EXHIBIT 10.3
    

    
      NON-COMPETITION AGREEMENT
    

    
      THIS NON-COMPETITION AGREEMENT (this “Agreement”)
      is being executed and delivered as of August 12, 2008, by ADIL SHAFI
      (the “Seller”) in favor of, and for the benefit of
      BRAINTECH, INC., a Nevada corporation (“Buyer”), SHAFI,
      INC., a Michigan corporation (“SI”), and SHAFI INNOVATION,
      INC., a Michigan corporation (“SII”)(SI and SII are also
      referred to herein each, as a “Company” and together, the “Companies”),
      and each of the Buyer’s and each Company’s present and future Affiliates
      (as defined below), successors and direct and indirect subsidiaries
      (including the Buyer and the Companies, collectively, the “Covered
      Parties” and each a “Covered Party”).  
    

    
      RECITALS
    

    
      A.        As the sole stockholder, director and officer of each
      of the Companies, the Seller has obtained extensive and valuable
      knowledge and confidential information concerning the business of the
      Companies and has contributed to the value of the Companies.
    

    
      B.        Pursuant to a Share Purchase Agreement dated of even
      date herewith, by and among the Buyer, the Companies, and the Seller
      (the “Purchase Agreement”), the Seller is selling to the
      Buyer, and the Buyer is purchasing, all of the issued and outstanding
      capital stock of SI and 80% of the outstanding capital stock of SII (the
      “Transaction”).
    

    
      C.        In connection
      with the Transaction (and as a condition to the consummation of such
      Transaction), and to enable the Buyer to secure more fully the benefits
      of such Transaction, including the protection and maintenance of the
      Company’s goodwill and confidential information, the Buyer has required
      that the Seller enter into this Agreement.
    

    
      D.        The Seller is
      entering into this Agreement in order to induce the Buyer to consummate
      the transactions contemplated by the Purchase Agreement, pursuant to
      which the Seller will receive a material benefit.
    

    
      AGREEMENT
    

    
               In order to induce the Buyer to consummate the Transaction and
      the other transactions contemplated by the Purchase Agreement, and for
      other good and valuable consideration, the receipt and sufficiency of
      which is hereby acknowledged, the Seller agrees as follows:
    

    
      1.        Restriction on Competition.
    

    
                          (a)       Certain
      Definitions.  
    

    
                                    (i)       The SHAFI Companies are engaged
      in the Machine Vision Software industry (the “Business”).
    

    
                                    (ii)      The term “Person”
      means an individual, a corporation, an association, a partnership,
      limited liability company, joint stock company, an estate, a trust or
      any other entity or organization.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
                                    (iii)     As used herein “Affiliate”
      means any person or entity that, directly or indirectly, Controls, is
      Controlled by, or is under common Control with or of, such entity.  The
      term “Control” (including, with correlative meaning, the terms
      “Controlled by” and “under common Control with”), as used with respect
      to any entity, means the possession, directly or indirectly, of the
      power to direct or cause the direction of the management and policies of
      such entity, whether through the ownership of voting securities, by
      contract or otherwise.    
    

    
                          (b)       Non-Competition.  For
      a period commencing upon the date hereof and ending upon the later of
      three (3) years from the date hereof or one (1) year from the date
      Seller’s employment with Buyer terminates (the “Restricted
      Period”), Seller shall not directly or indirectly (whether as an
      employee, operator, agent, independent contractor, consultant, owner,
      director, officer, shareholder, investor, general or limited partner,
      joint venturer, guarantor or any other relationship similar to the
      foregoing, except for Passive Investments), anywhere in North America or
      Europe:
    

    
                                    (i)       engage in or assist any other
      person or entity to engage in any business which competes with the
      Business or any business in which any Covered Party is engaged at any
      time during the twelve (12) months prior to the termination of Seller’s
      employment with Buyer (collectively, the “Restricted Business”);
      or
    

    
                                    (ii)      provide to any other entity that
      was a client or prospective client of any Covered Party as of the date
      of termination of Seller’s employment with Buyer or during the twelve
      (12) months prior to such termination, products or services directly or
      indirectly competitive with the Restricted Business;
    

    
      provided, however, that Seller may purchase or otherwise acquire up to
      two percent (2%) of any class of the securities of any Person (but may
      not otherwise participate or assist in the activities of such Person)
      engaged in the Restricted Business if such securities are listed on any
      national or regional securities exchange or have been registered under
      Section 12(g) of the Securities Exchange Act of 1934 (“Passive
      Investments”).
    

    
      2.        No Solicitation; No Disparagement.  
    

    
                          (a)       No
      Solicitation.  Unless otherwise agreed in writing, during the
      Restricted Period Seller shall not directly or indirectly engage in the
      following:
    

    
                                    (i)       Solicit or knowingly encourage
      any employee or independent contractor of any Covered Company to leave
      such employment or service (except for the termination of employees or
      independent contractors in the performance of Seller’s duties to Buyer)
      provided that any general solicitation of employment or service,
      directly or indirectly by  Seller through newspapers, periodicals, or
      trade publications not specifically directed at any employee or
      independent contractor of any Covered Company shall not constitute a
      breach of his non-solicitation obligation under this clause (a)(i); or
    

    
                                    (ii)      Knowingly hire any person within
      less than one (1) year after that person has voluntarily terminated his
      employment or service as an independent contractor with any Covered
      Company.
    

    
      
        

        

      

      
        
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                          (b)       Non-Disparagement.  The
      Seller agrees that, during the Restricted Period, the Seller will not
      knowingly engage in any conduct that involves the making or publishing
      of written or oral statements or remarks (including, without limitation,
      the repetition or distribution of derogatory rumors, allegations,
      negative reports or comments) that are disparaging, deleterious or
      damaging to the integrity, reputation or good will of one or more
      Covered Parties or their respective management, officers, employees,
      independent contractors or consultants.  This provision is not
      applicable to truthful testimony obtained through subpoena or to any
      truthful information provided pursuant to investigation by any
      governmental body.
    

    
      3.        Early Termination of Restricted Period.  If,
      and only if, Seller’s employment with Buyer pursuant to that certain
      Employment Agreement between Buyer and Seller, dated of even date
      herewith (the “Employment Agreement”), is terminated by
      Buyer without “Good Cause” (as defined in the Employment Agreement) or
      by Seller for “Good Reason” (as defined in the Employment Agreement) in
      either case as contemplated by Section 12(g) thereof, and Buyer fails to
      satisfy its obligations to pay the severance pay required under said
      Section 12(g), the Restricted Period shall end on the date that is
      thirty (30) days after the effective date of such termination.        
    

    
      4.        Representations and Warranties.  The
      Seller represents and warrants, to and for the benefit of the Covered
      Parties, that: (a) the Seller has full power and capacity to execute and
      deliver, and to perform all of the Seller’s obligations under, this
      Agreement; and (b) neither the execution and delivery of this Agreement
      nor the performance of the Seller’s obligations hereunder will result
      directly or indirectly in a violation or breach of any agreement or
      obligation by which the Seller is bound.
    

    
      5.        Injunctive Relief.  The
      Seller agrees that, in the event of any breach or threatened breach by
      the Seller of any covenant or obligation contained in this Agreement,
      each applicable Covered Party will be entitled (in addition to any other
      remedy at law or in equity that may be available, including monetary
      damages) to obtain an injunction restraining such breach or threatened
      breach, without the necessity of proving actual damages or posting bond
      or security, which Seller expressly waives, and the Seller hereby
      consents to any such remedy in connection with any such breach.
    

    
      6.        Integration and Non-Exclusivity.  This
      Agreement and the Purchase Agreement and the documents referenced herein
      and therein contain the entire agreement between the Seller and the
      Covered Parties concerning their subject matter and no other
      representations, promises, agreements or understandings, written or
      oral, concerning such subject matter will be of any force or
      effect.  Notwithstanding the foregoing, the rights and remedies of the
      Covered Parties under this Agreement are not exclusive of or limited by
      any other rights or remedies which they may have, whether at law, in
      equity, by contract or otherwise, all of which will be cumulative (and
      not alternative).  Without limiting the generality of the foregoing, the
      rights and remedies of the Covered Parties, and the obligations and
      liabilities of the Seller, under this Agreement, are in addition to
      their respective rights, remedies, obligations and liabilities (i) under
      the laws of unfair competition, misappropriation of trade secrets, or
      other requirements of statutory or common law, or any applicable rules
      and regulations and (ii) conferred by contract, including the Purchase
      Agreement and any other written agreement between the Seller and any of
      the Covered Parties.  Nothing in the Purchase Agreement will limit any
      of the obligations, liabilities, rights or remedies of any party under
      this Agreement, nor will any breach of the Purchase Agreement or any
      other agreement between the Seller and any of the Covered Parties limit
      or otherwise affect any right or remedy of the Covered Parties under
      this Agreement.  If any term or condition of the Non-Disclosure
      Agreement or any other agreement between the Seller and any of the
      Covered Parties conflicts or is inconsistent with the terms and
      conditions of this Agreement, the more restrictive terms will control.
    

    
      
        

        

      

      
        
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      7.        Severability; Reformation.
    

    
      (a)                          If
      any provision of this Agreement, or any part thereof, is found or held
      to be invalid or unenforceable in any jurisdiction, then (i) such
      provision or part thereof will be deemed amended to conform to
      applicable laws so as to be valid and enforceable to the fullest
      possible extent, (ii) the invalidity or unenforceability of such
      provision or part thereof will not affect the validity or enforceability
      of such provision or part thereof under any other circumstances or in
      any other jurisdiction, and (iii) the invalidity or unenforceability of
      such provision or part thereof will not affect the validity or
      enforceability of the remainder of such provision or the validity or
      enforceability of any other provision of this Agreement.  Each provision
      and part thereof of this Agreement is separable from every other
      provision and part thereof of this Agreement.
    

    
      (b)                          If
      any court of competent jurisdiction determines that any part hereof is
      unenforceable because of the duration, geographic area covered, scope of
      such provision, or otherwise, such court will have the power to reduce
      the duration, geographic area covered or scope of such provision, as the
      case may be, and, in its reduced form, such provision will then be
      enforceable.  The Seller will, at the Buyer’s request, join the Buyer in
      requesting that such court take such action.
    

    
      8.        Governing Law; Jurisdiction; Venue; Waiver of Jury Trial.  
    

    
      (a)                          This
      Agreement will be construed, enforced and governed by the laws of the
      State of Michigan without regard to its conflicts of law provisions.
    

    
      (b)                          The
      parties agrees that any legal action or other legal proceeding arising
      out of or relating to this Agreement may be brought in the state or
      federal court of proper jurisdiction in the State of Michigan (or in any
      court in which appeal from such courts may be taken).  The parties:
    

    
      (i)                                    agree
      that any state and federal court in the State of Michigan will be deemed
      to be a convenient forum;
    

    
      (ii)                                   after
      valid service of process has been effected, agrees not to assert (by way
      of motion, as a defense or otherwise), in any such legal proceeding
      commenced in any state or federal court in the State of Michigan, any
      claim that the party is not subject to personal jurisdiction of such
      court, that such legal proceeding has been brought in an inconvenient
      forum, that the venue of such proceeding is improper or that this
      Agreement may not be enforced in or by such court; and
    

    
      
        

        

      

      
        
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      (iii)                                  KNOWINGLY,
      VOLUNTARILY AND INTENTIONALLY IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY
      JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
      UNDER, OR IN CONNECTION WITH THIS AGREEMENT.
    

    
      9.        Waiver.  Any
      delay or omission by a party in exercising its rights under this
      Agreement, or failure to insist upon strict compliance with any term,
      covenant, or condition of this Agreement will not be deemed a waiver of
      such term, covenant, condition or right, nor will any waiver or
      relinquishment of any right or power under this Agreement at any time or
      times be deemed a waiver or relinquishment of such right or power at any
      other time or times.  No waiver will be effective unless it is expressly
      set forth in a written instrument executed by the waiving party and any
      such waiver will have no effect except in the specific instance in which
      it is given.
    

    
      10.       Successors and Assigns.  This
      Agreement will be binding upon the Seller and the Seller’s estate,
      successors and assigns, and will inure to the benefit of the Covered
      Parties, and their respective successors and assigns.  Each
      Covered Party may freely assign any or all of its rights under this
      Agreement, at any time, in whole or in part, to any person or entity
      which purchases a majority of or all of the equity securities (whether
      by equity sale, merger or otherwise) or substantially all of the assets
      of such Covered Party, without obtaining the consent or approval of the
      Seller.  The Seller agrees that the obligations of the Seller under this
      Agreement are personal and will not be assigned by the Seller.
    

    
      11.       Third Party Beneficiaries.  Each
      of the Buyer’s and each Company’s present and future Affiliates,
      successors and direct and indirect subsidiaries are third party
      beneficiaries to all of the rights conferred to the Covered Parties by
      the Seller under this Agreement.
    

    
      12.       Construction.  Any
      rule of construction to the effect that ambiguities are to be resolved
      against the drafting party will not be applied in the construction or
      interpretation of this Agreement.
    

    
      13.       Survival of Obligations.  The
      expiration of the Restricted Period will not relieve the Seller of any
      obligation or liability arising from any breach by the Seller of
      this Agreement during the Restricted Period.
    

    
      14.       Amendment.  This
      Agreement may not be changed in any respect, except by a written
      agreement executed by the Seller and the Buyer (or any successor or
      assign).
    

    
      15.       Notices.  All
      notices, requests, demands and other communications pertaining to this
      Agreement or otherwise required or permitted hereunder (“Notices”)
      will be in writing addressed as follows:
    

    
      If to the Seller, to the address below the Seller’s name on the
      signature page to this Agreement; and
    

    
      If to the Buyer (or any other Covered Party):
    

    
      
        

        

      

      
        
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            BRAINTECH, INC.
          

        	

        
	

        	
          
            #102 - 930 West 1st Street
          

        	

        
	

        	
          
            North Vancouver, B.C. Canada
          

        	

        
	

        	
          
            V7P 3N4
          

        	

        
	

        	
          
            Attention: Frederick Weidinger, CEO
          

        	

        
	

        	
          
            Facsimile: (604) 988-6440
          

        	

        
	

        	

        	
           
        
	
          
            with a copy to:
          

        	
          
            Greenberg Traurig, LLP
          

        	

        
	

        	
          
            1750 Tysons Boulevard, Suite 1200
          

        	

        
	

        	
          
            McLean, Virginia 22102
          

        	

        
	

        	
          
            Attention: Jeffrey R. Houle, Esq.
          

        	

        
	

        	
          
            Facsimile: (703) 714-8336
          

        	

        


    

    
      Notices will be deemed given five (5) “Business Days”
      (which means a day, other than a Saturday or Sunday, on which commercial
      banks in the State of Michigan are open for the general transaction of
      business) after being mailed by certified or registered United States
      mail, postage prepaid, return receipt requested, or on the first
      Business Day after being sent, prepaid, by nationally recognized
      overnight courier that issues a receipt or other confirmation of
      delivery.  Notices delivered via facsimile will be deemed given when
      actually received (or refused) by the recipient, provided that by
      no later than two (2) days thereafter such notice is confirmed in
      writing and sent via one of the methods described in the previous
      sentence.  Notices delivered by personal service will be deemed given
      when actually received by the recipient.  Any party may change the
      address to which notices under this Agreement are to be sent to it by
      giving written notice of a change of address in the manner provided in
      this Agreement for giving notice.
    

    
      16.       Electronic Signature.  This
      Agreement may be executed by transfer of an originally signed document
      by facsimile, e-mail or other electronic means, any of which will be as
      fully binding as an original document.
    

    
      [Signature on following page]
    

    
      
        

        

      

      
        
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               IN WITNESS WHEREOF,
      the Seller has duly executed and delivered this Non-Competition
      Agreement as of the date first above written.
    

    
      ADIL SHAFI
    

    

    

    
      Address:                                                    
    

    

    

    
      Telephone No.:(     )                                       
    

    
      Facsimile No. :(    )                                       
    

    
      Agreed to and Acknowledged:
    

    
      BRAINTECH, INC.
    

    
      By:  _______________________
    

    
             Name:  
    

    
             Title:
    

    
      [Signature page to Non-Competition Agreement]