Exhibit 10.3

ESCROW AGREEMENT

ESCROW AGREEMENT entered into at the City of Vancouver, in the Province of
British Columbia on 18th day of April, 2009.

AMONG:  

BRAINTECH INC., a corporation duly incorporated under the laws of the State of
Nevada with its principal place of business located at Suite 350, 1750 Tyson
Boulevard, Fairfax County, McLean, Virginia USA 22102-4208

 

(“Braintech”)

AND:  

BABAK HABIBI, an individual with a principal address at 1680 Orkney Place, North
Vancouver, BC CANADA V7H 2Z1

 

(“Habibi”)

AND:  

COLONIAL STOCK TRANSFER COMPANY, INC. a duly incorporated company under the laws
of the State of Utah with its principal place of business at Suite 100, 66
Exchange Place, Salt Lake City, Utah USA 84111

 

(“Depositary”)

(Braintech, Habibi and Depositary are collectively referred to as the
“Parties’).

WHEREAS:

A.

Braintech and Habibi are parties to a consulting agreement dated April 18, 2009
relating to certain consulting services that Habibi is to provide to Braintech
between April 27, 2009 and ending January 27, 2012 (the “Consultancy
Agreement”);

  B. Pursuant to the terms of the Consultancy Agreement, Braintech has agreed to
make monthly payments to Habibi for Consulting Services;   C.

Pursuant to the terms of the Consultancy Agreement, Braintech has undertaken to
deposit in trust with the Depositary 1,500,000 million registered shares of
common stock of Braintech as security for monthly payments owing to Habibi under
the Consultancy Agreement (the “Escrow Amount”); and

--------------------------------------------------------------------------------

- 2 -

D. The Parties, for good and valuable consideration, wish to set out the terms
by which the Escrow Amount will be dealt with herein.  

NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

  1.

Definitions

  1.1 Unless the context otherwise requires, capitalized terms herein shall have
the meaning ascribed to them in the Consultancy Agreement.   2.

Escrow Amount

  2.1 On or before June 1, 2009, Braintech shall deposit with the Depositary the
Escrow Amount, in negotiable form with proper endorsements, Medallion Signature
Guarantee, and attorney’s opinion if required to confirm the registration status
of shares. The Depositary shall acknowledge receipt thereof by delivering a
notice of confirmation to Habibi and Braintech within 7 days.   2.2 The
Depositary agrees to hold the Escrow Amount subject to the terms and conditions
hereinafter set forth.   2.3 The Escrow Amount shall be held by the Depositary
for the benefit of Habibi and Braintech in trust.

 

3.

Release of Escrow Amount

  3.1 From time to time, in the period beginning on the date hereof and ending
February 2012, the Parties may deliver certain notices set out under this
Agreement and the Consultancy Agreement.   3.2 Pursuant to Article 4.4 of the
Consultancy Agreement, within fifteen (15) days of receipt of delivery of
written Notice of Receipt of Monthly Payment from Habibi, the Depositary shall
distribute to Braintech 50,000 registered shares of Braintech from the Escrow
Amount.   3.3 Pursuant to Article 4.8 of the Consultancy Agreement, within
fifteen (15) days of receipt of delivery of written Notice of Continued Failure
to Pay, the Depositary shall distribute to Habibi 100,000 registered shares of
Braintech from the Escrow Amount.   4.

Depositary Obligations

  4.1 The Depositary shall not be bound in any way by any Agreement among the
other parties hereto or otherwise, whether or not the Depositary has knowledge
thereof or has intervened therein. The Depositary’s only duty, responsibility
and obligation shall be to hold the Escrow Shares as provided for herein, and to
disburse the Escrow Shares in accordance with the terms and conditions of this
Agreement.

--------------------------------------------------------------------------------

- 3 -

4.2 The Depositary shall not be required in any way to determine the validity of
any notice delivered under this Agreement provided that such notice, on its
face, purports to be in the required form, and purports to be properly executed.
Without limiting the generality of the foregoing, the Depositary shall have full
authority to act in accordance with any such notice and to assume the validity
and accuracy of any legal or actual situation described in such notice. The
Depositary shall be protected in acting and relying reasonably upon any written
notice, direction, instruction, order, certificate, confirmation, request,
waiver, consent, receipt, statutory declaration or other paper or document
(collectively, the “Documents”) furnished to it and signed by any person
required to or entitled to execute and deliver to the Depositary any such
Documents in connection with this Agreement, not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth
and accuracy of any information therein contained, which it in good faith
believes to be genuine.   4.3 The Depositary shall be entitled to rely and act
upon the opinion or advice of legal counsel in the performance of its duties
hereunder. Nothing contained in the preceding sentence shall be construed as
requiring the Depositary to seek such legal counsel. The Depositary shall incur
no liability and the other parties hereby agree, solidarily, to hold and save it
harmless if the Depositary acts in accordance with the opinion or advice of its
legal counsel.   4.4 Each of the other parties hereto hereby agree, jointly and
severally, to indemnify and hold harmless the Depositary from and against any
liability, loss, claim, action, cost and expense, including legal fees and
disbursements, (collectively, the “Liabilities”) which may be asserted against
the Depositary arising from or out of this Agreement, provided that they shall
not be required to indemnify the Depositary in the event that such Liabilities
are a result of the gross negligence or willful misconduct of the Depositary.
This provision shall survive the resignation or removal of the Depositary or the
termination of this Agreement.   4.5 The parties may remove the Depositary on
delivery of notice to the Depositary and upon the appointment of a successor
Depositary by the other parties, the Depositary shall be discharged from all
further duties and obligations hereunder. The successor Depositary shall be
bound by the terms of this Agreement.   4.6 The Depositary may resign on thirty
(30) days notice to Habibi and Braintech.   5.

Miscellaneous

  5.1 The Parties agree that any and all costs associated with the transfer of
Braintech Shares from and to the Depositary and any and all Depositary fees will
be paid by solely Braintech.

--------------------------------------------------------------------------------

- 4 -

5.2 The preamble and Schedules to this Agreement (a copy of which the parties
hereto acknowledge receiving) shall form an integral part hereof as though set
forth herein at length.   5.3 This Agreement shall be binding upon and enure to
the benefit of the parties hereto and their heirs, executors, successors,
administrators and permitted assigns.   5.4 All notices and other communications
between the parties hereunder shall be in writing and shall be deemed to have
been given if delivered by registered mail or by confirmed facsimile to the
parties at the following addresses or facsimile numbers (or at such other
address for such party as shall be specified in like notice):

  (a) if to Habibi, at:   1680 Orkney Place, North Vancouver, BC. CANADA V7H 2Z1
  Attention: Babak Habibi Facsimile: (604) 484-5654   (b) if to Braintech, at:  
Suite 350 1750 Tyson Boulevard Fairfax County, McLean, Virginia USA 22102-4208  
Attention: Jeff Milton Facsimile: (703) 637-9772   with a copy to:   Heenan
Blaikie LLP Suite 2200 1055 West Hastings Street Vancouver, BC CANADA V6E 2E9  
Attention: Peter A. Gall, Q.C. Facsimile: 604.669.5101   (c) if to the
Depositary, at:   Suite 100 66 Exchange Place Salt Lake City, Utah USA 84111  
Attention: Kathy Carter Facsimile: 801.355.6505

--------------------------------------------------------------------------------

- 5 -

Any notice or other communication given by registered mail or facsimile shall be
deemed to have been given and received upon delivery thereof and if given by
registered mail or facsimile telecopy shall be deemed to have been given and
received on the date of receipt thereof unless such day is not a business day in
which case it shall be deemed to have been given and received upon the
immediately following business day.   5.5 In the event that a party delivers a
notice to another party that party shall, at the same time, deliver a copy of
the notice to the other Parties.   5.6 Any party hereto may change its address
for service from time to time to some other address by notice given in
accordance with the foregoing.   6.

Governing Law

  6.1 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia and the Parties attorn to the
jurisdiction of British Columbia for the resolution of any disputes in any way
connected with this Agreement.   7.

Modification

  7.1 This Agreement may not be changed, modified or supplemented except in
writing signed by each Party.   8.

Time of Essence

  8.1 Time is of the essence of this Agreement.   9.

Reference to Currency

  9.1 All references to dollar amounts expressed in this Agreement are to
Canadian Dollars.   10.

Severability

  10.1 In case any provision of this Agreement or any of the other Loan
documents shall be invalid, illegal or unenforceable, such provision shall be
severable from the rest of this Agreement or such Loan Document, as the case may
be and the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.   11.

Counterparts

  14.1 This Agreement may be executed in any number of counterparts and when
taken together shall constitute a single agreement. Delivery of any counterpart
of this Agreement may be made by facsimile transmission and/or by email in pdf
format and if so delivered shall be deemed to be an original document. Original
documents are to be delivered within 7 business days from the date of execution
and delivery by facsimile transmission or email.

--------------------------------------------------------------------------------

- 6 -

IN WITNESS WHEREOF, the parties have signed this Agreement at the place and on
the day and year first above written.

BABAK HABIBI

    Babak Habibi  

BRAINTECH, INC.

    Per:   Frederick Weidinger Chairman and CEO  

COLONIAL STOCK TRANSFER COMPANY, INC.

    Per:   Kathy Carter Title: