**EXHIBIT      10.2**

**GENERAL      RELEASE**

**THIS      IS A CONTRACT. BANZHAF SHOULD READ IT CAREFULLY BEFORE HE SIGNS IT. THE COMPANY      ENCOURAGES BANZHAF TO CONSULT WITH AN ATTORNEY BEFORE HE SIGNS THIS AGREEMENT.      BANZHAF’S SIGNATURE ON THE BOTTOM OF THIS AGREEMENT CONSTITUTES AN ENFORCEABLE      AGREEMENT BETWEEN HIM AND THE COMPANY.**

**Recitals**

| A. | Banzhaf                has been employed by the Company as its Executive Vice President                of                Strategic Planning pursuant to an Employment Agreement, dated as                of July                7, 2003, as amended from time to time (the “Employment                Agreement”). |
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| B. | Banzhaf                has resigned his employment with the Company, effective June 13,                2006 (the                “Termination Date”), at which time his performance of duties for the                Company as an EVP have ceased in their                entirety. |
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| C. | Banzhaf                has accrued fifteen (15) days of vacation time that he has yet to                use as                of the Termination Date. |
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| D. | Banzhaf                and the Company wish to resolve forever any potential dispute or                disagreement that may exist between them arising out of, or related                in any                way to, his employment with the Company, or its                termination. |
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**Agreements**

| 1. | General                Release. |
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**“A      general release does not extend to claims which the creditor does not know      or      suspect to exist in his or her favor at the time of executing the release,      which      if known by him or her must have materially affected his or her settlement      with      the debtor.”**

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| 2. | Termination                of Employment Duties/Return of Property.                Your duties with the Company will have terminated as of the close                of                business on June __, 2006. Banzhaf                represents and warrants that he has returned, and not retained, any                and                all Company property, including all documents, files, records, keys,                access cards, disks, software, cellular telephones, automobiles,                equipment                or other property of the Company provided to Banzhaf or others by                the                Company during Banzhaf’s employment with the Company. Banzhaf agrees that,                to the extent that he ever later learns that he has not returned                all such                property, he will immediately return all such property, including                any and                all confidential and proprietary property of the Company’s clients,                customers, employees, vendors, suppliers, lenders or other entities                with                which Banzhaf had dealings during Banzhaf’s employment with the                Company. |
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| 3. | Compensation.                In consideration for Banzhaf entering into this General Release,                the                Company shall continue to pay Banzhaf’s current salary through September                9, 2006 (based upon annual salary of $360,000), and Banzhaf will                cease to                receive any further compensation from and after that date (except                for                vacation pay accrued through that date) and/or any and all other                benefits                heretofore granted or made available to you by the                Company. |
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|   | Furthermore,                Banzhaf currently holds 265,000 options to purchase the Company’s common                shares that are currently vested and exercisable at exercise prices                of                $5.00 with respect to 175,000 options and $12.50 with respect to                the                remaining 90,000 options (collectively, the “Vested Options”) as of this                date. Banzhaf may exercise only those Vested Options by no later                than                September 9, 2006, at which time any such Vested Options that Banzhaf                has                not exercised shall be canceled and terminated in their entirety                and be of                no further force or effect and Banzhaf shall have no further rights                thereto or thereunder or under his Time Accelerated Restricted Stock                Award                Plan (“TARSAP”) made as of July 7, 2003, as amended. Furthermore,                effective as of this date, any and all outstanding options to purchase                the                Company’s common shares that Banzhaf holds, which are not vested and                exercisable by Banzhaf as of this date, are hereby canceled and terminated                in their entirety and be of no further force or effect and Banzhaf                shall                have no further rights thereto or thereunder or under his TARSAP                and such                TARSAP is hereby terminated. |
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| 4. | Non-Disparagement.                Banzhaf agrees that he will not directly or indirectly, publish or                disseminate to the media or any individual (other than members of                Banzhaf’s immediate family and professional representatives, who shall be                informed of and bound by Banzhaf’s obligations of confidentiality in                contained in Section 7 below) or entity information that is critical,                derogatory or otherwise intended to disparage Company or Company’s                business, management, or physicians, whether such information is                acquired                during or after Banzhaf’s employment with the                Company. |
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| 5. | Confidentiality/Restrictive                Covenant Obligations Do Not Terminate.                Banzhaf understands that after the Termination Date, Banzhaf remains                bound                to comply with Sections 8, 9 and 10 of the Employment Agreement executed                by Banzhaf during his employment, a copy of which attached to this                Agreement as Exhibit 1 and the terms of which are incorporated by                this                reference. |
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| 6. | Non-Admissions.                It is understood that by offering or entering into this Agreement,                neither                Banzhaf nor the Company has admitted any liability or wrongdoing                whatsoever. |
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| 7. | Confidentiality                of Severance Offer and Payment.                Except to the extent required by law (e.g., to submit a tax return                or                compliance with a lawful subpoena),Banzhaf warrants that he has not                disclosed, and promises that he will not disclose, the offer or payment                of                the severance payment for any reason to any person other than members                of                Banzhaf’s immediate family and professional representatives, who shall be                informed of and bound by the same promise of                confidentiality. |
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| 8. | Modification.                This General Release may only be rescinded, modified or amended by                a                written instrument executed by Banzhaf and by the                Company. |
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| 9. | Governing                Law.                This General Release has been executed and delivered in, shall be                construed and interpreted in accordance with the laws of the State                of                California applicable to agreements to be performed entirely within                the                State of California. |
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| 10. | Binding                Agreement.                This General Release shall be binding upon Banzhaf and his heirs,                executors, administrators, personal representatives, successors and                assigns. |
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| 11. | Advice                to Consult With an Attorney.                Banzhaf hereby acknowledges that the Company has advised him to consult                with an attorney regarding the matters addressed and contained in                this                Agreement prior to signing this                Agreement. |
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| 12. | Consideration                Period.                In compliance with the Older Workers’ Benefit Protection Act (P.L.                101-433), Banzhaf is entitled to take up to twenty-one (21) calendar                days                from the date he receives this Agreement in which to consider whether                or                not to accept this Agreement and the waiver and release of claims                contained in this Agreement. There is, of course, no requirement                that                Banzhaf utilizes all twenty-one (21) days if he chooses to accept                or                reject this Agreement sooner. |
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| 13. | Revocation                Rights.                Under the law, once Banzhaf accepts this Agreement and the waiver                and                release of claims contained in this Agreement by signing this Agreement                in                the space provided below, Banzhaf is entitled to up to seven (7)                days in                which to cancel or revoke this Agreement by notifying Sandi Harrison                (Assistant Corporate Secretary, SpatiaLight, Inc., Five Hamilton                Landing,                Novato, CA 94949, Fax: (415) 883-3363) of his desire to revoke the                Agreement. For the revocation to be effective, written notice must                be                received by Ms. Harrison no later than the close of business (5:30                p.m.)                on the seventh (7th) calendar day after Banzhaf signs this Agreement.                If                Banzhaf revokes this Agreement, it will not be effective. After the                expiration of the seven (7) day revocation period, this Agreement                and                release of claims will become final if Banzhaf has not exercised                his right                to revoke the Agreement as noted                above. |
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| 14. | Counterparts.                This General Release may be executed in one or more counterparts,                all of                which taken together shall constitute one and the same General                Release. |
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