MUTUAL RELEASE AND SETTLEMENT AGREEMENT

Dated:  February 1, 2001

BETWEEN:

                 MANFRED KURSCHNER ("Kurschner")
                 and JMF MANAGEMENT INC. ("JMF")

AND:

                     BRAINTECH, INC. ("BNTI")
               and TECHWEST MANGEMENT INC. ("Techwest")

WHEREAS:

A.  Kurschner and JMF have commenced British Columbia Supreme
Court Action C990550 against BNTI and Techwest. (the "Action")

B.  The parties wish to finally and completely resolve any and
all disputes among them.

NOW THEREFORE  in consideration of the premises and the mutual
promises and covenants contained herein the parties hereto agree
as follows.

Issue of Shares by BrainTech

1.  Forthwith following execution and delivery of this
Agreement, BNTI will issue 400,000 common shares (the "Shares")
to Kurschner or JMF (as Kurschner and JMF shall direct - the
recipient of the Shares being referred to thereafter as the
"Holder").  The Shares will be restricted shares under the
United States Securities Act of 1933, and will bear a legend to
that effect.

Registration by BrainTech

2.  As soon as practicable following the filing of its Annual
Report for the fiscal year ended December 31, 2000, BNTI shall
prepare and file with the SEC a registration statement to enable
the Holder to sell all of the Shares.  BNTI shall use its
reasonable best efforts to keep such registration statement
effective until the earlier of (i) the date which is one year
following issuance of the Shares; and (ii) the date on which all
of the Shares have been sold.  Notwithstanding the foregoing, if
BNTI shall furnish to Holders a certificate signed by the
Chairman, Chief Executive Officer or President of BNTI stating
that in the good faith judgment of the Board of Directors of
BNTI, it would be seriously detrimental to BNTI and its
stockholders for such registration statement to be filed and/or
kept current by post-effective amendment and it is therefore
essential to defer the filing of such registration statement or
post-effective amendment, BNTI shall have the right to defer such
filing for a period of not more than 60 days; provided, however,
that BNTI may not utilize this right more than once.

3.  In addition, BNTI shall:

(a)  Prepare and file with the SEC such amendments and
supplements to such registration statement as may be
necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities
covered by such registration statement;
(b)  Furnish to the Holder such numbers of copies of a
prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of
the Shares.
(c)  Notify the Holder at any time when a prospectus relating
thereto is required to be delivered under the Securities Act
of 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.

4.  In the event of a consolidation of BNTI's issued share
capital into a lesser number subsequent to the date of issuance
of the Shares, BNTI will issue to the Holder additional shares in
the capital of BNTI that will maintain the same number of the
Shares still held by the Holder immediately prior the effective
date of the share consolidation.  For greater certainty, the
number of shares held by the Holder immediately prior the
effective date of a share consolidation shall be calculated by
subtracting any and all BNTI shares disposed of by the Holder on
or after the date that the Shares become free-trading from the
number of Shares issued pursuant to this agreement.  Any shares
issued under this section will be subject to Rule 144 of the
Securities Act of 1933 and will also be subject the limitation on
the sale of Shares specified in section 6 of the Agreement.  BNTI
agrees that any shares issued under this section prior to the
effective date of the registration statement to be filed by BNTI
pursuant to Section 2 or while such registration statement is
still effective, will be qualified for resale under such
registration statement.  The obligation to issue additional
shares pursuant to this Section shall cease two years from the
effective date of the registration statement to be filed pursuant
to Section 2.

Reporting Obligations of the Holder

5.  It shall be a condition precedent to the obligations of BNTI
to take any action pursuant to sections 2 , 3 and 4 that the
Holder shall furnish to BNTI such information regarding the
Holder, the Shares, and the intended method of disposition of the
Shares as shall be required.
Limitation on Sale of Shares

6.  Neither Kurscher nor JMF shall sell, in any one day, a number
of shares greater than ten percent (10%) of the average daily
trading volume for the five preceding trading days.

Non-disclosure by Kurschner and JMF

7.  For a period of two (2) years following the date of this
Agreement, neither Kurschner nor JMF shall:

(a)  make any public statements concerning BNTI or any of its
directors, officers, employees, or shareholders;
(b)  publish any statements over the Internet concerning BNTI or
any of its directors, officers, employees, or shareholders;
(c)  make any statement to any:

(i)  shareholder of BNTI;

(ii)  stockbroker or other participant in the securities
industry; or

(iii)  director, officer or employee of any company with
whom BNTI has any form of business relationship;

which is derogatory of BNTI or any of its directors,
officers, employees, or shareholders, or which reasonably be
expected to lower the esteem in which BNTI or any of its
directors, officers, employees, or shareholders are held; or

(d)  incite or encourage any other person to do any of the
foregoing;

unless either Kurschner or JMF, as the case may be, has a
reasonably held belief, after taking legal advice, that it is
under a legal obligation to do so, or could incur liability to
any third person by failing to do so.

Liquidated Damages

8.  If either Kurschner or JMF shall commit a material breach of
section 7 of this Agreement, then Kurschner and JMF shall be
jointly and severally liable to pay to BNTI liquidated damages in
the amount of US$25,000.

Release of BNTI and Directors and Officers

9.  Except for the obligations of BNTI under this Agreement,
Kurschner and JMF, for and on behalf of themselves and their
servants, officers, directors, agents, and employees and all of
their respective heirs, successors, and assigns (all of whom are
hereinafter referred to collectively as the "Kurschner
Releasors") do hereby REMISE, RELEASE, AND FOREVER DISCHARGE
BNTI and Techwest, their past and present servants, officers,
directors, agents, employees, consultants, legal advisors,
accountants, auditors, and subsidiaries, and all of their
respective heirs, successors, and assigns (all of whom are
hereinafter referred to collectively as the "BNTI Releasees") of
and from any actions, causes of action, debts, claims, demands,
damages or costs, whether at law or in equity and whether known
or unknown or suspected or unsuspected, arising out of or in any
way connected to any fact or matter to the date of this
Agreement, including without limiting the generality of the
foregoing any actions, causes of action, debts, claims, demands,
damages or costs arising out of or in any way relating to:

(a)   any of the facts or matters in issue in the Action; and

(b)  any and all communications between any of the BNTI Releasees
and any other person.

Release of Kurschner and JMF

10.  Except for the obligations of Kurschner and JMF under this
Agreement, BNTI and Techwest, for and on behalf of itself and all
of its present directors and officers and all of their respective
heirs, successors, and assigns (all of whom are hereinafter
referred to collectively as the "BNTI Releasors") do hereby
REMISE, RELEASE, AND FOREVER DISCHARGE Kurschner and JMF, their
past and present servants, officers, directors, agents,
employees, consultants, legal advisors, accountants, auditors,
and subsidiaries, and all of their respective heirs, successors,
and assigns (all of whom are hereinafter referred to collectively
as the "Kurschner Releasees") of and from any actions, causes of
action, debts, claims, demands, damages or costs, whether at law
or in equity and whether known or unknown or suspected or
unsuspected, arising out of or in any way connected to any fact
or matter to the date of this Agreement, including without
limiting the generality of the foregoing any actions, causes of
action, debts, claims, demands, damages or costs arising out of
or in any way relating to:

(c)   any of the facts or matters in issue in the Action; and

(d)  any and all communications between any of the Kurschner
Releasees and any other person.

Dismissal of Action

11.  Forthwith following execution of this Agreement, the parties
shall take such actions as may be require to cause the Action to
be dismissed by consent without costs to any party.

Executed with effect as of the day and date first written above.

TECHWEST MANAGEMENT INC.
  Per:

"signed"
Owen Jones, President

BRAINTECH, INC.
  Per:

"signed"
Owen Jones, President


JMF Management Inc.
  Per:

"signed"
Manfred Kurschner, Director



"signed"
Manfred Kurschner