless:</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is to the Company;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is made outside the United States in a transaction meeting the requirements of Rule&nbsp;904 of Regulation&nbsp;S under the 1933 Act and in compliance with applicable local laws and regulations;</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(iii)</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is made pursuant to the exemption from the registration requirements under the 1933 Act provided by Rule&nbsp;144 thereunder if available and in accordance with any applicable state securities or "Blue Sky" laws; or</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(iv)</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Shares are sold in a transaction that does not require registration under the 1933 Act or any applicable U.S. state laws and regulations governing the offer and sale of securities, and it has prior to such sale furnished to the Company an opinion of counsel reasonably satisfactory to the Company;</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor has not acquired the Shares as a result of, and will not itself engage in, any "directed selling efforts" (as defined in Regulation&nbsp;S under the 1933 Act) in the United States in respect of the Shares which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Shares; provided, however, that the Investor may sell or otherwise dispose of any of the Shares pursuant to registration of any of the Shares pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements and as otherwise provided herein; '</font></p> </td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="52" ></td>

        <td width="104" ></td>

        <td width="68" ></td>

        <td width="9" ></td>

        <td width="223" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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    <tr>
        <td width="28" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.5in;border-collapse: collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. State laws and regulations, the certificates representing any of the Shares will bear a legend in substantially the following form:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>"THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS."</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:.5in;border-collapse: collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Company may make a notation on its records or instruct the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described herein; and</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(f)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Investor, if an individual, is a resident of the state or other jurisdiction in its address on the Investor's execution page of the Subscription Agreement, or if the Investor is not an individual, the office of the Investor at which the Investor received and accepted the offer to acquire the Shares is the address listed on the Investor's execution page of the Subscription Agreement.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the ________ day of __________________, 2005.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="443" style=' border-collapse:collapse'>
    <tr>
        <td width="336" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>If a Corporation, Partnership or Other Entity:</font></p> </td>
        <td width="107" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>If an Individual:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="336" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Print or Type Name of Entity</font></p> </td>
        <td width="72" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Signature</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Signature of Authorized Signatory</font></p> </td>
        <td width="128" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Print or Type Name</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Type of Entity</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>Social Security/Tax I.D. No.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676176.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<SEQUENCE>16
<FILENAME>ex10-68fsb2.htm
<DESCRIPTION>EXHIBIT 10.16
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.16</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>INVESTORS RIGHTS AGREEMENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font SIZE=2>THIS INVESTORS RIGHTS AGREEMENT,</font></b><font size=2> dated as of January 31, 2005 (this "Agreement"), is made by and between </font><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b><font size=2>, a Nevada corporation with headquarters located at MATAM Advanced Technology Park, Building No. 20, Haifa, Israel (the &#147;Company&#148;), and each entity named on a signature page hereto (each, an &#147;Investor&#148;).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>W I T N E S S E T H:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font SIZE=2>WHEREAS</font></b><font size=2>, upon the terms and subject to the conditions of the Private Placement Subscription Agreement, dated as of January 31, 2005, between the Investor and the Company (the &#147;Securities Purchase Agreement&#148;) (capitalized terms not defined in this Agreement have the meaning set out in the Securities Purchase Agreement), the Company has agreed to issue and sell to the Investors the Shares and the Warrants; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font SIZE=2>WHEREAS</font></b><font size=2>, the Warrant Shares may be issued upon the exercise of the Warrants; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font SIZE=2>WHEREAS,</font></b><font size=2> the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the &#147;Securities Act&#148;), with respect to the Registrable Securities (as defined below); </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font SIZE=2>NOW, THEREFORE,</font></b><font size=2> in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font size=2>1.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Definitions.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;As used in this Agreement, the following terms shall have the following meanings:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Effective Date&#148; means the date the SEC declares a Registration Statement covering Registrable Securities and otherwise meeting the conditions contemplated hereby to be effective.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Investor&#148; means the Investor and any permitted transferee or assignee who agrees to become bound by the provisions of this Agreement and who holds Shares, Warrants or Warrant Shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Permitted Suspension Period&#148; means up to two periods during any consecutive 12-month period during which the holder&#146;s right to sell Registrable Securities under the Registration Statement is suspended, each of which suspension period shall neither (i) be for more than fifteen (15) days nor (ii) begin less than ten (10) business days after the last day of the </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>preceding suspension (whether or not such last day was during or after a Permitted Suspension Period).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Register,&#148; &#147;Registered,&#148; and &#147;Registration&#148; refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis (&#147;Rule 415"), and the declaration or ordering of effectiveness of such Registration Statement by the SEC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>"Registrable Securities" means, collectively, the Shares and the Warrant Shares.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Registration Statement&#148; means a registration statement of the Company under the Securities Act covering Registrable Securities on Form SB-2, if the Company is then eligible to file using such form, and if not eligible, on Form S-1 or other appropriate form.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Required Effective Date&#148; means, initially, the Initial Required Effective Date or the Increased Required Effective Date (as those terms are defined below), as the case may be.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Restricted Sale Date&#148; means the first date, other than a date during a Permitted Suspension Period (as defined below), on which the Investor is restricted from making sales of Registrable Securities covered by any previously effective Registration Statement. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Shares&#148; means the Shares acquired by the Investor under the Securities Purchase Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Warrants&#148; means the Warrants acquired by the Investor under the Securities Purchase Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> &#147;Warrant Shares&#148; means the common shares of the Company acquired by the Investor upon exercise of the Warrants. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2.</font></b></p> </td>
        <td width="107" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Registration.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(a)</font></b></p> </td>
        <td width="189" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Mandatory Registration.  </font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall prepare and file with the SEC, as soon as practicable after the Closing Date but no later than 70 days after the Closing Date (the &#147;Required Filing Date&#148;), a Registration Statement registering for resale by the Investor a sufficient number of shares of Common Stock for the Investors to sell the Registrable Securities. The parties acknowledge that other securities issued by the Company will be registered on the same Registration Statement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will use its reasonable best efforts to cause such Registration Statement to be declared effective on or before August 30, 2005 (the &#147;Required Effective Date&#148;).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>(b)</font></b></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Payments by the Company.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Registration Statement covering the Registrable Securities is not filed as contemplated by this Agreement with the SEC by the Required Filing Date, the Company will make payment to the Investor in such amounts and at such times as shall be determined pursuant to this Section 2(b). </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Registration Statement covering the Registrable Securities is not effective by the relevant Required Effective Date, then the Company will make payments to the Investor in such amounts and at such times as shall be determined pursuant to this Section 2(b).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount (the &#147;Periodic Amount&#148;) to be paid by the Company to the Investor for breach of the Required Filing Date or the Required Registration Date shall be two percent (2%) of the Purchase Price for each 30 day period beyond the applicable date until the filing or the registration, as the case may be, is completed. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Periodic Amount, if any, will be payable by the Company, in cash or other immediately available funds to the Investor (1) on the day after the Required Filing Date, the Required Effective Date or a Restricted Sale Date, as the case may be, and (2) on the earlier of (A) each thirtieth day thereafter, (B) the third business day after the date the Registration Statement is filed or is declared effective, or (C) the third business day after the Registration Statement has its restrictions removed after the relevant Effective Date, in each case without requiring demand therefor by the Investor. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, the amounts payable by the Company pursuant to this provision shall not be payable to the extent any delay in the filing or effectiveness of the Registration Statement occurs because of an act of, or a failure to act or to act timely by the Investor or its counsel.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Anything in the preceding provisions of this Section 2(b) to the contrary notwithstanding, if, but only if, the Registration Statement is reviewed by the SEC and declared effective within thirty (30) days following the Required Effective Date or five (5) days after oral or written notice by the SEC that it may be declared effective, whichever is earlier, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>(A) the provisions of Section 2(b)(i) shall not apply; and </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>(B) the provisions of Section 2(b)(ii) shall not apply to the fact that the Registration Statement was initially declared effective after the Required Effective Date; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>and the Company will not have any obligation to pay any Periodic Amount to the Investor with respect thereto.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font size=2>3.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Obligations of the Company.</font></b><font size=2>  In connection with the registration of the Registrable Securities, the Company shall do each of the following:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepare promptly, and file with the SEC by the Required Filing Date a Registration Statement with respect to not less than the number of Registrable Securities provided in Section 2(a) above, and thereafter use its reasonable best efforts to cause such Registration Statement relating to Registrable Securities to become effective by the Required Effective Date and keep the Registration Statement effective at all times other than during Permitted Suspension Periods during the period (the &#147;Registration Period&#148;) continuing until the earlier of (i) the date when the Investors may sell all Registrable Securities under Rule 144 without volume or other restrictions or limits (the &#147;Unrestricted Sale Date&#148;) or (ii) the date the Investors no longer own any of the Registrable Securities, which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and, during the Registration Period, comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in the Registration Statement;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Furnish to each Investor or its agent (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of the Registration Statement, each preliminary prospectus and prospectus, and each amendment or supplement thereto, and (ii) such number of copies of a prospectus, and all amendments and supplements thereto and such other documents, as such Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Investor;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As promptly as practicable after becoming aware thereof, notify each Investor of the happening of any event of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and use its best efforts promptly to prepare a supplement or amendment to the Registration Statement or other appropriate filing with the SEC to correct such untrue statement or omission, and deliver a number of copies of such supplement or amendment to each Investor as such Investor may reasonably request;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As promptly as practicable after becoming aware thereof, notify each Investor who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the SEC of a Notice of Effectiveness or any notice of effectiveness or any stop order or other suspension of the effectiveness of the Registration Statement at the earliest possible time;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comply with Regulation FD or any similar rule or regulation regarding the dissemination of information regarding the Company, and in furtherance of the foregoing, and not in limitation thereof, not disclose to the Investor any non-public material information regarding the Company;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, if at any time or from time to time after the date of effectiveness of the Registration Statement, the Company notifies the Investors in writing that the effectiveness of the Registration Statement is suspended for any reason, whether due to a potential material event or otherwise, the Investors shall not offer or sell any Registrable Securities, or engage in any other transaction involving or relating to the Registrable Securities, from the time of the giving of such notice until such Investor receives written notice from the Company that such the effectiveness of the Registration Statement has been restored, whether because the potential material event has been disclosed to the public or otherwise; </font><u><font size=2>provided,</font></u><font size=2> </font><u><font size=2>however,</font></u><font size=2>
that the Company may not so suspend the right to such holders of Registrable Securities during the periods the Registration Statement is required to be in effect other than during a Permitted Suspension Period;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provide a transfer agent (&#147;Transfer Agent&#148;) and registrar, which may be a single entity, for the Registrable Securities not later than the initial Effective Date; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Take all other reasonable administrative steps and actions (including the participation of Company counsel) necessary to expedite and facilitate disposition by the Investor of the Registrable Securities pursuant to the Registration Statement; provided, however, that the foregoing does not require that the Company take any steps whatsoever regarding the identification or selection of a broker to sell the Registrable Securities, the identification of buyers of the Registrable Securities, or the negotiation of the sale  terms of the Registrable Securities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font size=2>4.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Obligations of the Investors.</font></b><font size=2>  In connection with the registration of the Registrable Securities, the Investors shall have the following obligations:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Investor, by such Investor's acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor's election to exclude all of such Investor's Registrable Securities from the Registration Statement; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3 above, such Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Investor's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3, and, if so directed by the Company, such Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in such Investor's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Investor agrees that the Investor will notify the Company in writing when the Investor no longer is the Holder of any Registrable Securities or Securities exercisable for Registrable Securities. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font size=2>5.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Expenses of Registration</font></b><font size=2>.  All reasonable expenses (other than underwriting discounts and commissions of the Investor) incurred in connection with registrations, filings or qualifications pursuant to Section 3, but including, without limitation, all registration, listing, and qualifications fees, printers and accounting fees, shall be borne by the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font size=2>6.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Indemnification</font></b><font size=2>.  In the event any Registrable Securities are included in a Registration Statement under this Agreement:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by law, the Company will indemnify and hold harmless each Investor who holds such Registrable Securities, the directors, if any, of such Investor, the officers, if any, of such Investor, (each, an &#147;Indemnified Party&#148;), against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, &#147;Claims&#148;) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any of the following statements, omissions or violations in the Registration Statement, or any post-effective amendment thereof, or any prospectus included therein: (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law (the matters in the foregoing clauses (i) through (iii) being, collectively referred to as
&#147;Violations&#148;).  Subject to clause (b) of this Section 6, the Company shall reimburse the Investors, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.  Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a) shall not (I) apply to any Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of such Indemnified Party expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof;  (II) be available to the extent such Claim is based on a failure of the Investor to deliver or cause to be delivered
the prospectus made available by the Company or the amendment or supplement thereto made available by the Company; (III) be available to the extent such Claim is based on the delivery of a prospectus by the Investor after </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>receiving notice from the Company under Section 3 hereof (other than a notice regarding the effectiveness of the Registration Statement or any amendment or supplement thereto), or (IV) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed.  The Investor will indemnify the Company and its officers, directors and agents (each, an &#147;Indemnified Party&#148;) against any claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company, by or on behalf of such Investor, expressly for use in connection with the preparation of the Registration Statement or the amendment or supplement thereto, subject to such limitations and conditions as are applicable to the indemnification provided by the
Company to this Section 6. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promptly after receipt by an Indemnified Party under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Party or the Indemnified Party, as the case may be.  In case any such action is brought against any Indemnified Party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, assume the defense thereof, subject to the provisions herein stated and after notice from the indemnifying party to such Indemnified Party of its election so to assume the defense thereof, the indemnifying party will not be liable to such Indemnified Party under this Section 6 for any legal or other reasonable out-of-pocket expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation, unless the indemnifying party shall not pursue the action to its final conclusion.  The Indemnified Party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and reasonable out-of-pocket expenses of such counsel shall not be at the expense of the indemnifying party if the indemnifying party has assumed
the defense of the action with counsel reasonably satisfactory to the Indemnified Party provided such counsel is of the opinion that all defenses available to the Indemnified Party can be maintained without prejudicing the rights of the indemnifying party. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.  The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font size=2>7.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Contribution</font></b><font size=2>.  To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; </font><u><font size=2>provided</font></u><font size=2>, </font><u><font size=2>however</font></u><font size=2>, that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation; and (c) except where the seller has committed fraud (other than a fraud by reason of the information included or omitted from the Registration Statement as to which the Company has not given notice as contemplated under Section
3 hereof) or intentional misconduct, contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font size=2>8.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Reports under Securities Act and Exchange Act</font></b><font size=2>.  With a view to making available to Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit Investor to sell securities of the Company to the public without Registration (&#147;Rule 144&#148;), the Company agrees to:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;make and keep public information available, as those terms are understood and defined in Rule 144; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font size=2>9.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>Amendment of Registration Rights</font></b><font size=2>.  Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investors who hold a eighty (80%) percent interest of the Registrable Securities (as calculated by the number of Shares then held by the Investors).  Any amendment or waiver effected in accordance with this Section 9 shall be binding upon each Investor and the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="168" style=' margin-left:1.0in;border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10.</font></b></p> </td>
        <td width="120" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Miscellaneous.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notices required or permitted to be given hereunder shall be given in the manner contemplated by the Securities Purchase Agreement, (i) if to the Company or to the Investor, to their respective address contemplated by the Securities Purchase Agreement, or at such other address as each such party furnishes by notice given in accordance with this Section.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Each party attorns to the </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>jurisdiction of the courts of the State of New York with regard to any conflict under this Agreement. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning thereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission or PDF of a copy of this Agreement bearing the signature of the party so delivering this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.08in;text-align:justify;'><font size=2> (l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement, the Escrow Agreement (as defined in the Securities Purchase Agreement) and the Securities Purchase Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1.04in;text-align:justify;'><b><font SIZE=2>IN WITNESS WHEREOF,</font></b><font size=2> the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="310" style=' margin-left:2.5in;border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By: _________________________________</font></p> </td> </tr>
    <tr >
        <td width="306" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Name: ______________________________</font></p> </td>
        <td  width="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="306" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Title: _______________________________</font></p> </td>
        <td  width="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="103" style=' margin-left:2.5in;border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>INVESTOR:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="308" style=' margin-left:2.5in;border-collapse:collapse'>
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        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>____________________________________</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="221" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>[</font><i><font size=2>Print Name of Initial Investor</font></i><font size=2>]</font></p> </td>
        <td  width="39">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="239" ></td>

        <td width="42" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="310" style=' margin-left:2.5in;border-collapse:collapse'>
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        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By: _________________________________</font></p> </td> </tr>
    <tr >
        <td width="306" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Name: ______________________________</font></p> </td>
        <td  width="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Title: _______________________________</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676684.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>1/07/04</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<TYPE>EX-10
<SEQUENCE>17
<FILENAME>ex10-17fsb2.htm
<DESCRIPTION>EXHIBIT 10.17
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<p STYLE=' MARGIN-BOTTOM:6PT; MARGIN-TOP:12PT;TEXT-ALIGN:RIGHT;'><B><FONT SIZE=2>EXHIBIT 10.17</FONT></B></P>

<p STYLE=' MARGIN-BOTTOM:6PT; MARGIN-TOP:12PT;TEXT-ALIGN:CENTER;'><B><FONT SIZE=2>ESCROW AGREEMENT</FONT></B></P>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>THIS AGREEMENT dated for reference the 31st day of January, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:justify;'><font SIZE=2>AMONG:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS</font></b><font size=2>, </font><b><font SIZE=2>INC.</font></b><font size=2>,  a Nevada company, having an office at Matam Center, Building 20, Haifa, 31905, Israel (herein called &#147;Pluristem&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE FIRST PART</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>AND:</font></p> </td>
        <td width="458" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>THOSE INVESTORS</font></b><font size=2> who are listed on the attached Schedule &#147;A&#148;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(herein jointly called the &#147;Investors&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE SECOND PART</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>AND:</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>CLARK, WILSON,</font></b><font size=2> attorneys, of 800 &#150; 885 West Georgia Street, Vancouver, B.C. Canada V6M 3R9</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>herein called the &#147;Escrow Agent&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font SIZE=2>OF THE THIRD PART</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font SIZE=2>WITNESSES THAT WHEREAS:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Pluristem approved of a private placement of Units each Unit consisting of one common share (each a &#147;Share&#148;) and one common share purchase warrant (each a &#147;Warrant&#148;) with Investors listed in Schedule A attached hereto pursuant to Private Placement Subscription Agreements (&#147;SPAs&#148;) and Investors&#146; Rights Agreements (&#147;IRAs&#148;)dated for reference January 31, 2005;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SPAs and IRAs contemplated that the Shares and Warrants would be held in escrow with release over time;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pluristem and the Investors desire to appoint the Escrow Agent, and the Escrow Agent has agreed to act as escrow agent, to hold the Shares and Warrants in accordance with the terms hereof;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676666.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 2 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td width="298" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>DEFINITIONS AND INTERPRETATION</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wherever used in this Agreement, unless the context otherwise requires, the following words and terms will have the meanings shown:</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Agreement&#148; means this escrow agreement;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Company&#148; means Pluristem;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Closing Date&#148; means the day the initial Shares and Warrants were paid for and issued by the Company;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Release Date&#148; means each of the 9, 12, 15 and 18 month anniversaries November 30, 2004;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>&#147;Subsequent Closing Date&#148; means any closing of purchase and sale of Shares and Warrants pursuant to the SPAs not completed on the Closing Date.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.2</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In this Agreement:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the headings have been inserted for convenience of reference only and in no way define, limit, or enlarge the scope or meaning of the provisions of this Agreement;</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>all references to any party, whether a party to this Agreement or not, will be read with such changes in number and gender as the context or reference requires; and</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>when the context hereof makes it possible, the word &#147;person&#148; includes in its meaning any firm and any body corporate or politic.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>DEPOSIT OF SHARES AND WARRANTS</font></u></p> </td>
        <td  width="221">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="4" ></td>

        <td width="146" ></td>

        <td width="77" ></td>

        <td width="103" ></td>

        <td width="2" ></td>

        <td width="239" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will within three (3) days of the Closing Date or any Subsequent Closing Dates, whichever is applicable, deliver the Shares and Warrants to the Escrow Agent for deposit in escrow with the Escrow Agent on the terms of this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td width="185" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>ESCROW PROVISIONS</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company hereby directs the Escrow Agent to retain the Shares and Warrants in safekeeping, and not to do or cause anything to be done to release the Shares and Warrants from escrow except in accordance with this Agreement.  The Escrow Agent accepts its responsibilities hereunder and agrees to perform them in accordance with the terms hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will hold the Shares and Warrants in escrow and will deliver twenty five (25%) percent of each Investor&#146;s Shares and Warrants to such Investor on each Release Date.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Shares and Warrants will not be released from escrow, transferred within escrow or otherwise in any manner dealt with except in accordance with this Agreement or as may be required by reason of the bankruptcy of the Company, in which case the Escrow Agent </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676666.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 3 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>will hold the Shares and Warrants subject to this Agreement, for whatever person, firm or corporation shall be legally entitled to be or become the owner thereof.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>THE ESCROW AGENT</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In exercising the rights, duties and obligations prescribed or confirmed by this Agreement, the Escrow Agent will act honestly and in good faith and will exercise that degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Investor jointly and severally covenant and agree from time to time and at all times hereafter well and truly to save, defend and keep harmless and fully indemnify the Escrow Agent, its successors, and assigns, from and against all loss, costs, charges, suits, demands, claims, damages and expenses which the Escrow Agent, its successors or assigns may at any time or times hereafter bear, sustain, suffer or be put unto for or by reason or on account of its acting pursuant to this Agreement or anything in any manner relating thereto or by reason of the Escrow Agent&#146;s compliance in good faith with the terms hereof.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case proceedings should hereafter be taken in any court respecting the Shares and Warrants, the Escrow Agent will not be obliged to defend any such action or submit its rights to the court until it has been indemnified by other good and sufficient security against its costs of such proceedings.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will have no responsibility in respect of loss of the Shares and Warrants except the duty to exercise such care in the safekeeping thereof as it would exercise if the Shares and Warrants belonged to the Escrow Agent.  The Escrow Agent may act on the advice of counsel but will not be responsible for acting or failing to act on the advice of counsel.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent will not be bound in any way by any contract between the parties hereto whether or not it has notice thereof or of its terms and conditions and the only duty, liability and responsibility of the Escrow Agent will be to hold the Shares and Warrants as herein directed and to pay and deliver the same to such persons and other such conditions as are herein set forth.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In no event will the Escrow Agent be deemed to have assumed any liability or responsibility for the sufficiency, form and manner of making any notice or demand provided for under this Agreement or of the identity of the persons executing the same, but it shall be sufficient if any writing purporting to be such a notice, demand or protest is served upon the Escrow Agent in any manner sufficient to bring it to its attention.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Shares and Warrants are attached, garnished or levied upon under any court order, or if the delivery of such property is stayed or enjoined by any court order or if any court order, judgment or decree is made or entered affecting such property or affecting any act by the Escrow Agent, the Escrow Agent may, in its sole discretion, obey and comply with all writs, orders, judgments or decrees so entered or issued, whether with or without jurisdiction, notwithstanding any provision of this Agreement to the contrary.  If the Escrow Agent obeys and complies with any such writs, order, judgment or decrees it will not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676666.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 4 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>compliance, notwithstanding that such writs, orders, judgments or decrees may be subsequently reversed, modified, annulled, set aside or vacated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as herein otherwise provided, the Escrow Agent is authorized and directed to disregard in its sole discretion any and all notices and warnings which may be given to it by any of the parties hereto or by any other person, firm, association or corporation.  It will, however, obey the order, judgment or decree of any court of competent jurisdiction, and it is hereby authorized to comply with and obey such orders, judgements or decrees and in case of such compliance, it shall not be liable by reason thereof to any of the parties hereto or to any other person, firm, association or corporation, even if thereafter any such order, judgment or decree may be reversed, modified, annulled, set aside or vacated.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Escrow Agent receives any written instructions contrary to the instructions contained in this Agreement, the Escrow Agent may continue to hold the Shares and Warrants until the lawful determination of the issue between the parties hereto.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If protest is made to any action contemplated by the Escrow Agent under this Agreement, the Escrow Agent may continue to hold the Shares and Warrants until the right to the Shares and Warrants is legally determined by a court of competent jurisdiction or otherwise.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrow Agent may resign as Escrow Agent by giving not less then ten (10)&nbsp;days&#146; written notice thereof to each of the Company or the Investor.  The Company and the Investor may terminate the Escrow Agent by giving to the Escrow Agent a notice of termination executed by each of them not less than ten (10)&nbsp;days prior to the proposed date of termination.  The resignation or termination of the Escrow Agent will be effective and the Escrow Agent will cease to be bound by this Agreement on the date that is ten (10)&nbsp;days after the date of receipt of the termination notice given hereunder or on such other date as the Escrow Agent, the Company and the Investor may agree upon.  All indemnities granted to the Escrow Agent will survive the termination of this Agreement or the
resignation or termination of the Escrow Agent.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything herein to the contrary, the Escrow Agent may act upon any written instructions given by the Company and the Investor jointly.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary contained herein, in the event of any dispute arising between the Company and the Investor or between any other persons or between any of them with respect to this Agreement or any matters arising thereto, or with respect to the Shares and Warrants, the Escrow Agent may in its sole discretion deliver and interplead the Shares and Warrants into court and such delivery and interpleading will be an effective discharge to the Escrow Agent.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="241" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td width="145" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>COUNTERPARTS</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in several counterparts, each of which will be deemed to be an original and all of which will together constitute one and the same instrument.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676666.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 5 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="190" style=' border-collapse:collapse'>
    <tr>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td width="94" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font SIZE=2>GENERAL</font></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Agreement will be binding upon the parties hereto unless reduced to writing and signed by the parties.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement will enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors, and assigns.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The parties will execute and deliver all such further documents, do or cause to be done all such further acts and things, and give all such further assurances as may be necessary to give full effect to the provisions and intent of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement will be governed by and construed in accordance with the laws of British Columbia, Canada.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted to be given under this Agreement will be in writing and may be given by delivering, sending by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy, or sending by prepaid registered mail posted in Israel, Canada or the United States, the notice to the addresses set forth on the first page of this Agreement (or to such other address or facsimile number as any party may specify by notice in writing to another party).  Any notice delivered or sent by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy on a business day will be deemed conclusively to have been effectively given on the day the notice was delivered, or the transmission was
sent successfully, as the case may be.  Any notice sent by prepaid registered mail will be deemed conclusively to have been effectively given on the third business day after posting; but if at the time of posting or between the time of posting and the third business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>Notice may be delivered by facsimile to the following facsimile numbers:</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="287" style=' margin-left:1.0in;border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Escrow Agent:</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Attention: Bernard Pinsky</font></p> </td> </tr>
    <tr >
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fax No.:</font></p> </td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>604-687-6314</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Email:</font></p> </td>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>bip@cwilson.com</font></p> </td>
        <td  width="55">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="104" ></td>

        <td width="4" ></td>

        <td width="117" ></td>

        <td width="26" ></td>

        <td width="60" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:left;'><font size=2>Pluristem Life Systems, Inc.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="416" style=' border-collapse:collapse'>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Attention:</font></p> </td>
        <td width="95" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Yossi Keret</font></p> </td>
        <td   colspan="7">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="96" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Fax No.:</font></p> </td>
        <td  colspan="5" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>972-4-850-1085</font></p> </td>
        <td   colspan="4">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Email:</font></p> </td>
        <td  colspan="6" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>yossi@pluristem.com</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investors:</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>care of:</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Aaron Bookstein</font></p> </td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Email:</font></p> </td>
        <td  colspan="5" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>bwe2851@aol.com</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="96">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Tel. No.:</font></p> </td>
        <td  colspan="3" valign=top style='padding:3.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>718-851-2851</font></p> </td>
        <td   colspan="5">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.6</font></p> </td>
        <td  colspan="9" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Time is of the essence of this Agreement.</font></p> </td>
        <td  width="35">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="104" ></td>

        <td width="104" ></td>

        <td width="0" ></td>

        <td width="103" ></td>

        <td width="1" ></td>

        <td width="17" ></td>

        <td width="14" ></td>

        <td width="21" ></td>

        <td width="16" ></td>

        <td width="33" ></td>

        <td width="38" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676666.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<p style='page-break-before:always'></p>
<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 6 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement on the date of such communication by the party so delivering such copy.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is understood and agreed by the parties to this Agreement that the only duties and obligations of the Escrow Agent are those specifically stated herein and no other. Except for the disposition of the Shares, each Investor shall be recorded by the Company as owner of the Shares and Warrants and shall be entitled to exercise any right and be subject to any obligation as a stockholder and/or warrant holder, including, without limitation, any voting rights associated with the Shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each party has been advised and has opportunity to seek and obtain independent legal advice respecting all aspects of this Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>IN WITNESS WHEREOF the parties have caused this Agreement to be executed and delivered effective as of this 31st day of January, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="46" style=' border-collapse:collapse'>
    <tr>
        <td width="46" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Per:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>ESCROW AGENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>Per:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676666.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>- 7 -</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font SIZE=2>SCHEDULE A</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>LIST OF INVESTORS</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Investor</font></p> </td>
        <td width="192" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Units Held</font></p> </td>
        <td width="80" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Signature</font></p> </td> </tr></table>

<p style=' margin-bottom:6pt; margin-top:12pt;text-align:center;'><font size=3>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/BIP/676666.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>


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<TYPE>EX-10
<SEQUENCE>18
<FILENAME>ex10-18fsb2.htm
<DESCRIPTION>EXHIBIT 10.18
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.18</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS WARRANT TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>No. 129</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>WARRANT TO PURCHASE COMMON STOCK</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>OF</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC. </font></b><font size=2>(the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>VOID AFTER 17:00 p.m. N.Y. Time</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>on the last day of the Term (as set forth in Section 1 below)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This is to certify that, for value received, </font><b><font SIZE=2>STONESTREET LIMITED PARTNERSHIP</font></b><font size=2>, or its registered assigns (the &#147;</font><b><font size=2>Holder</font></b><font size=2>&#148;) is entitled to purchase, subject to the provisions of this Warrant, from the Company an aggregate of 1,000,000 fully paid and non-assessable shares of the Common Stock, as adjusted from time to time as provided below (&#147;</font><b><font size=2>Common Stock</font></b><font size=2>&#148; and such shares, the &#147;</font><b><font size=2>Warrant Shares</font></b><font size=2>&#148;) of the Company, as constituted on the date hereof (the &#147;</font><b><font size=2>Warrant Issue Date</font></b><font size=2>&#148;), upon surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, at the principal office of the Company referred
to below, and simultaneous payment therefor in lawful money of the United States, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Term of Warrant</font></u><font size=2>. Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time during the term commencing on the Warrant Issue Date and ending at the earlier of (i) November 30, 2006; or (ii) subject to notice requirements of Section 12(b) hereto, the acquisition of the Company by another entity by means of a reorganization, merger or consolidation which results in more than fifty percent (50%) of the outstanding voting securities of the surviving entity being held by persons who were not stockholders of the Company immediately prior to such transaction; or (iii) subject to notice requirements of Section 12(b) hereto, a sale, lease, assignment, transfer or other disposition of all or substantially all of the assets of the Company; (each of the
event in this subsections (ii) and (iii), a &#147;</font><b><font size=2>M&amp;A Transaction</font></b><font size=2>&#148;); (the </font><b><font size=2>&#147;Term&#148;</font></b><font size=2>), and shall be void thereafter. </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>D/ljm/677742.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise Price</font></u><font size=2>.  The purchase price at which this Warrant may be exercised shall be $0.30 per Warrant Share, as adjusted from time to time pursuant to Section 9 hereof (the </font><b><font size=2>&#147;Exercise Price&#148;</font></b><font size=2>).</font></p> </td> </tr>
    <tr >
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise of Warrant</font></u></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Manner of Exercise</font></u><font size=2>.  This Warrant is exercisable by the Holder in whole or in part, at any time and from time to time, during the Term, by the surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, to the Secretary of the Company at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), provided that the Holder shall also deliver to the Company, concurrent with such surrender, a check payable in lawful money of the United States for the aggregate Exercise Price for the Warrant Shares being purchased.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.2.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date.  As promptly as practicable on or after such date and in any event within thirty (30) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the remaining number of shares for
which this Warrant may then be exercised.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Fractional Shares or Scrip</font></u><font size=2>.  No fractional shares or scrip representing fractional share shall be issued upon the exercise of this Warrant.  In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall round up such fraction to the nearest whole number.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Replacement of Warrant</font></u><font size=2>.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of loss, theft, or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Compliance with Securities Laws</font></u><font size=2>.  This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Holder of this Warrant, by acceptance hereof, acknowledges that (i) this Warrant and the Warrant Shares to be issued upon exercise </font></p> </td> </tr>
    <tr>
        <td width="53" ></td>

        <td width="1" ></td>

        <td width="53" ></td>

        <td width="113" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>hereof are being acquired solely for the Holder&#146;s own account and not as an agent or nominee for any other party, and for investment; (ii) the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Act, any state securities laws or any applicable securities law of foreign jurisdictions, or any rules or regulations promulgated thereunder; and (iii) such Holder is either an &#147;accredited investor&#148; within the meaning of Securities and Exchange Commission Rule 501 of Regulation&nbsp;D, as presently in effect or is not a U.S. Person, as defined by Regulation S promulgated under the Act.</font></p>


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    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unless the Warrant Shares have been registered under the Act, all shares issuable hereunder shall bear the following legend: </font><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reservation of Stock</font></u><font size=2>.  The Company covenants that during the Term this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of common Stock upon the exercise of this Warrant and, from time to time, will take all steps necessary to provide sufficient reserves of shares of the Common Stock issuable upon the exercise of the Warrant.  The Company further covenants that all Warrant Shares will be duly authorized, validly issued, fully paid and nonassessable, and will be free from all taxes, liens and preemptive rights in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein).  The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares issued upon the exercise of this Warrant. </font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Amendments and Waivers</font></u><font size=2>.  This Warrant is being issued as one of a series of warrants issued by the Company on the date hereof and, accordingly, any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the holder of this Warrant.  Any amendment or waiver effected in such manner shall be effective to modify or waive the provisions of this Warrant. No waivers of, or exceptions to any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments</font></u><font size=2>.  The Exercise Price and the number of Warrant Shares purchasable hereunder are subject to adjustment from time to time during the Term of this Warrant as follows:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:35.45pt; border-collapse:collapse'>
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        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reclassification.</font></u><font size=2> If the Company at any time while this Warrant, or any portion thereof, remains outstanding and un-expired shall, by reorganization or reclassification of securities or otherwise (including in connection with any anti-dilution adjustments), change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such reorganization or reclassification or other change and the Exercise Price then in effect shall, concurrently with the
effectiveness of such reorganization or reclassification, be proportionately adjusted (provided the aggregate purchase price shall remain the same) such that this Warrant shall be exercisable into, in lieu of the number of Warrant Shares which the Holder would otherwise have been entitled to receive, a number of shares of such other class or classes of stock that would have been subject to receipt by the Holder had the Holder exercised the Warrant immediately before that change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Split, Subdivision or Combination of Shares</font></u><font size=2>.  If the Company at any time while this Warrant, or any portion hereof, remains outstanding and un-expired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased and the number of securities issuable upon exercise proportionately increased in the case of a split or subdivision or the Exercise Price of such securities shall be proportionately increased and the number of securities issuable upon exercise proportionately decreased in the case of a combination. Any adjustment under this Section&nbsp;9.2 shall become effective concurrently with the subdivision or combination becomes
effective.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.3.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments for Dividends in Stock or Other Securities or Property</font></u><font size=2>.  If, while this Warrant, or any portion hereof, remains outstanding and un-expired, the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property of the Company by way of dividend or otherwise, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon the exercise of this Warrant, and without payment of any additional consideration thereof, the amount of such other or additional stock or other
securities or property as aforesaid of the Company which such Holder would hold on the date of such </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 9. Any adjustment under this Section&nbsp;9.3 shall become effective as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.4.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Certificate as to Adjustments</font></u><font size=2>.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 9, the Company shall, upon the written request of any holder of this Warrant, furnish or cause to be furnished to such holder a certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.</font></p> </td> </tr>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.5.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Impairment</font></u><font size=2>.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all of the provisions of this Section 9 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of this Warrant against impairment.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Governing Law</font></u><font size=2>.  This Warrant and the legal relations between the parties arising hereunder shall be governed by and interpreted in accordance with the laws of the State of Israel without regard to its conflict of laws principles. The parties hereto agree to submit to the nonexclusive jurisdiction of the federal and state courts of the State of Israel with respect to the breach or interpretation of this Warrant or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Entire Agreement, Successors and Assigns</font></u><font size=2>.  This Warrant constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assign as a matter law, heirs, executors and administrators of the parties hereto.  The Holder may not assign, distribute or otherwise transfer this Warrant without the consent of the Company (and in such event subject to the provisions of Section 6 herein), except for a permitted transfer as such term is defined
in the Investors&#146; Rights Agreement dated as of the date hereof between the Company and certain of its stockholders, as amended from time to time.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Notices, Etc</font></u><font size=2>.   (a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of any Investor, to the address of such Investor as set forth on the signature page hereto or such other address of such Investor as shall be designated in writing from time to time by such Investor.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States or Israeli mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of such facsimile.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company shall give the Holder a written notice of impending M&amp;A Transaction or a transaction (including, without limitation, any reorganization, merger or consolidation, or sale or exchange of capital stock) as a result of which the stockholders of the Company immediately prior to such transaction receive cash, securities of a publicly traded company, or any other assets, or a combination thereof, as consideration, not later than twenty (20) business days prior to the stockholders&#146; meeting called to approve such transaction, or twenty (20) business days prior to the closing of such transaction, whichever is earlier, and shall also notify the Holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and
conditions of the impending transaction and the provisions of this Warrant in connection therewith, and the Company shall thereafter give the Holder prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) business days after the Company has given the first notice provided for herein or sooner than twenty (20) business days after the Company has given notice of any material changes provided for herein.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Delays or Omissions</font></u><font size=2>.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Warrant, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Subject to Section 8, any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Warrant, or any waiver on the part of any Holder of any provisions or conditions of this
Warrant, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Warrant or by law or otherwise afforded to any holder, shall be cumulative and not alternative.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Expenses</font></u><font size=2>.  Except as otherwise provided herein, the Company and the Holder shall each bear its own expenses incurred on its behalf with respect to this Warrant and the transactions contemplated hereby.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Severability</font></u><font size=2>.  In the event that any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Warrant shall continue in full force and effect without said provision, and such provision shall be given effect to the extent legally possible.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Titles and Subtitles</font></u><font size=2>.  The titles and subtitles used in this Warrant are used for convenience only and are not considered in construing or interpreting this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>17.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Survival</font></u><font size=2>.  The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>18.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Stockholder Rights</font></u><font size=2>. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote such Warrant Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.  </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>[</font><i><font size=2>Balance left blank intentionally</font></i><font size=2>]</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
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<pAGE>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>IN WITNESS HEREOF, Pluristem Life Systems, Inc. has caused this Warrant to be executed by its officers thereunto duly authorized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated:  January 31, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.87in; text-indent:0.49in;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="294" style=' margin-left:170.25pt;border-collapse:collapse'>
    <tr>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="227" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>__________________________</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="54" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="54" ></td>

        <td width="8" ></td>

        <td width="5" ></td>

        <td width="227" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>AGREED AND ACCEPTED BY:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="214" style=' border-collapse:collapse'>
    <tr>
        <td width="189" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>[</font></p> </td>
        <td width="25" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>]</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="371" style=' border-collapse:collapse'>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="324" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>_____________________________ (signature)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="63" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td> </tr>
    <tr >
        <td width="55" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td  width="8">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Address:  ___________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Fax: _______________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>NOTICE OF EXERCISE</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>To: Pluristem Life Systems, Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>NOTICE OF EXERCISE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The undersigned hereby elects to purchase __________ shares of the Common Stock of Pluristem Life Systems, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>(Name)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Address)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for the account of the undersigned and not as an agent or nominee for any other party, and for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Securities Act of 1933, as amended, any state securities laws or any applicable securities laws of foreign jurisdictions or any rules or regulations promulgated thereunder.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Signature)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Date)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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<TYPE>EX-10
<SEQUENCE>19
<FILENAME>ex10-19fsb2.htm
<DESCRIPTION>EXHIBIT 10.19
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<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font size=2>Exhibit 10.19</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font SIZE=2>NONE OF THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE 1933 ACT), OR ANY U.S. STATE SECURITIES LAWS, AND UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><b><font SIZE=2>WARRANT AGREEMENT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(Reg S or US Accredited Subscriber) </font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>THIS WARRANT AGREEMENT (the "Agreement") is made as of the 24th day of February, 2005 by and between Pluristem Life Systems, Inc. (the "Company"), whose business address is at Matam Centre, Building 20, Haifa, 31905 Israel, and Yokim Asset Management Corp. (the "Consultant"), whose address is 8 Avenue of Champel, 1206 Geneva, Switzerland.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><b><font SIZE=2>RECITALS</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt; text-indent:0.97in;text-align:justify;'><b><font SIZE=2>WHEREAS </font></b><font size=2>in consideration for certain corporate finance advisory services (the "Services") provided to the Company by the Consultant, the Company has agreed to issue to the Consultant 600,000 share purchase warrants, entitling the Consultant to purchase a total of 600,000 shares in the capital of the Company.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="463" style=' border-collapse:collapse'>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font SIZE=2>NOW, THEREFORE,</font></b><font size=2> the parties hereto agree as follows:</font><b></b></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>1.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ISSUANCE OF THE WARRANTS</font></b></u></p> </td>
        <td  width="172">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="211" ></td>

        <td width="186" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration for the Consultant having provided the Services to the Company, the Company hereby grants to the Consultant 600,000 common share purchase warrants (the "Warrants"), each entitling the Consultant to purchase one common share (each, a "Warrant Share") in the capital of the Company at an exercise price of U.S. $0.10 per Warrant Share on or before November 30, 2006, at which date any unexercised Warrants will expire.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>1.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Warrants and the Warrant Shares may be collectively referred to in this Agreement as the "Securities".</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="593" style=' border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2.</font></b></p> </td>
        <td width="276" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>DELIVERIES BY THE CONSULTANT</font></b></u></p> </td>
        <td  width="269">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.1</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Consultant must complete, sign and return to the Company the following documents:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(a) two (2) executed copies of this Agreement; and</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(b) if a U.S. resident, a Prospective Investor Suitability Questionnaire in the form attached as Schedule &#147;B&#148; of this Agreement (the "Questionnaire").</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="48" style=' margin-left:223.5pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 2 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>2.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant shall complete, sign and return to the Company as soon as possible, on request by the Company, any documents, questionnaires, notices and undertakings as may be required by regulatory authorities, stock exchanges and applicable law.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="257" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>3.</font></b></p> </td>
        <td width="209" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>EXERCISE OF WARRANTS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The right to purchase Warrant Shares conferred by the Warrants may be exercised by the Consultant by delivering to the Company a duly completed and executed subscription (the "Subscription Form") in the form attached hereto as Schedule &#147;A&#148; and a bank draft or certified cheque payable to or to the order of the Company for the aggregate exercise price in respect of the Warrant Shares subscribed for in lawful money of the United States of America, delivered to the Company at the address specified in Section 18.1 or such other address as the Company may advise the Consultant in writing pursuant to Section 18.1.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>3.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant agrees to complete, sign and return to the Company on request by the Company, any documents, questionnaires, notices and undertakings as may be required by regulatory authorities, stock exchanges and applicable law, or as the Company may deem reasonably necessary for the purpose of ensuring compliance with applicable securities laws in connection with the issuance of any shares upon the exercise of any Warrants. </font></p>


<table border="0" cellspacing=0 cellpadding=0 width="343" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>4.</font></b></p> </td>
        <td width="295" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>EFFECT OF EXERCISE OF WARRANTS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to applicable securities laws, upon exercise of any Warrants and payment of the applicable exercise price, the Warrant Shares so subscribed for will be deemed to have been issued and the Consultant will be deemed to have become the holder of record of such Warrant Shares on the date of such exercise and payment.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>4.2 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to applicable securities laws, within five business days after exercise of any Warrants and payment as aforesaid, the Company will forthwith cause to be sent to the Consultant a certificate representing the Warrant Shares so subscribed for, at the address specified in such Subscription Form.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="513" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>5.</font></b></p> </td>
        <td width="465" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exercise price and the number of Warrant Shares deliverable upon the exercise of the Warrants will be subject to adjustment in the event and in the manner following:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(a) If and whenever the common shares of the Company at any time outstanding are subdivided into a greater or consolidated into a lesser number of shares the exercise price will be decreased or increased proportionately as the case may be; and upon any such subdivision or consolidation the number of Warrant Shares deliverable upon the exercise of the Warrants will be increased or decreased proportionately as the case may be.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(b) In case of any capital reorganization or of any reclassification of the capital of the Company or in the case of the consolidation, merger or amalgamation of the Company with or into any other company, trust, partnership, or other entity, or a sale or conveyance of the property and assets of the Company as an entirety or substantially as an entirety (hereinafter collectively referred to as a "Reorganization"), each Warrant will after such Reorganization confer the right to purchase the number of shares or other securities of the Company (or of the company resulting from such Reorganization) which the Consultant would have been entitled to upon Reorganization if the Consultant had been a shareholder at the time of such Reorganization.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="48" style=' margin-left:223.5pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 3 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(c) In any such case, if necessary, appropriate adjustments will be made in the application of the provisions of this Section 5 relating to the rights and interest thereafter of the Consultant, as the holder of the Warrants, so that the provisions of this Section 5 will be made applicable as nearly as reasonably possible to any shares or other securities deliverable after the Reorganization on the exercise of the Warrants.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(d) The subdivision or consolidation of shares at any time outstanding into a greater or lesser number of shares (whether with or without par value) will not be deemed to be a Reorganization for the purposes of this Section 5.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(e) The adjustments provided for in this Section 5 are cumulative and will become effective immediately after the record date or, if no record date is fixed, the effective date of the event which results in such adjustments.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any questions will at any time arise with respect to the exercise price or any adjustment provided for in Section 5.1, such questions will be conclusively determined by the Company's auditors, or, if they decline to so act any other firm of certified public accountants that the Company may designate and who will have access to all appropriate records and such determination will be binding upon the Company and the holder of the Warrants.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="452" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>6.</font></b></p> </td>
        <td width="404" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>COVENANT BY THE COMPANY TO RESERVE SHARES</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company will reserve and there will remain unissued out of its authorized capital a sufficient number of common shares to satisfy the rights of purchase provided for herein.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="406" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>7.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ACKNOWLEDGEMENTS OF THE CONSULTANT</font></b></u></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.1</font></p> </td>
        <td width="292" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Consultant acknowledges and agrees that:</font></p> </td>
        <td  width="66">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(a) none of the Securities have been registered under the 1933 Act, or under any state securities or "blue sky" laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or to U.S. Persons, as that term is defined in Regulation S under the 1933 Act ("Regulation S"), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable state securities laws;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(b) the Consultant has received and carefully read this Agreement, and has carefully reviewed all of the Company's filings with the Securities and Exchange Commission (collectively the "Company Information");</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(c) the decision to execute this Agreement and acquire the Securities pursuant to this Agreement has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company and such decision is based entirely upon a review of the Company Information and any other public information which has been filed by the Company with the Securities and Exchange Commission in compliance, or intended compliance, with applicable securities legislation.  If the Company has presented a business plan to the Consultant, the Consultant acknowledges that the business plan may not be achieved or be achievable;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(d) the Consultant and the Consultant's advisor(s) have had a reasonable opportunity to ask questions of and receive answers from the Company in connection with the issuance of the Securities hereunder, and to obtain additional information, to the extent possessed or obtainable </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 4 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>without unreasonable effort or expense, necessary to verify the accuracy of the information contained in the Company Information;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(e) the books and records of the Company were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Consultant during reasonable business hours at its principal place of business and that all documents, records and books in connection with the issuance of the Securities hereunder have been made available for inspection by the Consultant, the Consultant's attorney and/or advisor(s);</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(f) the Company is entitled to rely on the representations and warranties and the statements and answers of the Consultant contained in this Agreement and the Questionnaire, and the Consultant will hold harmless the Company from any loss or damage it may suffer as a result of the Consultant's failure to correctly complete this Agreement or the Questionnaire;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(g) it will indemnify and hold harmless the Company and, where applicable, its respective directors, officers, employees, agents, advisors and shareholders from and against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Consultant contained herein, the Questionnaire or in any other document furnished by the Consultant to the Company in connection herewith being untrue in any material respect or any breach or failure by the Consultant to comply with any covenant or agreement made by the Consultant to the Company in connection therewith;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(h) the issuance of the Securities to the Consultant will not be completed if it would be unlawful;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(i) it has been advised to consult its own legal, tax and other advisors with respect to the merits and risks of an investment in the Securities and the Company, and with respect to applicable resale restrictions and it is solely responsible (and the Company is not in any way responsible) for compliance with applicable resale restrictions;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(j) none of the Securities are listed on any stock exchange or automated dealer quotation system and no representation has been made to the Consultant that any of the Securities will become listed on any stock exchange or automated dealer quotation system, except that currently certain market makers make market in the common shares of the Company on the Over-the-Counter Bulletin Board service of the National Association of Shares Dealers Inc.; </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(k) no documents in connection with the sale of the Securities hereunder have been reviewed by the Securities and Exchange Commission or any state securities administrators; and</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(l) there is no government or other insurance covering any of the Securities.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>8.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CONSULTANT</font></b></u></p> </td> </tr>
    <tr >
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.1</font></p> </td>
        <td width="539" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Consultant hereby represents and warrants to and covenants with the Company that:</font></p> </td>
        <td  width="30">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(a) the Consultant has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 5 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(b) the Consultant (i) has adequate net worth and means of providing for its current financial needs and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the Securities for an indefinite period of time;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(c) the Consultant is aware that an investment in the Company is speculative and involves certain risks, including the possible loss of the investment and the Consultant has carefully read and considered the matters set forth under the heading "Risk Factors" appearing in the Company Information;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(d) the Consultant has made an independent examination and investigation of an investment in the Securities and the Company and has depended on the advice of its legal and financial advisors and agrees that the Company will not be responsible in anyway whatsoever for the Consultant's decision to invest in the Securities and the Company;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(e) it has the requisite knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in the Securities and the Company;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(f) it is acquiring the Securities as principal for its own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such Securities; </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(g) the entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or the constating documents of, the Consultant or of any agreement, written or oral, to which the Consultant may be a party or by which the Consultant is or may be bound;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(h) the Consultant has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Consultant enforceable against the Consultant;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(i) it is able to fend for itself with respect to its investment in the Securities and has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(j) the Consultant is not acquiring the Securities as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(k) no person has made to the Consultant any written or oral representations:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(i) that any person will resell or repurchase any of the Securities;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(ii) that any person will refund the purchase price of any of the Securities;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(iii) as to the future price or value of any of the Securities; or</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>(iv) that any of the Securities will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Securities of the Company on any stock exchange or automated dealer </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 6 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>quotation system (except that currently certain market makers make market in the common shares of the Company on the Over-the-Counter Bulletin Board service of the National Association of Shares Dealers Inc.); and </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font size=2>(l) the Consultant is not resident in British Columbia and is not acquiring the Securities for such residents.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In this Agreement, the term "U.S. Person" shall have the meaning ascribed thereto in Regulation&nbsp;S and for the purpose of the Subscription includes any person in the United States.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font size=2>9.</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><b><font SIZE=2>REPRESENTATIONS AND WARRANTIES WILL BE RELIED UPON BY THE COMPANY</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant acknowledges that the representations and warranties contained herein are made by it with the intention that they may be relied upon by the Company and its legal counsel in determining the Consultant's eligibility to purchase the Securities under applicable securities legislation. The Consultant further agrees that by accepting delivery of the certificates representing the Securities on the Closing Date, it will be representing and warranting that the representations and warranties contained herein are true and correct as at the Closing Date with the same force and effect as if they had been made by the Consultant at the Closing Date and that they will survive the purchase by the Consultant of the Securities and will continue in full force and effect notwithstanding any subsequent disposition by the Consultant of any of the Securities.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>10.</font></b></p> </td>
        <td width="194" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>RESALE RESTRICTIONS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant acknowledges that any resale of the Securities will be subject to resale restrictions contained in the securities legislation applicable to the Consultant.  The Securities may not be offered or sold in the United States unless registered in accordance with federal securities laws and all applicable state securities laws or exemptions from such registration requirements are available.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>11</font></b></p> </td>
        <td width="297" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>LEGENDING OF SUBJECT SECURITIES</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>11.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant hereby acknowledges that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing any of the Securities will bear a legend in substantially the following form:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.5in;text-align:justify;'><font SIZE=2>THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>11.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Agreement.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>12.</font></b></p> </td>
        <td width="69" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>COSTS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 7 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>12.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Consultant acknowledges and agrees that all costs and expenses incurred by the Consultant (including any fees and disbursements of any special counsel retained by the Consultant) relating to the acquisition of the Securities shall be borne by the Consultant.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>13.</font></b></p> </td>
        <td width="151" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>GOVERNING LAW</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>13.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement is governed by the laws of the State of New York.  The Consultant irrevocably attorns to the jurisdiction of the State of New York.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>14.</font></b></p> </td>
        <td width="97" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>SURVIVAL</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the acquisition of the Securities by the Consultant pursuant hereto.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>15.</font></b></p> </td>
        <td width="120" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ASSIGNMENT</font></b></u></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.1</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>This Agreement and the Warrants granted hereunder are not transferable or assignable.</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>16.</font></b></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>SEVERABILITY</font></b></u></p> </td>
        <td  width="399">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="130" ></td>

        <td width="12" ></td>

        <td width="432" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>16.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.</font></p>


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        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>17.</font></b></p> </td>
        <td width="177" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ENTIRE AGREEMENT</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>17.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as expressly provided in this Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Agreement contains the entire agreement between the parties with respect to the issuance of the Securities and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by the Company or by anyone else.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="135" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>18.</font></b></p> </td>
        <td width="87" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>NOTICES</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>18.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted to be given to any of the parties to this Agreement will be in writing and may be given by prepaid registered post, electronic facsimile transmission or other means of electronic communication capable of producing a printed copy to the address of such party first above stated or such other address as any party may specify by notice in writing to the other parties, and any such notice will be deemed to have been given and received by the party to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time of mailing or between the time of mailing and the third business day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not
be effectively given until actually delivered.</font></p>


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    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>19.</font></b></p> </td>
        <td width="142" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>COUNTERPARTS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>19.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="48" style=' margin-left:223.5pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 8 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>20.</font></b></p> </td>
        <td width="176" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><b><font SIZE=2>ELECTRONIC MEANS</font></b></u></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>20.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date first above mentioned.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><b><font SIZE=2>IN WITNESS WHEREOF</font></b><font size=2> each of the parties has duly executed this Agreement as of the date first above mentioned. </font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Per: /s/ signed</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Authorized Signatory</font></p>

<p STYLE=' MARGIN-BOTTOM:0PT; MARGIN-TOP:24PT;TEXT-ALIGN:LEFT;'><B><FONT SIZE=2>YOKIM ASSET MANAGEMENT LTD.</FONT></B></P>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Per: /s/ signed</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Authorized Signatory</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><b><font SIZE=2>SCHEDULE A</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><i><b><font SIZE=2>WARRANT EXERCISE FORM</font></b></i></u></p>


<table border="0" cellspacing=0 cellpadding=0 width="235" style=' border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>TO:</font></p> </td>
        <td width="187" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Pluristem Life Systems, Inc.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>Matam Centre, Building 20</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>Haifa, 31905, Israel</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>The undersigned holder of the within Warrants hereby subscribes for ___________________ common shares (the &#147;Shares&#148;) of Pluristem Life Systems, Inc. (the &#147;Company&#148;) pursuant to the within Warrants at US$0.30 per Share on the terms specified in the said Warrants.  This subscription is accompanied by a certified cheque or bank draft payable to or to the order of the Company for the whole amount of the purchase price of the Shares.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The undersigned hereby directs that the Shares be registered as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="638" style=' border-collapse:collapse'>
    <tr>
        <td width="223" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><u><font SIZE=2>NAME(S) IN FULL</font></u><u></u></p> </td>
        <td width="24" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="222" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:12pt;margin-bottom:0pt'><u><font SIZE=2>ADDRESS(ES)</font></u><u></u></p> </td>
        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:12pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="151" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:0pt'><u><font SIZE=2>NUMBER OF SHARES</font></u><u></u></p> </td> </tr>
    <tr>
        <td width="223" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="222" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="151" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="223" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="222" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="151" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="223" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="222" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="151" valign=top style='border-top:solid black .5pt; border-left:none;border-bottom:solid black .5pt;border-right:none; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>
        <td width="223" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="24" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="222" valign=top style='border-top:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font SIZE=2>TOTAL:</font></p> </td>
        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="151" valign=top style='border-bottom:solid black .5pt; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:6.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>DATED this _____ day of ______________________, 200___.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>In the presence of:</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="336" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Signature of Witness</font></p> </td>
        <td width="188" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Signature of Warrant Holder</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><i><font size=2>Please print the name and address of the subscriber in full.</font></i></p>


<table border="0" cellspacing=0 cellpadding=0 width="67" style=' border-collapse:collapse'>
    <tr >
        <td width="54" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><i><font size=2>Name</font></i></p> </td>
        <td  width="13">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0in;margin-bottom:0pt'><i><font size=2>Address</font></i></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:24pt;text-align:center;'><u><i><b><font SIZE=2>INSTRUCTIONS FOR SUBSCRIPTION</font></b></i></u></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>The signature to the subscription must correspond in every particular with the name written upon the face of the Warrant without alteration or enlargement or any change whatever.  If there is more than one subscriber, all must sign.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>In the case of persons signing by agent or attorney or by personal representative(s), the authority of such agent, attorney or representative(s) to sign must be proven to the satisfaction of the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 2 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>If the Warrant certificate and the form of subscription are being forwarded by mail, registered mail must be employed.</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><u><b><font SIZE=2>SCHEDULE B</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:center;'><u><font SIZE=2>U.S. SECURITIES LAW QUESTIONNAIRE</font></u></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:justify;'><font size=2>All capitalized terms herein, unless otherwise defined, have the meanings ascribed thereto in the Subscription Agreement.</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style=' border-collapse:collapse'>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Subscriber covenants, represents and warrants to the Company that:</font></p> </td>
        <td  width="132">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber is a U.S. Person;</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the transactions detailed in the Subscription Agreement and it is able to bear the economic risk of loss arising from such transactions;</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber is acquiring the Securities for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the Securities in the United States or to U.S. Persons; provided, however, that the Subscriber may sell or otherwise dispose of any of the Securities pursuant to registration thereof pursuant to the </font><i><font size=2>Securities Act of 1933</font></i><font size=2> (the &#147;1933 Act&#148;) and any applicable State securities laws unless an exemption from such registration requirements is available or registration is not required pursuant to Regulation&nbsp;S under the 1933 Act or registration is otherwise not required under this 1933 Act;</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber satisfies one or more of the categories indicated below (please check the appropriate box):</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of US&nbsp;$5,000,000;</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A natural person whose individual net worth, or joint net worth with that person&#146;s spouse, on the date of purchase exceeds US&nbsp;$1,000,000;</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A natural person who had an individual income in excess of US&nbsp;$200,000 in each of the two most recent years or joint income with that person&#146;s spouse in excess of US&nbsp;$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="144" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A &#147;bank&#148; as defined under Section&nbsp;(3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section&nbsp;3(a)(5)(A) of the 1933 Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to Section&nbsp;15 of the </font><i><font size=2>Securities Exchange Act of 1934</font></i><font size=2> (United States); an insurance company as defined in Section&nbsp;2(13) of the </font></p> </td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="156" ></td>

        <td width="67" ></td>

        <td width="206" ></td>

        <td width="143" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>
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<table border="0" cellspacing=0 cellpadding=0 width="48" style=' margin-left:223.5pt;border-collapse:collapse'>
    <tr>
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 2 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:2.5in;text-align:justify;'><font size=2>1933 Act; an investment company registered under the </font><i><font size=2>Investment Company Act of 1940</font></i><font size=2> (United States) or a business development company as defined in Section&nbsp;2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section&nbsp;301(c) or (d) of the </font><i><font size=2>Small Business Investment Act of 1958</font></i><font size=2> (United States); a plan with total assets in excess of $5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan within the meaning of the </font><i><font size=2>Employee Retirement Income Security Act of 1974</font></i><font size=2> (United States) whose investment decisions are made by a plan
fiduciary, as defined in Section&nbsp;3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A private business development company as defined in Section&nbsp;202(a)(22) of the </font><i><font size=2>Investment Advisers Act of 1940</font></i><font size=2> (United States);</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td width="96" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 6</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A director or executive officer of the Company;</font></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person as described in Rule&nbsp;506(b)(2)(ii) under the 1933 Act; or</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>o</font></p> </td>
        <td  colspan="4" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Category 8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories; and</font></p> </td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber is not acquiring the Securities as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.</font></p> </td> </tr>
    <tr >
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Subscriber acknowledges and agrees that:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(a)</font></p> </td>
        <td  colspan="6" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>if the Subscriber decides to offer, sell or otherwise transfer any of the Securities, it will not offer, sell or otherwise transfer any of such securities directly or indirectly, unless:</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(i)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is to the Company;</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(ii)</font></p> </td>
        <td  colspan="5" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is made outside the United States in a transaction meeting the requirements of Rule&nbsp;904 of Regulation&nbsp;S under the 1933 Act and in compliance with applicable local laws and regulations;</font></p> </td> </tr>
    <tr>
        <td width="52" ></td>

        <td width="52" ></td>

        <td width="52" ></td>

        <td width="104" ></td>

        <td width="90" ></td>

        <td width="18" ></td>

        <td width="217" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 3 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='margin-left:1.0in; border-collapse:collapse'>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(iii)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the sale is made pursuant to the exemption from the registration requirements under the 1933 Act provided by Rule&nbsp;144 thereunder if available and in accordance with any applicable state securities or &#147;Blue Sky&#148; laws; or</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1.5in; text-indent:-0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


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        <td  width="48">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(iv)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Securities are sold in a transaction that does not require registration under the 1933 Act or any applicable U.S. state laws and regulations governing the offer and sale of securities, and it has prior to such sale furnished to the Company an opinion of counsel reasonably satisfactory to the Company;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(b)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>any of the Warrants may not be exercised in the United States or by or on behalf of a U.S. Person unless registered under the 1933 Act and any applicable state securities laws unless an exemption from such registration requirements is available;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(c)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber has not acquired the Securities as a result of, and will not itself engage in, any &#147;directed selling efforts&#148; (as defined in Regulation&nbsp;S under the 1933 Act) in the United States in respect of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities; provided, however, that the Subscriber may sell or otherwise dispose of any of the Securities pursuant to registration of any of the Securities pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements and as otherwise provided herein; &#145;</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(d)</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable U.S. State laws and regulations, the certificates representing any of the Securities will bear a legend in substantially the following form:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:1in;text-align:justify;'><font size=2>&#147;THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE &#147;SECURITIES ACT&#148;), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.&#148;</font></p>


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        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(e)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Company may make a notation on its records or instruct the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described herein; and</font></p> </td> </tr></table>

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</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>- 4 -</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(f)</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Subscriber, if an individual, is a resident of the state or other jurisdiction in its address on the Subscriber&#146;s execution page of the Subscription Agreement, or if the Subscriber is not an individual, the office of the Subscriber at which the Subscriber received and accepted the offer to acquire the Securities is the address listed on the Subscriber&#146;s execution page of the Subscription Agreement.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font SIZE=2>IN WITNESS WHEREOF</font></b><font size=2>, the undersigned has executed this Questionnaire as of the _____ day of February, 2005.</font></p>

<p STYLE=' MARGIN-BOTTOM:0PT; MARGIN-TOP:24PT;TEXT-ALIGN:LEFT;'><B><FONT SIZE=2>YOKIM ASSET MANAGEMENT LTD.</FONT></B></P>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Per: __________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Authorized Signatory</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>D/AZS/684796.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<SEQUENCE>20
<FILENAME>ex10-20fsb2.htm
<DESCRIPTION>EXHIBIT 10.20
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 10.20</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS WARRANT TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><b><font size=2>No. 165</font></b></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>WARRANT TO PURCHASE COMMON STOCK</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>OF</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC. </font></b><font size=2>(the &#147;</font><b><font size=2>Company</font></b><font size=2>&#148;)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>VOID AFTER 17:00 p.m. N.Y. Time</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>on the last day of the Term (as set forth in Section 1 below)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>This is to certify that, for value received, </font><b><font SIZE=2>YOKIM ASSET MANAGEMENT CORP.</font></b><font size=2>, or its registered assigns (the &#147;</font><b><font size=2>Holder</font></b><font size=2>&#148;) is entitled to purchase, subject to the provisions of this Warrant, from the Company an aggregate of 600,000 fully paid and non-assessable shares of the Common Stock, as adjusted from time to time as provided below (&#147;</font><b><font size=2>Common Stock</font></b><font size=2>&#148; and such shares, the &#147;</font><b><font size=2>Warrant Shares</font></b><font size=2>&#148;) of the Company, as constituted on the date hereof (the &#147;</font><b><font size=2>Warrant Issue Date</font></b><font size=2>&#148;), upon surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, at the principal office of the Company referred to
below, and simultaneous payment therefor in lawful money of the United States, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Term of Warrant</font></u><font size=2>. Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, at any time during the term commencing on the Warrant Issue Date and ending at the earlier of (i) November 30, 2006; or (ii) subject to notice requirements of Section 12(b) hereto, the acquisition of the Company by another entity by means of a reorganization, merger or consolidation which results in more than fifty percent (50%) of the outstanding voting securities of the surviving entity being held by persons who were not stockholders of the Company immediately prior to such transaction; or (iii) subject to notice requirements of Section 12(b) hereto, a sale, lease, assignment, transfer or other disposition of all or substantially all of the assets of the Company; (each of the
event in this subsections (ii) and (iii), a &#147;</font><b><font size=2>M&amp;A Transaction</font></b><font size=2>&#148;); (the </font><b><font size=2>&#147;Term&#148;</font></b><font size=2>), and shall be void thereafter. </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>D/MVV/686614.1</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise Price</font></u><font size=2>.  The purchase price at which this Warrant may be exercised shall be $0.10 per Warrant Share, as adjusted from time to time pursuant to Section 9 hereof (the </font><b><font size=2>&#147;Exercise Price&#148;</font></b><font size=2>).</font></p> </td> </tr>
    <tr >
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Exercise of Warrant</font></u></p> </td>
        <td  >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Manner of Exercise</font></u><font size=2>.  This Warrant is exercisable by the Holder in whole or in part, at any time and from time to time, during the Term, by the surrender of this Warrant and the Notice of Exercise annexed hereto, duly completed and executed on behalf of the Holder, to the Secretary of the Company at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), provided that the Holder shall also deliver to the Company, concurrent with such surrender, a check payable in lawful money of the United States for the aggregate Exercise Price for the Warrant Shares being purchased.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.2.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date.  As promptly as practicable on or after such date and in any event within thirty (30) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the remaining number of shares for
which this Warrant may then be exercised.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Fractional Shares or Scrip</font></u><font size=2>.  No fractional shares or scrip representing fractional share shall be issued upon the exercise of this Warrant.  In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall round up such fraction to the nearest whole number.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Replacement of Warrant</font></u><font size=2>.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of loss, theft, or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.</font></p> </td> </tr>
    <tr>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>
        <td  colspan="3" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Compliance with Securities Laws</font></u><font size=2>.  This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee.</font></p> </td> </tr>
    <tr >
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.1.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The Holder of this Warrant, by acceptance hereof, acknowledges that (i) this Warrant and the Warrant Shares to be issued upon exercise </font></p> </td> </tr>
    <tr>
        <td width="53" ></td>

        <td width="1" ></td>

        <td width="53" ></td>

        <td width="113" ></td>

        <td  ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>hereof are being acquired solely for the Holder&#146;s own account and not as an agent or nominee for any other party, and for investment; (ii) the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Act, any state securities laws or any applicable securities law of foreign jurisdictions, or any rules or regulations promulgated thereunder; and (iii) such Holder is either an &#147;accredited investor&#148; within the meaning of Securities and Exchange Commission Rule 501 of Regulation&nbsp;D, as presently in effect or is not a U.S. Person, as defined by Regulation S promulgated under the Act.</font></p>


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    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Unless the Warrant Shares have been registered under the Act, all shares issuable hereunder shall bear the following legend: </font><font SIZE=2>THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reservation of Stock</font></u><font size=2>.  The Company covenants that during the Term this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of common Stock upon the exercise of this Warrant and, from time to time, will take all steps necessary to provide sufficient reserves of shares of the Common Stock issuable upon the exercise of the Warrant.  The Company further covenants that all Warrant Shares will be duly authorized, validly issued, fully paid and nonassessable, and will be free from all taxes, liens and preemptive rights in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein).  The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares issued upon the exercise of this Warrant. </font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Amendments and Waivers</font></u><font size=2>.  This Warrant is being issued as one of a series of warrants issued by the Company on the date hereof and, accordingly, any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the holder of this Warrant.  Any amendment or waiver effected in such manner shall be effective to modify or waive the provisions of this Warrant. No waivers of, or exceptions to any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments</font></u><font size=2>.  The Exercise Price and the number of Warrant Shares purchasable hereunder are subject to adjustment from time to time during the Term of this Warrant as follows:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.1.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Reclassification.</font></u><font size=2> If the Company at any time while this Warrant, or any portion thereof, remains outstanding and un-expired shall, by reorganization or reclassification of securities or otherwise (including in connection with any anti-dilution adjustments), change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such reorganization or reclassification or other change and the Exercise Price then in effect shall, concurrently with the
effectiveness of such reorganization or reclassification, be proportionately adjusted (provided the aggregate purchase price shall remain the same) such that this Warrant shall be exercisable into, in lieu of the number of Warrant Shares which the Holder would otherwise have been entitled to receive, a number of shares of such other class or classes of stock that would have been subject to receipt by the Holder had the Holder exercised the Warrant immediately before that change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.2.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Split, Subdivision or Combination of Shares</font></u><font size=2>.  If the Company at any time while this Warrant, or any portion hereof, remains outstanding and un-expired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased and the number of securities issuable upon exercise proportionately increased in the case of a split or subdivision or the Exercise Price of such securities shall be proportionately increased and the number of securities issuable upon exercise proportionately decreased in the case of a combination. Any adjustment under this Section&nbsp;9.2 shall become effective concurrently with the subdivision or combination becomes
effective.</font></p> </td> </tr>
    <tr>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.3.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Adjustments for Dividends in Stock or Other Securities or Property</font></u><font size=2>.  If, while this Warrant, or any portion hereof, remains outstanding and un-expired, the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property of the Company by way of dividend or otherwise, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon the exercise of this Warrant, and without payment of any additional consideration thereof, the amount of such other or additional stock or other
securities or property as aforesaid of the Company which such Holder would hold on the date of such </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
<br>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.99in;text-align:justify;'><font size=2>exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called for during such period by the provisions of this Section 9. Any adjustment under this Section&nbsp;9.3 shall become effective as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.4.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Certificate as to Adjustments</font></u><font size=2>.  Upon the occurrence of each adjustment or readjustment pursuant to this Section 9, the Company shall, upon the written request of any holder of this Warrant, furnish or cause to be furnished to such holder a certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.</font></p> </td> </tr>
    <tr >
        <td  width="47">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td>
        <td width="48" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.5.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Impairment</font></u><font size=2>.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all of the provisions of this Section 9 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of this Warrant against impairment.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Governing Law</font></u><font size=2>.  This Warrant and the legal relations between the parties arising hereunder shall be governed by and interpreted in accordance with the laws of the State of Israel without regard to its conflict of laws principles. The parties hereto agree to submit to the nonexclusive jurisdiction of the federal and state courts of the State of Israel with respect to the breach or interpretation of this Warrant or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Entire Agreement, Successors and Assigns</font></u><font size=2>.  This Warrant constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assign as a matter law, heirs, executors and administrators of the parties hereto.  The Holder may not assign, distribute or otherwise transfer this Warrant without the consent of the Company (and in such event subject to the provisions of Section 6 herein), except for a permitted transfer as such term is defined
in the Investors&#146; Rights Agreement dated as of the date hereof between the Company and certain of its stockholders, as amended from time to time.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>
        <td  colspan="2" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Notices, Etc</font></u><font size=2>.   (a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted by any provision of this Agreement shall be given in writing and shall be delivered personally, by </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>courier, by facsimile or by registered or certified mail, postage prepaid, addressed (i) in the case of the Company, to its principal office; and (ii) in the case of any Investor, to the address of such Investor as set forth on the signature page hereto or such other address of such Investor as shall be designated in writing from time to time by such Investor.  Notices that are mailed shall be deemed received five (5) days after deposit in the United States or Israeli mail.  Notices sent by courier or overnight delivery shall be deemed received two (2) days after they have been so sent.  Notices sent by facsimile shall be deemed received on the day of written confirmation of receipt of such facsimile.</font></p>

<p style=' margin-bottom:0pt; margin-top:12pt; margin-left:0.49in;text-align:justify;'><font size=2>(b)</font><font size=1>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font size=2>The Company shall give the Holder a written notice of impending M&amp;A Transaction or a transaction (including, without limitation, any reorganization, merger or consolidation, or sale or exchange of capital stock) as a result of which the stockholders of the Company immediately prior to such transaction receive cash, securities of a publicly traded company, or any other assets, or a combination thereof, as consideration, not later than twenty (20) business days prior to the stockholders&#146; meeting called to approve such transaction, or twenty (20) business days prior to the closing of such transaction, whichever is earlier, and shall also notify the Holder in writing of the final approval of such transaction. The first of such notices shall describe the material terms and
conditions of the impending transaction and the provisions of this Warrant in connection therewith, and the Company shall thereafter give the Holder prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) business days after the Company has given the first notice provided for herein or sooner than twenty (20) business days after the Company has given notice of any material changes provided for herein.</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Delays or Omissions</font></u><font size=2>.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Warrant, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Subject to Section 8, any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Warrant, or any waiver on the part of any Holder of any provisions or conditions of this
Warrant, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Warrant or by law or otherwise afforded to any holder, shall be cumulative and not alternative.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>14.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Expenses</font></u><font size=2>.  Except as otherwise provided herein, the Company and the Holder shall each bear its own expenses incurred on its behalf with respect to this Warrant and the transactions contemplated hereby.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>15.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Severability</font></u><font size=2>.  In the event that any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Warrant shall continue in full force and effect without said provision, and such provision shall be given effect to the extent legally possible.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table  border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse; '>
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        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>16.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Titles and Subtitles</font></u><font size=2>.  The titles and subtitles used in this Warrant are used for convenience only and are not considered in construing or interpreting this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>17.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>Survival</font></u><font size=2>.  The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Warrant.</font></p> </td> </tr>
    <tr>
        <td width="47" valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>18.</font></p> </td>
        <td  valign=top style='padding:12.0pt 0in 0in 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>No Stockholder Rights</font></u><font size=2>. Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote such Warrant Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and such holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company.  </font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>[</font><i><font size=2>Balance left blank intentionally</font></i><font size=2>]</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>IN WITNESS HEREOF, Pluristem Life Systems, Inc. has caused this Warrant to be executed by its officers thereunto duly authorized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Dated:  February 24, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1.87in; text-indent:0.49in;text-align:left;'><b><font SIZE=2>PLURISTEM LIFE SYSTEMS, INC.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="146" style=' margin-left:170.25pt;border-collapse:collapse'>
    <tr>
        <td  colspan="3" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="80" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ signed</font></p> </td> </tr>
    <tr >
        <td  colspan="2" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td   colspan="2">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="54" valign=top >
            <p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td   colspan="3">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr>
        <td width="54" ></td>

        <td width="8" ></td>

        <td width="4" ></td>

        <td width="80" ></td> </tr> </table>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:2.36in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:3pt; margin-top:0pt;text-align:left;'><b><font SIZE=2>AGREED AND ACCEPTED BY:</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="214" style=' border-collapse:collapse'>
    <tr>
        <td width="189" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>[</font></p> </td>
        <td width="25" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>]</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="200" style=' border-collapse:collapse'>
    <tr>
        <td width="47" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="153" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ signed (signature)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="63" style=' border-collapse:collapse'>
    <tr>
        <td  colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td> </tr>
    <tr >
        <td width="55" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td  width="8">
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Address:  ___________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Fax: _______________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>NOTICE OF EXERCISE</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>To: Pluristem Life Systems, Inc.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font SIZE=2>NOTICE OF EXERCISE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>The undersigned hereby elects to purchase __________ shares of the Common Stock of Pluristem Life Systems, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>(Name)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Address)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for the account of the undersigned and not as an agent or nominee for any other party, and for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of any federal securities laws, including without limitation the Securities Act of 1933, as amended, any state securities laws or any applicable securities laws of foreign jurisdictions or any rules or regulations promulgated thereunder.</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Signature)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>___________________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.49in;text-align:justify;'><font size=2>(Date)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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<TYPE>EX-23
<SEQUENCE>21
<FILENAME>ex23-2fsb2.htm
<DESCRIPTION>EXHIBIT 23.2
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><font size=2>Exhibit 23.2</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><font size=2>Consent of Independent Registered Public Accounting Firm</font></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>We consent to the inclusion of our report dated September 28, 2004 in respect of the  financial statements of Pluristem Life Systems Inc. for the year ended June 30, 2004 and the period from inception (May 11, 2001) through June 30, 2004 in the Registration Statement (Form SB-2 dated April 26, 2005) of Pluristem Life Systems Inc. for the registration of up to 70,565,000 shares of its common stock. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3in; text-indent:0.5in;text-align:left;'><font size=2>/s/Kost Forer Gabbay &amp; Kasierer</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>A member of Ernst &amp; Young Global</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Haifa, Israel</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>April 26, 2005</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3in; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>


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