Document:

Exhibit
      10.2

     

    WARRANT
      TO PURCHASE STOCK

    

    Company:
       NORTH
      AMERICAN SCIENTIFIC, INC.,
      a
      Delaware corporation.

    Number
      of
      Shares: 99,337 [an
      amount equal to $150,000/Warrant Price]

    Class
      of
      Stock:  Common
      Stock

     

    Warrant
      Price:  The
      lower
      of: (i) the closing price of the Company’s common stock on the date the
      Company’s Board of Directors approves the issuance of this Warrant or (ii) the
      closing price of the Company’s common stock on the Issue Date.

     

    
      	
              Issue
                Date: 

            	
              May
                28, 2008

            	 
	
              Expiration
                Date: 

            	
              May
                28, 2013

            	 

    

    

    THIS
      WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other good
      and valuable consideration, SILICON VALLEY BANK ("Holder") is entitled to
      purchase the number of fully paid and nonassessable shares of the common stock,
      $0.01 par value per share (the "Shares") of the company (the "Company") at
      the
      Warrant Price, all as set forth above and as adjusted pursuant to Article 2
      of
      this Warrant, subject to the provisions and upon the terms and conditions set
      forth in this Warrant. 

     

    ARTICLE
      1. EXERCISE.

    

    1.1 Method
      of Exercise.
      Holder
      may exercise this Warrant by delivering a duly executed Notice of Exercise
      in
      substantially the form attached as Appendix 1 to the principal office of the
      Company. Unless Holder is exercising the conversion right set forth in Article
      1.2, Holder shall also deliver to the Company a check, wire transfer (to an
      account designated by the Company), or other form of payment acceptable to
      the
      Company for the aggregate Warrant Price for the Shares being
      purchased.

    

    1.2 Conversion
      Right.
      In lieu
      of exercising this Warrant as specified in Article 1.1, Holder may from time
      to
      time convert this Warrant, in whole or in part, into a number of Shares
      determined by dividing (a) the aggregate fair market value of the Shares or
      other securities otherwise issuable upon exercise of this Warrant minus the
      aggregate Warrant Price of such Shares by (b) the fair market value of one
      Share. The fair market value of the Shares shall be determined pursuant to
      Article 1.3.

    

    1.3 Fair
      Market Value.
      If the
      Company’s common stock is traded in a public market and the Shares are common
      stock, the fair market value of each Share shall be the closing price of a
      Share
      reported for the business day immediately before Holder delivers its Notice
      of
      Exercise to the Company. . If the Company’s common stock is not traded in a
      public market, the Board of Directors of the Company shall determine fair market
      value in its reasonable good faith judgment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    1.4 Delivery
      of Certificate and New Warrant.
      Promptly after Holder exercises or converts this Warrant and, if applicable,
      the
      Company receives payment of the aggregate Warrant Price, the Company shall
      deliver to Holder certificates for the Shares acquired and, if this Warrant
      has
      not been fully exercised or converted and has not expired, a new Warrant
      representing the Shares not so acquired.

    

    1.5 Replacement
      of Warrants.
      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 amount to the Company or, in the case of mutilation on surrender and
      cancellation of this Warrant, the Company shall execute and deliver, in lieu
      of
      this Warrant, a new warrant of like tenor.

    

    1.6 Treatment
      of Warrant Upon Acquisition of Company.

    

    1.6.1 "Acquisition".
      For
      the purpose of this Warrant, "Acquisition" means any sale, license, or other
      disposition of all or substantially all of the assets of the Company, or any
      reorganization, consolidation, or merger of the Company where the holders of
      the
      Company's securities before the transaction beneficially own less than 50%
      of
      the outstanding voting securities of the surviving entity after the
      transaction.

    

    1.6.2 Treatment
      of Warrant at Acquisition.
      

     

    A) Upon
      the
      written request of the Company, Holder agrees that, in the event of an
      Acquisition that is not an asset sale and in which the sole consideration is
      cash, either (a) Holder shall exercise its conversion or purchase right under
      this Warrant and such exercise will be deemed effective immediately prior to
      the
      consummation of such Acquisition or (b) if Holder elects not to exercise the
      Warrant, this Warrant will expire upon the consummation of such Acquisition.
      The
      Company shall provide the Holder with written notice of its request relating
      to
      the foregoing (together with such reasonable information as the Holder may
      request in connection with such contemplated Acquisition giving rise to such
      notice), which is to be delivered to Holder not less than ten (10) days prior
      to
      the closing of the proposed Acquisition.

     

    B) Upon
      the
      written request of the Company, Holder agrees that, in the event of an
      Acquisition that is an “arms length” sale of all or substantially all of the
      Company’s assets (and only its assets) to a third party that is not an Affiliate
      (as defined below) of the Company (a “True Asset Sale”), either (a) Holder shall
      exercise its conversion or purchase right under this Warrant and such exercise
      will be deemed effective immediately prior to the consummation of such
      Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant
      will continue until the Expiration Date if the Company continues as a going
      concern following the closing of any such True Asset Sale. The Company shall
      provide the Holder with written notice of its request relating to the foregoing
      (together with such reasonable information as the Holder may request in
      connection with such contemplated Acquisition giving rise to such notice),
      which
      is to be delivered to Holder not less than ten (10) days prior to the closing
      of
      the proposed Acquisition.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    C) Upon
      the
      closing of any Acquisition other than those particularly described in
      subsections (A) and (B) above, the successor entity shall assume the obligations
      of this Warrant, and this Warrant shall be exercisable for the same securities,
      cash, and property as would be payable for the Shares issuable upon exercise
      of
      the unexercised portion of this Warrant as if such Shares were outstanding
      on
      the record date for the Acquisition and subsequent closing. The Warrant Price
      and/or number of Shares shall be adjusted accordingly.

     

    As
      used
      herein “Affiliate”
shall
      mean any person or entity that owns or controls directly or indirectly ten
      (10)
      percent or more of the stock of Company, any person or entity that controls
      or
      is controlled by or is under common control with such persons or entities,
      and
      each of such person’s or entity’s officers, directors, joint venturers or
      partners, as applicable.

    

    ARTICLE
      2. ADJUSTMENTS
      TO THE SHARES.

    

    2.1 Stock
      Dividends, Splits, Etc.
      If the
      Company declares or pays a dividend on the Shares payable in common stock,
      or
      other securities, then upon exercise of this Warrant, for each Share acquired,
      Holder shall receive, without cost to Holder, the total number and kind of
      securities to which Holder would have been entitled had Holder owned the Shares
      of record as of the date the dividend occurred. If the Company subdivides the
      Shares by reclassification or otherwise into a greater number of shares or
      takes
      any other action which increase the amount of stock into which the Shares are
      convertible, the number of shares purchasable hereunder shall be proportionately
      increased and the Warrant Price shall be proportionately decreased, but the
      aggregate purchase price payable for the total number of shares purchasable
      under this Warrant (as adjusted) shall remain the same. If the outstanding
      shares are combined or consolidated, by reclassification or otherwise, into
      a
      lesser number of shares, the Warrant Price shall be proportionately increased
      (but the aggregate purchase price payable for the total number of Shares
      purchasable under this Warrant, as adjusted, shall remain the same), and the
      number of Shares shall be proportionately decreased.

    

    2.2 Reclassification,
      Exchange, Combinations or Substitution.
      Upon
      any reclassification, exchange, substitution, or other event that results in
      a
      change of the number and/or class of the securities issuable upon exercise
      or
      conversion of this Warrant, Holder shall be entitled to receive, upon exercise
      or conversion of this Warrant, the number and kind of securities and property
      that Holder would have received for the Shares if this Warrant had been
      exercised immediately before such reclassification, exchange, substitution,
      or
      other event. The Company or its successor shall promptly issue to Holder an
      amendment to this Warrant setting forth the number and kind of such new
      securities or other property issuable upon exercise or conversion of this
      Warrant as a result of such reclassification, exchange, substitution or other
      event that results in a change of the number and/or class of securities issuable
      upon exercise or conversion of this Warrant. The amendment to this Warrant
      shall
      provide for adjustments which shall be as nearly equivalent as may be
      practicable to the adjustments provided for in this Article 2 including, without
      limitation, adjustments to the Warrant Price (but not to the aggregate purchase
      price payable for the total number of Shares purchasable under this Warrant
      (as
      adjusted), which shall remain the same) and to the number of securities or
      property issuable upon exercise of the new Warrant. The provisions of this
      Article 2.2 shall similarly apply to successive reclassifications, exchanges,
      substitutions, or other events. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.3 Adjustments
      for Diluting Issuances.
      In the
      event the Company, within one year of the date hereof should issue additional
      shares of Common Stock, or options, warrants or other securities (including
      units comprising shares of Common Stock and other securities or rights)
      convertible into Common Stock (collectively, “Convertible Securities”), at a per
      share Value attributable to Common Stock less than the Warrant Price in effect
      immediately prior to such issuance, the Warrant Price shall be reduced to such
      lower Value; provided however, that no adjustment shall be made with respect
      to
      issuances by the Company of shares of Common Stock at not less than the then
      fair market value per share of Common Stock to its officers, directors and
      employees pursuant to its 2006 Stock Plan, 2000 Employee Stock Purchase Plan,
      2003 Non-Employee Directors’ Equity Compensation Plan and 2008 Non-Employee
      Directors Compensation Plan and any other employee incentive plans approved
      by
      the Company’s stockholders. In addition to a reduction in the Warrant Price as
      aforesaid, the number of shares issuable upon exercise of this Warrant shall
      be
      proportionately increased (such that the percentage of the total equity
      obtainable upon exchange remains the same). For purposes hereof, the term
“Value” shall take into account the effective price of any security which is
      comprised of Common Stock (or Convertible Securities) and other securities
      or
      rights, such as, for example, a unit which includes Common Stock and a warrant
      to purchase Common Stock, a Convertible Security or right (such as a stock
      appreciation right).  

    

    2.4 No
      Impairment.
      The
      Company shall not, by amendment of its Certificate of Incorporation or through
      a
      reorganization, transfer of assets, consolidation, merger, dissolution, issue,
      or sale of securities or any other voluntary action, avoid or seek to avoid
      the
      observance or performance of any of the terms to be observed or performed under
      this Warrant by the Company, but shall at all times in good faith assist in
      carrying out of all the provisions of this Article 2 and in taking all such
      action as may be necessary or appropriate to protect Holder's rights under
      this
      Article against impairment. 

    

    2.5 Fractional
      Shares.
      No
      fractional Shares shall be issuable upon exercise or conversion of this Warrant
      and the number of Shares to be issued shall be rounded down to the nearest
      whole
      Share. If a fractional share interest arises upon any exercise or conversion
      of
      the Warrant, the Company shall eliminate such fractional share interest by
      paying Holder the amount computed by multiplying the fractional interest by
      the
      fair market value of a full Share.

    

    2.6 Certificate
      as to Adjustments.
      Upon
      each adjustment of the Warrant Price, the Company shall promptly notify Holder
      in writing, and, at the Company’s expense, promptly compute such adjustment, and
      furnish Holder with a certificate of its Chief Financial Officer setting forth
      such adjustment and the facts upon which such adjustment is based. The Company
      shall, upon written request, furnish Holder a certificate setting forth the
      Warrant Price in effect upon the date thereof and the series of adjustments
      leading to such Warrant Price.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      3. REPRESENTATIONS
      AND COVENANTS OF THE COMPANY.

    

    3.1 Representations
      and Warranties.
      The
      Company represents and warrants to the Holder as follows: All Shares which
      may
      be issued upon the exercise of the purchase right represented by this Warrant,
      and all securities, if any, issuable upon conversion of the Shares, shall,
      upon
      issuance, be duly authorized, validly issued, fully paid and nonassessable,
      and
      free of any liens and encumbrances except for restrictions on transfer provided
      for herein or under applicable federal and state securities laws.

    

    3.2 Notice
      of Certain Events.
      If the
      Company proposes at any time (a) to declare any dividend or distribution upon
      any of its stock, whether in cash, property, stock, or other securities and
      whether or not a regular cash dividend; (b) to offer for sale any shares of
      the
      Company's capital stock (or other securities convertible into such capital
      stock), other than (i) pursuant to the Company's stock option or other
      compensatory plans, (ii) in connection with commercial credit arrangements
      or
      equipment financings, or (iii) in connection with strategic transactions for
      purposes other than capital raising; (c) to effect any reclassification or
      recapitalization of any of its stock; (d) to merge or consolidate with or into
      any other corporation, or sell, lease, license, or convey all or substantially
      all of its assets, or to liquidate, dissolve or wind up; or (e) to offer holders
      of registration rights the opportunity to participate in an underwritten public
      offering of the Company's securities for cash, then, in connection with each
      such event, the Company shall give Holder: (1) at least 10 days prior written
      notice of the date on which a record will be taken for such dividend,
      distribution, or subscription rights (and specifying the date on which the
      holders of common stock will be entitled thereto) or for determining rights
      to
      vote, if any, in respect of the matters referred to in (a) and (b) above; (2)
      in
      the case of the matters referred to in (c) and (d) above at least 10 days prior
      written notice of the date when the same will take place (and specifying the
      date on which the holders of common stock will be entitled to exchange their
      common stock for securities or other property deliverable upon the occurrence
      of
      such event); and (3) in the case of the matter referred to in (e) above, notice
      of such offer at the same time or promptly after it is given to the holders
      of
      such registration rights.

    

    3.3 Registration
      Under Securities Act of 1933, as amended.
      The
      Company agrees that the Shares or, if the Shares are convertible into common
      stock of the Company, such common stock, shall have certain “piggyback” and
“S-3” registration rights pursuant to and as set forth in Section 6.1 of the
      Company’s Securities Purchase Agreement dated as of December 12, 2007. The
      provisions set forth in such Securities Purchase Agreement identified above
      in
      effect as of the Issue Date may not be amended, modified or waived without
      the
      prior written consent of Holder unless such amendment, modification or waiver
      affects the rights associated with the Shares in the same manner as such
      amendment, modification, or waiver affects the rights associated with all other
      shares of the same series and class as the Shares granted to
      Holder.

    

    3.4 No
      Shareholder Rights.
      Except
      as provided in this Warrant, the Holder will not have any rights as a
      shareholder of the Company until the exercise of this Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      4. REPRESENTATIONS,
      WARRANTIES OF THE HOLDER.
      The
      Holder represents and warrants to the Company as follows:

    

    4.1 Purchase
      for Own Account.
      This
      Warrant and the securities to be acquired upon exercise of this Warrant by
      the
      Holder will be acquired for investment for the Holder’s account, not as a
      nominee or agent, and not with a view to the public resale or distribution
      within the meaning of the Act. Holder also represents that the Holder has not
      been formed for the specific purpose of acquiring this Warrant or the
      Shares.

    

    4.2 Disclosure
      of Information.
      The
      Holder has received or has had full access to all the information it considers
      necessary or appropriate to make an informed investment decision with respect
      to
      the acquisition of this Warrant and its underlying securities. The Holder
      further has had an opportunity to ask questions and receive answers from the
      Company regarding the terms and conditions of the offering of this Warrant
      and
      its underlying securities and to obtain additional information (to the extent
      the Company possessed such information or could acquire it without unreasonable
      effort or expense) necessary to verify any information furnished to the Holder
      or to which the Holder has access.

    

    4.3 Investment
      Experience.
      The
      Holder understands that the purchase of this Warrant and its underlying
      securities involves substantial risk. The Holder has experience as an investor
      in securities of companies in the development stage and acknowledges that the
      Holder can bear the economic risk of such Holder’s investment in this Warrant
      and its underlying securities and has such knowledge and experience in financial
      or business matters that the Holder is capable of evaluating the merits and
      risks of its investment in this Warrant and its underlying securities and/or
      has
      a preexisting personal or business relationship with the Company and certain
      of
      its officers, directors or controlling persons of a nature and duration that
      enables the Holder to be aware of the character, business acumen and financial
      circumstances of such persons.

    

    4.4  Accredited
      Investor Status.
      The
      Holder is an “accredited investor” within the meaning of Regulation D
      promulgated under the Act.

    

    4.5 The
      Act.
      The
      Holder understands that this Warrant and the Shares issuable upon exercise
      or
      conversion hereof have not been registered under the Act in reliance upon a
      specific exemption therefrom, which exemption depends upon, among other things,
      the bona fide nature of the Holder’s investment intent as expressed herein. The
      Holder understands that this Warrant and the Shares issued upon any exercise
      or
      conversion hereof must be held indefinitely unless subsequently registered
      under
      the Act and qualified under applicable state securities laws, or unless
      exemption from such registration and qualification are otherwise available.
      

    

    ARTICLE
      5. MISCELLANEOUS.

    

    5.1 Term.
      This
      Warrant is exercisable in whole or in part at any time and from time to time
      on
      or before the Expiration Date. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.2 Legends. This
      Warrant and the Shares (and the securities issuable, directly or indirectly,
      upon conversion of the Shares, if any) shall be imprinted with a legend in
      substantially the following form:

    

    THIS
      WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
      STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT
      BE
      OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
      UNTIL
      REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION
      OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
      SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT
      FROM
      REGISTRATION.

    

    5.3 Compliance
      with Securities Laws on Transfer.
      This
      Warrant and the Shares issuable upon exercise of this Warrant (and the
      securities issuable, directly or indirectly, upon conversion of the Shares,
      if
      any) may not be transferred or assigned in whole or in part without compliance
      with applicable federal and state securities laws by the transferor and the
      transferee (including, without limitation, the delivery of investment
      representation letters and legal opinions reasonably satisfactory to the
      Company, as reasonably requested by the Company). The Company shall not require
      Silicon Valley Bank (“Bank”) to provide an opinion of counsel if the transfer is
      to Bank’s parent company, SVB Financial Group (formerly Silicon Valley
      Bancshares), or any other affiliate of Bank. Additionally, the Company shall
      also not require an opinion of counsel, so long as Rule 144 remains in effect
      in
      relevant part in substantially its current form, if (a) in the reasonable
      judgment of the Company, based in part upon reasonably detailed representations
      by the Holder or the selling broker, as appropriate, there is no material
      question as to the availability of current information as referenced in Rule
      144(c), Holder has complied with Rule 144(d) and the selling broker has complied
      with Rule 144(f), and (b) the Company is provided with a copy of Holder's notice
      of proposed sale.

    

    5.4 Transfer
      Procedure.
      After
      receipt by Bank of the executed Warrant, Bank will transfer all of this Warrant
      to SVB Financial Group, by execution of an Assignment substantially in the
      form
      of Appendix 2. Subject to the provisions of Article 5.3 and upon providing
      Company with written notice, SVB Financial Group and any subsequent Holder
      may
      transfer all or part of this Warrant or the Shares issuable upon exercise of
      this Warrant (or the Shares issuable directly or indirectly, upon conversion
      of
      the Shares, if any) to any transferee, provided, however, in connection with
      any
      such transfer, SVB Financial Group or any subsequent Holder will give the
      Company notice of the portion of the Warrant being transferred with the name,
      address and taxpayer identification number of the transferee and Holder will
      surrender this Warrant to the Company for reissuance to the transferee(s) (and
      Holder if applicable). The Company may refuse to transfer this Warrant or the
      Shares to any person who directly competes with the Company, unless, in either
      case, the stock of the Company is publicly traded.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.5 Notices.
      All
      notices and other communications from the Company to the Holder, or vice versa,
      shall be deemed delivered and effective when given personally or mailed by
      first-class registered or certified mail, postage prepaid, at such address
      as
      may have been furnished to the Company or the Holder, as the case may (or on
      the
      first business day after transmission by facsimile) be, in writing by the
      Company or such Holder from time to time. Effective upon receipt of the fully
      executed Warrant and the initial transfer described in Article 5.4 above, all
      notices to the Holder shall be addressed as follows until the Company receives
      notice of a change of address in connection with a transfer or
      otherwise:

    

    SVB
      Financial Group

    Attn:
      Treasury Department

    3003
      Tasman Drive, HA 200

    Santa
      Clara, CA 95054

    Telephone:
      408-654-7400

    Facsimile:
      408-496-2405

    

    Notice
      to
      the Company shall be addressed as follows until the Holder receives notice
      of a
      change in address:

     

    NORTH
      AMERICAN SCIENTIFIC, INC.

    20200
      Sunburst Street

    Chatsworth,
      California 91311   

    Telephone:
      (818) 734-8600

    Facsimile:
      (818) 734-5223

    

    5.6 Waiver.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought.

    

    5.7 Attorneys’
      Fees.
      In the
      event of any dispute between the parties concerning the terms and provisions
      of
      this Warrant, the party prevailing in such dispute shall be entitled to collect
      from the other party all costs incurred in such dispute, including reasonable
      attorneys’ fees.

    

    5.8 Automatic
      Conversion upon Expiration.
      In the
      event that, upon the Expiration Date, the fair market value of one Share (or
      other security issuable upon the exercise hereof) as determined in accordance
      with Section 1.3 above is greater than the Warrant Price in effect on such
      date,
      then this Warrant shall automatically be deemed on and as of such date to be
      converted pursuant to Section 1.2 above as to all Shares (or such other
      securities) for which it shall not previously have been exercised or converted,
      and the Company shall promptly deliver a certificate representing the Shares
      (or
      such other securities) issued upon such conversion to the Holder. 

    

    5.9 Counterparts.
      This
      Warrant may be executed in counterparts, all of which together shall constitute
      one and the same agreement.

     

    5.10 Governing
      Law.
      This
      Warrant shall be governed by and construed in accordance with the laws of the
      State of Delaware, without giving effect to its principles regarding conflicts
      of law.SEPARATION
      AGREEMENT

     

    Without
      Prejudice

     

    THIS
      AGREEMENT
      is dated
      10 June 2008 

     

    PARTIES:

     

    
      	(1)	
              China
                Architectural Engineering Inc.
                (“the Company”) at 63/F, Bank of China Tower, 1 Garden Road, Hong
                Kong (for
                itself and on behalf of each other Group Company and each of the
                other
                Releasees); and

            

    

     

    
      	(2)	
              Xin
                Yue Jasmine Geffner
                (the “Employee”) of Flat B 14/F, Ming Kung Mansion, Tai Koo Shing, Hong
                Kong.

            

    

     

    
      	
              1.

            	
              The
                parties have agreed that the Employee’s employment with the Company will
                cease by mutual agreement with effect from close of business on
                30 June 2008 (the
                “Termination Date”).

            

    

     

    
      	
              2.

            	
              The
                Company confirms that the Employee shall receive the following:
                

            

    

     

    
      	
            	(A)	
              Salary
                

            

    

     

    Salary
      (of HK$70,000 per month) and housing allowance (of HK$60,000 per month) will
      continue to be payable in accordance with Clause 4.1 of the service agreement
      dated 12 March 2008 filed with the SEC of the United States (“the Employment
      Agreement”). The said salary and housing allowance for the month of May and June
      2008, which are unpaid and accrued, will be paid and given to the Employee
      in
      the form of a company check signed by authorized signer or signers, no later
      than 5 p.m. (Hong Kong time) on 10 June 2008. 

     

    
      	
            	(B)	
              Paid
                leave

            

    

     

    The
      Employee will take paid leave (inclusive of any untaken annual leave) from
      the
      date of signing of this Agreement up to the Termination Date. The Employee
      will
      fully comply with all provisions of the Employment Agreement during the period
      of her leave up to the Termination Date and will remain contactable during
      office hours to assist the Company where necessary.

     

    
      	
            	(C)	
              Shares

            

    

     

    On
      or
      before June 20, 2008, the Company will issue the Employee 70,000 restricted,
      unregistered shares of the common stock of the Company (“the
      Shares”) (said number of shares referenced in clause 4.2(a) of the Employment
      Agreement). However, it is understood and agreed that said shares shall and
      are
      not deemed issued and outstanding until actually issued by the Company further
      to this section 2(C).
      [The
      Company shall give all necessary approvals to enable the Shares to be publicly
      tradable pursuant to SEC Securities Act Rule 144.

     

    
      	
            	(D)	
              Separation
                payment

            

    

     

    Conditional
      on the Employee signing and returning this Agreement to the Company no later
      than 5 p.m. (Hong Kong time) on 10 June 2008, and also to her continued
      compliance with all the terms of this Agreement, a separation payment (which
      is
      inclusive of all of the entitlements of the Employee, if any, and the balance
      of
      which is made in return for the release and the post-termination restrictions
      set out in this Agreement) shall be paid in two instalments as set out in the
      attached Schedule One. These two instalments will be evidenced by a company
      check dated 30 June 2008 and a company check dated 30 September 2008. These
      two
      checks will be in the form of company checks signed by authorized signer or
      signers and will be given to the Employee no later than 5 p.m. (Hong Kong time)
      on 10 June 2008.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    This
      amount of HK$1,440,000 is calculated on the basis that the Employee will be
      paid
      an amount equivalent to the amount of salary (equivalent to HK$560,000) and
      housing allowance (equivalent to HK$480,000) that she would have earned had
      she
      remained in the Company’s employment between the Termination Date and the first
      anniversary of her commencement date with the Company. In addition, an amount
      of
      HK$400,000 which is equivalent to her cash bonus had she remained in employment
      has been included. 

     

    
      	
            	(E)	
              Business
                expenses

            

     

    Subject
      to the production of receipts and the Employee providing a reason for incurring
      the expense satisfactory to the Company, the Company will reimburse the Employee
      for necessary business expenses incurred in connection with the performance
      of
      the Employee’s duties up to the Termination Date. These expenses will be
      reimbursed by the Company in the form of a company check signed by authorized
      signer or signers, which will be given to the Employee no later than 5 p.m.
      (Hong Kong time) on 30 June 2008. 

     

    
      	
            	(F)	
              Directors
                & Officers Insurance

            

     

    The
      Company agrees to insure directors’ and officers’ liability on such terms as it
      deems appropriate.

     

    
      	
              3.

            	
              The
                Employee agrees that should she breach any provision of this Agreement,
                she shall forthwith on request from the Company repay amounts already
                paid
                which are not due under relevant statutory and contractual requirements,
                and the Company will be released from any obligation to pay her any
                further amounts. 

            

    

     

    
      	
              4.

            	
              Other
                benefits will be dealt with as
                follows:

            

    

     

    
      	 	
              (A)

            	
              Any
                mandatory provident fund scheme entitlements will be dealt with and
                satisfied by the scheme’s service
                provider.

            

    

     

    
      	 	
              (B)

            	
              All
                other benefits will cease after the Termination Date except that
                medical
                insurance and life insurance as currently provided to the Employee
                will
                continue until 2 March 2009 subject to the terms and conditions and
                any
                requirements imposed by the relevant insurer. For the avoidance of
                doubt,
                any out of pocket medical, dental and vision expenses (not covered
                by the
                insurance) in respect of which the Employee has already submitted
                claims
                for reimbursement will be reimbursed by the Company on 30 June 2008
                in the
                form of a company check signed by authorized signer or signers.
                

            

    

     

    
      	 	
              (C)

            	
              For
                the avoidance of doubt, save as set out in this Agreement, the Employee
                will cease to be entitled to any benefits under any equity, stock
                or share
                option scheme or any section, term, condition or provision of the
                Employment Agreement, with effect from the Termination
                Date.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	 	
              (D)

            	
              The
                Company will reimburse the Employee in respect of relocation expenses
                incurred by the Employee and her family in moving to Hong Kong from
                the
                U.S.A. in the agreed sum of US$15,000. This sum will be reimbursed
                by the
                Company in the form of a company check signed by authorized signer
                or
                signers, which will be given to the Employee no later than 5 p.m.
                (Hong
                Kong time) on 30 June 2008. 

            

    

     

    
      	 	
              (E)

            	
              The
                Company will pay the Employee on the Termination Date tax, accounting
                and
                legal expenses in the agreed sum of US$5,000. This sum will be reimbursed
                by the Company in the form of a company check signed by authorized
                signer
                or signers, which will be given to the Employee no later than 5 p.m.
                (Hong
                Kong time) on 30 June 2008. 

            

    

     

     

    
      	
              5.

            	
              By
                signing this Agreement the Employee agrees that the payments and
                benefits
                set out in clauses 2 and 4 above are inclusive of any and all entitlements
                arising under her terms of employment with the Company and any
                entitlements that she may have under any applicable law. The Employee
                further agrees that she shall not be entitled to receive any further
                sums,
                benefits or shares from the Company or any other Group Company following
                or in connection with the cessation of her employment or on any other
                ground, except as referred to in this
                Agreement.

            

    

     

    
      	
              6.

            	
              In
                consideration for the sums set out above the Employee covenants and
                agrees:

            

    

     

    
      	 	
              (A)

            	that the arrangements set out in this Agreement
              are in
              full and final settlement of all or any claims, costs, expenses, or
              rights
              of action of any kind whatsoever or howsoever arising (whether arising
              under common law, statute or otherwise and whether arising in Hong
              Kong or
              in any other country or jurisdiction in the world) which she has or
              may
              have, whether now or at any time in the future and whether or not in
              the
              contemplation of the parties at the date of this Agreement, against
              the
              Company or any other Group Company or any directors, officers, managers,
              representatives, agents or employees of the Company or any other Group
              Company (“Releasees”) and whether arising directly or indirectly out of or
              in connection with her contract of employment, its termination or
              otherwise on any other ground (“Claims”);

    

     

    
      	 	
              (B)

            	that she hereby releases each of the Releasees from
              any
              and all Claims (except claims arising from or in respect of this
              Agreement);

    

     

    
      	 	
              (C)

            	to keep the circumstances surrounding the discussions
              leading up to and the existence, terms and conditions of this Agreement
              confidential and not to disclose the same unless required by law, or
              in
              order to take professional advice, or as ordered by a court of competent
              jurisdiction or for enforcing any provisions of this Agreement or where
              the relevant circumstances have come into public domain (other than
              as a
              result of a breach of this Clause);

    

     

    
      	 	
              (D)

            	not to use, disclose or communicate to any person
              whatsoever (unless ordered by a court of competent jurisdiction) any
              trade
              secrets or confidential information (which may include commercially
              sensitive information) important to and relating to the business of
              the
              Company or any other Group Company of which the Employee may have become
              possessed during the course of her employment with the Company or any
              other Group Company, in particular confidential information in relation
              to
              the Company’s clients and its business dealings with such clients. This
              undertaking will apply until such information comes into the public
              domain, other than by reason of any breach of this
              undertaking;

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (E)

            	that she will not during the period of six months
              immediately following the Termination Date in competition with the
              Company
              directly or indirectly solicit or entice away or endeavour to solicit
              or
              entice away from the Company or any other Group Company any person,
              company or entity who was a client or customer of the Company or any
              other
              Group Company during the six months prior to the Termination Date and
              with
              whom she had had business dealings during her
              employment;

    

     

    
      	 	
              (F)

            	that she will not during the period of six months
              immediately following the Termination Date directly or indirectly solicit
              or entice away or endeavour to solicit or entice away from the Company
              or
              any other Group Company any person employed by the Company or any other
              Group Company in a managerial or executive capacity at the Termination
              Date and with whom she had had business dealings during the six months
              prior to the Termination Date with a view to inducing that person to
              leave
              such employment and to act for another employer in the same or a similar
              capacity in relation to the same field of
              work;

    

     

    
      	 	
              (G)

            	to return to the Company immediately upon commencing
              her
              leave as referred to in clause 2(B) above all property belonging to
              the
              Company or any other Group Company which is in her possession, custody
              or
              power including (without limitation) computer records, credit cards,
              electrical equipment, keys, passes, mobile phone model no. Nokia
              XpressMusic, documents, correspondence and other papers and other items
              in
              her possession, custody or power by reason of her employment with the
              Company;

    

     

    
      	 	
              (H)

            	not at any time to make, directly or indirectly,
              any
              derogatory or disparaging comment about any of the Releasees provided
              that
              disclosure of any information as required by any applicable laws or
              order
              of a court of competent jurisdiction will not constitute a breach of
              this
              Clause under any circumstances.

    

     

    
      	 	
              (I)

            	
              the
                Company and Mr Ken Y. Luo undertake not at any time to make, directly
                or
                indirectly, any public derogatory or disparaging comment about the
                Employee provided that disclosure of any information as required
                by any
                applicable laws or order of a court of competent jurisdiction will
                not
                constitute a breach of this Clause under any
                circumstances.

            

    

     

    
      	
              7.

            	
              The
                Employee hereby warrants and represents that she has not and will
                not
                commence any legal or arbitration proceedings of any nature against
                the
                Company or any other Group Company or Releasee in any jurisdiction
                arising
                out of or in connection with her employment with the Company or any
                Group
                Company, the cessation of any such employment or otherwise on any
                other
                ground save for proceedings to enforce the terms of this Agreement.
                She
                will also not submit any personal data access request to the Company
                in
                relation to data held in connection with her employment. The Company
                will
                destroy all personal data of the Employee as and when such data is
                no
                longer required by any applicable law to retain such
                data.

            

    

     

    
      	
              8.

            	
              The
                Employee confirms that she is not aware of any financial irregularities
                within the Company and will not make any statements whether to persons
                within the Company or externally which is inconsistent with this.
                

            

    

     

    
      	
              9.

            	
              The
                parties have agreed to communicate the Employee’s departure from the
                Company only using the form of announcement as set out in the attached
                Schedule Two. Notwithstanding the foregoing, the Company will make
                the
                necessary public disclosures that may be required by applicable laws
                regarding this Agreement and the termination of the Employee’s employment
                with the Company. 

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	
              10.

            	
              This
                Agreement is:

            

    

     

    
      	 	
              (A)

            	the entire agreement between the Employee, the Company
              and any other Group Company as to its subject matter and may not be
              modified or amended except by an instrument in writing signed by the
              Employee and the Company;

    

     

    
      	 	
              (B)

            	to be governed by and interpreted according to Hong
              Kong
              law and both parties submit to the non-exclusive jurisdiction of the
              Hong
              Kong courts and tribunals.

    

     

    
      	
              11.

            	
              For
                the purpose of this Agreement “Group” means the Company, any holding
                company of the Company and any subsidiary of the Company; and any
                company
                of which the Company, any such holding company or subsidiary of the
                Company, holds or controls more than 20% in nominal value of the
                equity
                share capital. The words “holding company” and “subsidiary” shall have the
                meanings given to them in section 2 of the Hong Kong Companies
                Ordinance.

            

    

     

    
      	
              12.

            	
              This
                Agreement, although marked “Without Prejudice”, will upon signature by
                both parties be treated as an open document evidencing an agreement
                binding on the parties.

            

    

     

    
       

       

      
        

      

    

    Ken
      Y. Luo       

    For
      and on behalf of the Company, 

    each
      other Group Company and each 

    of
      the other Releasees

    

    

     

     

    
      

    

    Xin
      Yue Jasmine Geffner

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Schedule
      One

    

    Payment
      of HK$1,440,000 which is inclusive of all of the entitlements of the Employee.
      The balance of this payment is made in return for the post-termination
      restrictions set out in this Agreement. This payment will be made according
      to
      the payment schedule below.

     

    These
      two
      instalments will be evidenced by a company check dated 30 June 2008 and a
      company check dated 30 September 2008. These two checks will be in the form
      of
      company checks signed by authorized signer or signers and will be given to
      the
      Employee no later than 5 p.m. (Hong Kong time) on 10 June 2008.

    

    Payment
      schedule:

    

    
      	
              30
                June 2008:

            	
              HK$720,000

            
	
              On
                or before 30 September 2008: 

            	
              HK$720,000

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Schedule
      Two

     

    Company
      Announcement

     

    30
      June
      2008

     

    It
      is
      with regret that we announce that Xin Yue Jasmine Geffner, Chief Financial
      Officer, has decided to leave CAE for personal reasons. 

    

    It
      has
      been agreed that Jasmine’s last day as Chief Financial Officer, and as an
      employee of CAE, will be today.

    

    We
      wish
      Jasmine success in her future endeavours.

     

     

    Ken
      Y
      Luo

     

    
      
        
        

      

      
        7

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