Document:

Exhibit
      10.2

    Executable
      Version

    

    EMPLOYMENT
      AGREEMENT

    

    This
      EMPLOYMENT AGREEMENT (this “Agreement”) is made as of August 1, 2008 by and
      between MILLER PETROLEUM, INC., a Tennessee corporation (the “Company”), and
      SCOTT M. BORUFF (“Executive”).

     

    WHEREAS,
      the parties hereto wish to enter into an employment agreement to employ
      Executive upon the terms and conditions herein.

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and representations
      contained herein, and for other good and valuable consideration, the receipt
      and
      sufficiency of which is hereby acknowledged, the parties hereto agree as
      follows:

     

    
      	 	
              1.

            	
              Employment
                Period.

            

    

     

    The
      Company hereby employs Executive, and Executive agrees to serve the Company
      under the terms of this Agreement, for a term of five (5) years (the “Initial
      Term”), subject to earlier termination as provided herein, commencing as of the
      date of this Agreement (the “Commencement Date”). On the five-year anniversary
      of the Commencement Date and each successive one-year anniversary thereafter,
      the term of this Agreement shall automatically be extended for an additional
      period of one (1) year; provided,
      however,
      that
      either party hereto may elect not to extend this Agreement by giving written
      notice to the other party at least sixty (60) days prior to any such anniversary
      date. The Initial Term and any renewal periods thereafter, until the termination
      of Executive’s employment hereunder, shall be referred to herein as the
“Employment Period.”

     

    
      	 	
              2.

            	
              Duties
                and Status.

            

    

     

    The
      Company hereby engages Executive as Chief Executive Officer of the Company
      on
      the terms and conditions set forth in this Agreement. During the Employment
      Period, Executive shall report directly to the Board of Directors of the Company
      (the “Board”), and exercise such authority, perform such executive duties and
      functions and discharge such executive responsibilities as are reasonably
      associated with Executive’s position, consistent with the responsibilities
      assigned to officers of companies comparable to the Company, commensurate with
      the authority vested in Executive pursuant to this Agreement and consistent
      with
      the Certificate of Incorporation and By-laws of the Company. Without limiting
      the generality of the foregoing, Executive shall undertake his duties in a
      manner consistent with the best interests of the Company and shall perform
      his
      duties to the best of his ability and in a diligent and proper manner. Executive
      shall perform all duties, services and responsibilities in accordance with
      the
      guidelines, policies and procedures established by the Board from time to time.
      Executive further agrees to devote his entire business time, attention, full
      skill and best efforts to the interests and business of the Company.
      Notwithstanding the foregoing or any other provision of this Agreement, it
      shall
      not be a breach or violation of this Agreement for the Executive to (i) serve
      on
      corporate (subject to approval of the Board), civic or charitable boards or
      committees, (ii) deliver lectures, fulfill speaking engagements or teach at
      educational institutions, or (iii) manage personal real estate investments,
      so
      long as such activities do not significantly interfere with or significantly
      detract from the performance of the Executive’s responsibilities to the Company
      in accordance with this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              3.

            	
              Compensation;
                Benefits and Expenses.

            

    

     

    (a) Salary.
      The
      Company shall pay to Executive, as compensation for the performance of his
      duties and obligations under this Agreement, a base salary at the rate of
      $250,000 per annum during the Employment Period, payable in arrears in
      accordance with the normal payroll practices of the Company for its executive
      officers. Executive’s base salary shall be subject to review each calendar year
      by the Board in its sole discretion.
      Further,
      Executive’s base salary shall be increased for each year of the Employment
      Period at the beginning of each such year by an amount not less than the COLA
      Adjustment. COLA Adjustment means the cost of living adjustment, which shall
      correspond to the percent rise in prices for the preceding year as measured
      by
      the Consumer Price Index for all Urban Consumers (CPI-UC), All City Average,
      all
      Items published by the United States Department of Labor, Bureau of Labor
      Statistics (the “Index”). The COLA Adjustment shall be determined by multiplying
      the amount or figure to be adjusted by a fraction, the numerator of which is
      the
      Index published for the month in which occurs the date of adjustment and the
      denominator of which is the Index published for the same month of the preceding
      year.

     

    (b) Bonus.
      In
      addition to the base salary payable to Executive hereunder, Executive also
      shall
      be entitled to receive a one-time sign-on bonus equal to $300,000, one-half
      of
      which shall be payable on or about the execution and delivery of this Agreement
      and the other half of which shall be payable on the one-year anniversary of
      the
      date hereof.

     

    (c) Equity.
      In
      addition to base salary and bonuses, Executive shall be entitled to the
      following equity in the Company:

     

    (i) Stock
      Options.
      Option
      to purchase 250,000 shares of the Company’s common stock at an exercise price
      equal to $0.33 per share, vesting in equal annual installments over a period
      of
      four (4) years from the grant date, or immediately with respect to all such
      options in the event of a Change in Control (as defined in Section 5(c) hereof)
      and exercisable for a period of ten (10) years from the date of grant, which
      option shall be granted on or about the execution and delivery of this
      Agreement;

     

    (ii) Restricted
      Stock Grant.
      250,000
      restricted shares of the Company’s common stock vesting in equal annual
      installments over a period of four (4) years from the issuance date, or
      immediately with respect to all such shares in the event of a Change in Control,
      which shares shall be issued on or about the execution and delivery of this
      Agreement; and

     

    (iii) Incentive
      Cash/Restricted Stock.
      Cash
      and restricted shares of the Company’s Common Stock on an incentive basis, as
      follows:

     

    (A) 100%
      of
      Executive’s then base salary plus 100,000 shares of Common Stock in the event
      that the Company achieves gross revenue for the fiscal year ending April 30,
      2009 (annualized commencing as of the date of this Agreement) of not less than
      $2,000,000, and EBITDA (as hereinafter defined) for such period of not less
      than
      $200,000; 50% of such cash and shares to be paid and issuable in the event
      that
      the gross revenue target is achieved, and the remaining 50% of such cash and
      shares to be paid and issuable in the event that the EBITDA target is achieved,
      such amounts to be pro
      rated
      for the
      annualized nine-month period;

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (B) 100%
      of
      Executive’s then base salary plus 100,000 shares of Common Stock in the event
      that the Company achieves gross revenue for the fiscal year ending April 30,
      2010 of not less than $4,000,000, and EBITDA for such period of not less than
      $400,000; 50% of such cash and shares to be paid and issuable in the event
      that
      the gross revenue target is achieved, and the remaining 50% of such cash and
      shares to be paid and issuable in the event that the EBITDA target is
      achieved;

     

    (C) 100%
      of
      Executive’s then base salary plus 100,000 shares of Common Stock in the event
      that the Company achieves gross revenue for the fiscal year ending April 30,
      2011 of not less than $8,000,000, and EBITDA for such period of not less than
      $800,000; 50% of such cash and shares to be paid and issuable in the event
      that
      the gross revenue target is achieved, and the remaining 50% of such cash and
      shares to be paid and issuable in the event that the EBITDA target is
      achieved;

     

    (D) 100%
      of
      Executive’s then base salary plus 100,000 shares of Common Stock in the event
      that the Company achieves gross revenue for the fiscal year ending April 30,
      2012 of not less than $16,000,000, and EBITDA for such period of not less than
      $1,600,000; 50% of such cash and shares to be paid and issuable in the event
      that the gross revenue target is achieved, and the remaining 50% of such cash
      and shares to be paid and issuable in the event that the EBITDA target is
      achieved; and

     

    (E) 100%
      of
      Executive’s then base salary plus 100,000 shares of Common Stock in the event
      that the Company achieves gross revenue for the fiscal year ending April 30,
      2013 of not less than $30,000,000, and EBITDA for such period of not less than
      $3,000,000; 50% of such cash and shares to be paid and issuable in the event
      that the gross revenue target is achieved, and the remaining 50% of such cash
      and shares to be paid and issuable in the event that the EBITDA target is
      achieved.

     

    EBITDA
      means, for any applicable period, earnings before provision for income taxes,
      depreciation and amortization as determined in accordance with generally
      accepted accounting principles consistently applied. All such cash and shares
      of
      incentive restrictive stock as set forth in (A), (B), (C), (D) and (E) above
      shall be paid and/or issued by the Company to Executive, as the case may be,
      as
      soon as practicable after the relevant determinations of gross revenue and
      EBITDA have been made, which such determinations shall be made by the
      regularly-engaged accountants of the Company and be final and binding for all
      purposes absent manifest error, gross negligence or willful misconduct. In
      the
      event of a Change in Control, any such incentive restrictive stock not yet
      issued, and for which the applicable benchmarks have not yet been determined,
      shall be immediately issued to Executive.

    
      
        
        

      

      
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    (d) Vacation
      and Sick Leave.
      Executive shall be entitled to vacation time for each calendar year and such
      paid sick leave as is in accordance with the normal Company policies and
      practices in effect from time to time for senior executives but in no event
      less
      than four (4) weeks vacation; provided,
      however,
      that
      unless otherwise approved in writing by the Board, no more than two weeks of
      such vacation time may be used consecutively, and provided,
      further,
      that
      any accrued but unused vacation time and paid sick leave remaining at the end
      of
      each calendar year shall be forfeited unless otherwise agreed to in writing
      by
      the Company and Executive.

     

    (e) Other
      Benefits.
      During
      the Employment Period, Executive shall be entitled to participate in the
      employee benefit plans, programs and arrangements of the Company in effect
      during the Employment Period which are generally available to senior executives
      of the Company (including, without limitation, 401(k) and group medical
      insurance plans), as well as an automobile allowance of $1,000 per month,
      subject to and on a basis consistent with the terms, conditions and overall
      administration of such plans, programs and arrangements.

     

    (f) Expenses.
      In
      addition to any amounts payable to Executive pursuant to this Section
3,
      the
      Company shall reimburse Executive, upon production of accounts and vouchers
      or
      other reasonable evidence of payment by Executive, all in accordance with the
      Company’s regular procedures in effect from time to time, all reasonable and
      ordinary expenses as shall have been incurred by him in the performance of
      his
      duties hereunder or other expenses agreed upon in writing by the Company and
      Executive.

     

    
      	 	
              4.

            	
              Termination
                of Employment.

            

    

     

    (a) Termination
      for Cause.
      The
      Company may terminate Executive’s employment hereunder at any time for Cause.
      For purposes of this Agreement, Cause shall mean:

     

    (i) Executive’s
      commission of (A) any violation of law, (B) any breach of fiduciary duty or
      act
      of negligence or malfeasance, or (C) any act of dishonesty, fraud or
      misrepresentation;

    

    (ii) Executive’s
      commission of any other act of moral turpitude injurious to the Company, which
      the Board in its sole discretion determines has or may be reasonably expected
      to
      have a detrimental impact on the Company’s business or operations or would
      prevent Executive from effectively performing his duties under this
      Agreement;

    

    (iii) a
      breach
      by Executive of any obligations or covenants contained in this Agreement as
      determined by the Board in its sole discretion; and

    

    (iv) a
      failure
      by Executive to discharge his duties, responsibilities and obligations under
      this Agreement, or a failure to follow the directives of the Board, as
      determined by the Board in its sole discretion.

    

    (b) Termination
      Upon Death or Disability.
      The
      Employment Period shall be terminated upon the death or Disability (as defined
      below) of Executive. "Disability"
      shall mean that as a result of physical or mental illness, injury, infirmity
      or
      other incapacity as determined by a physician selected by the Board, Executive
      is not able to substantially perform his duties and responsibilities to the
      Company for a period of one hundred twenty (120) consecutive days or an
      aggregate period of more than one hundred and eighty (180) days in any 12-month
      period.

     

    
      	 	
              5.

            	
              Consequences
                of Termination.

            

    

     

    (a) For
      Cause, Death, Disability or Non-Renewal; By Executive.
      In the
      event of termination of Executive’s employment at any time (i) by the Company
      for Cause, (ii) by Executive for any reason, (iii) by either party as a result
      of a non-renewal in accordance with Section 1 hereof, or (iv) as a result of
      death or Disability, Executive shall be entitled only to receive base salary
      accrued but not paid through the date of termination, and the Company shall
      have
      no further obligations to Executive.

     

    (b) Other
      Termination.
      In the
      event of a termination of Executive’s employment for any reason other than as
      set forth in Sections 5(a) or 5(c) hereof, 

     

    (i) the
      Company shall provide to Executive base salary accrued but not paid through
      the
      date of termination plus, as severance, base salary for one year, payable over
      time in accordance with the Company’s normal payroll practices, provided that,
      in the
      event such termination occurs after the end of the Initial Term, Executive
      shall
      be entitled only to receive base salary accrued but not paid through the date
      of
      termination; and

     

    
      
        
        

      

      
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    (ii) Executive
      shall provide to the Company an executed and non-revocable release agreement
      in
      favor of the Company and its shareholders and their respective directors,
      officers and employees, in form and substance acceptable to the
      Company.

     

    (c) Change
      in Control.
      If at
      any time during the Employment Period, Executive’s employment with the Company
      is terminated by the Company as a result of a Change in Control (as hereinafter
      defined), the Company shall pay to Executive an amount equal to 2.99
multiplied
      by
      Executive’s annualized salary that Executive is then earning, payable in a
      lump-sum payment upon the closing of the Change in Control. For purposes hereof,
      a Change in Control means the acquisition by any Person (as defined below)
      of
      beneficial ownership of securities of the Company representing greater than
      50%
      of the combined voting power of the Company’s then outstanding voting
      securities. Person means any individual or entity (or group(s) thereof acting
      together), which such individual or entity (or group thereof) is not a
      beneficial owner of any of the Company’s securities as of the date of this
      Agreement.

     

    (d) Withholding
      of Taxes.
      All
      payments required to be made by the Company to Executive under this Agreement
      shall be subject to the withholding of such amounts, if any, relating to tax,
      excise tax and other payroll deductions as the Company may reasonably determine
      it should withhold pursuant to any applicable law or regulation.

     

    (e) No
      Other Obligations.
      Except
      for the obligations of the Company provided by this Agreement and by operation
      of applicable law, the Company shall have no further obligations to Executive
      upon his termination of employment.

     

    
      	 	
              6.

            	
              Indemnity.

            

    

     

    The
      Company shall, during Executive’s employment with the Company and thereafter,
      indemnify Executive to the fullest extent permitted by law and by its
      Certificate of Incorporation and By-laws and shall assure that Executive is
      covered by the Company’s D&O insurance policies, if available, and any other
      insurance policies that protect employees as in effect from time to time. Such
      insurance policies shall be with providers, and provide for coverage in amounts,
      customary and reasonable within the industry in which the Company
      operates.

     

    
      	 	
              7.

            	
              Restrictive
                Covenants.

            

    

     

    (a) Proprietary
      Information.

     

    (i) Executive
      agrees that all information and know-how, whether or not in writing, of a
      private, secret or confidential nature concerning the business or financial
      affairs of the Company or any Affiliates (as defined in Section 7(f) below)
      is
      and shall be the exclusive property of the Company or any Affiliates. Such
      information and know-how shall include, but not be limited to, inventions,
      products, processes, methods, techniques, formulas, compositions, compounds,
      projects, developments, plans, research data, clinical data, financial data,
      personnel data, computer programs, customer and supplier lists, client lists,
      business plans, operational methods, pricing policies, marketing plans, sales
      plans, identity of suppliers or vendors, trading positions, sales, profits
      or
      other financial or business information, in each case of or relating to the
      business of the Company or any Affiliates (collectively, “Proprietary
      Information”). Except in connection with, and on a basis consistent with, the
      performance of his duties hereunder, Executive shall not disclose any
      Proprietary Information to others outside the Company or any Affiliates or
      use
      the same for any unauthorized purposes without written approval by the Board,
      either during or at any time after the Employment Period.

     

    (ii) Executive
      agrees that all files, letters, memoranda, reports, records, data, sketches,
      drawings, laboratory notebooks, program listings, customer lists, customer
      solicitations or other written, photographic, or other tangible material
      containing Proprietary Information, whether created by Executive or others,
      which shall come into his custody or possession, shall be and are the exclusive
      property of the Company or any Affiliates to be used by Executive only in the
      performance of his duties for the Company. Executive agrees to deliver to the
      Company upon the expiration of the Employment Period all such material
      containing Proprietary Information.

     

    
      
        
        

      

      
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    (iii) Executive
      agrees that his obligation not to disclose or use information, know-how and
      records of the types set forth in paragraphs (i)
      and
(ii)
      above,
      also extends to such types of information, know-how, records and tangible
      property of customers of the Company or any Affiliates or suppliers to the
      Company or any Affiliates or other third parties who may have disclosed or
      entrusted the same to the Company or any Affiliates or to Executive in the
      course of the Company’s business.

     

    (iv) Notwithstanding
      the foregoing, Proprietary Information shall not include information which
      (A)
      is or becomes generally available or known to the public, other than as a result
      of any disclosure by Executive in violation hereof; or (B) is or becomes
      available to Executive on a non-confidential basis from any source other than
      the Company, other than any such source that is prohibited by a legal,
      contractual, or fiduciary obligation to the Company from disclosing such
      information.

     

    (v) In
      the
      event that Executive is requested pursuant to, or becomes compelled by, any
      applicable law, regulation, or legal process to disclose any Proprietary
      Information, Executive shall provide the Company with prompt written notice
      thereof so that the Company may seek a protective order or other appropriate
      remedy or, in the Company’s sole and absolute discretion, waive compliance with
      the terms hereof. In the event that no such protective order or other remedy
      is
      obtained, or the Company waives compliance with the terms hereof, Executive
      shall furnish only that portion of such Proprietary Information which Executive
      is advised by counsel in writing is legally required. Executive will cooperate
      with the Company, at the Company’s sole cost and expense, in its efforts to
      obtain reliable assurance that confidential treatment will be accorded such
      Proprietary Information.

     

    (b) Developments.

     

    (i) Executive
      shall make full and prompt disclosure to the Company of all inventions,
      improvements, discoveries, methods, developments, software, and works of
      authorship, whether patentable or not, which are created, made, conceived or
      reduced to practice by Executive or under his direction or jointly with others
      during the Employment Period, whether or not during normal working hours or
      on
      the premises of the Company or any Affiliates (collectively,
“Developments”).

     

    (ii) Executive
      agrees to assign and does hereby assign to the Company (or any entity designated
      by the Company) all of his right, title and interest in and to all Developments
      and all related patents, patent applications, copyrights, copyright
      applications, trademark and trademark applications and other intellectual
      property of any kind or nature. Executive also hereby waives all claims to
      moral
      rights in any Developments.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (iii) Executive
      agrees to cooperate fully with the Company or any Affiliates, both during and
      after the Employment Period, with respect to the procurement, maintenance and
      enforcement of copyrights and patents (both in the United States and foreign
      countries) relating to Developments. Executive shall sign all papers, including,
      without limitation, copyright applications, patent applications, declarations,
      oaths, formal assignments, assignment of priority rights, and powers of
      attorney, which the Company or any Affiliates may deem necessary or desirable
      in
      order to protect their rights and interests in any Development.

     

    (c) Other
      Agreements.
      Executive represents that his performance of all the terms of this Agreement
      and
      as an employee of the Company does not and will not breach any agreement (i)
      to
      keep in confidence proprietary information, knowledge or data acquired by him
      in
      confidence or in trust prior to his employment with the Company, (ii) to refrain
      from competing, directly or indirectly, with the business of his previous
      employer or any other party, and (iii) to refrain from soliciting the employment
      of any employees of any previous employer or any other party.

     

    (d) Non-Competition
      and Non-Solicitation.
      During
      any period of Executive’s employment hereunder and for a period of two (2) years
      thereafter, Executive shall not engage (whether as an employee, consultant,
      director, agent or independent contractor) in any Business Activities on behalf
      of himself or any person, firm or entity, and Executive shall not acquire any
      financial interest (except for equity interests in publicly-held companies
      that
      will not be significant and that, in any event, will not exceed one percent
      (1%)
      of the outstanding equity of such company) in any entity which engages in
      Business Activities in the geographic area of the United States. During the
      period that the above noncompetition restriction applies, Executive shall not,
      without the written consent of the Company: (i) solicit any employee of the
      Company or any Affiliates to terminate his employment, or (ii) solicit any
      customers, partners, resellers, vendors or suppliers of the Company on behalf
      of
      any individual or entity other than the Company or its Affiliates. As used
      herein, the term “Business Activities” shall mean any and all
      business
      activities of the Company and any Affiliates as presently conducted and/or
      conducted for the past two (2) years.

     

    (e) Enforcement.
      The
      Company shall be entitled to seek a restraining order or injunction in any
      court
      of competent jurisdiction to prevent any continuation of any violation of the
      provisions of this Section 7.

     

    (f) Affiliates.
      For
      purposes of this Agreement, Affiliates shall mean any individuals or entities
      that directly or indirectly, through one or more intermediaries, controls,
      are
      controlled by or are under common control with the Company. For purposes of
      this
      definition, “control” means the power to direct the management and policies of
      another, whether through the ownership of voting securities, by contract or
      otherwise.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	 	
              8.

            	
              Notices.

            

    

     

    Any
      notice or other communication required or permitted to be given to any party
      hereunder shall be in writing and shall be given to such party at such party’s
      address set forth below or such other address as such party may hereafter
      specify by notice in writing to the other party. Any such notice or other
      communication shall be addressed as aforesaid and given by (a) certified mail,
      return receipt requested, with first class postage prepaid, (b) hand delivery,
      or (c) reputable overnight courier. Any notice or other communication will
      be
      deemed to have been duly given (i) on the fifth day after mailing, provided
      receipt of delivery is confirmed, if mailed by certified mail, return receipt
      requested, with first class postage prepaid, (ii) on the date of service if
      served personally or (iii) on the business day after delivery to an overnight
      courier service, provided receipt of delivery has been confirmed:

    

    If
      to the
      Company, to:

    

    Miller
      Petroleum, Inc.

    3651
      Baker Highway

    Huntsville,
      Tennessee 37756

    Attention:
      Deloy Miller, Chairman of the Board

    

    with
      a
      copy to:

    

    Snow
      Becker Krauss P.C.

    605
      Third
      Avenue

    New
      York,
      New York 10158

    
      	
            	Attention:	
              Jack
                Becker, Esq.

            

    

    David
      R.
      Fishkin, Esq.

    

    If
      to
      Executive, as follows:

    

    810
      Fairway Oaks Lane

    Knoxville,
      Tennessee 37922

     

    
      	 	
              9.

            	
              Non-Assignment;
                Successors.

            

    

     

    Neither
      party hereto may assign his or its rights or delegate his or its duties under
      this Agreement without the prior written consent of the other party, provided
      that, the Company may assign its rights hereunder to any affiliate or successor
      entity. This Agreement shall inure to the benefit of and be binding upon the
      heirs, assigns or designees of the parties hereto.

     

    
      	 	
              10.

            	
              Entire
                Agreement.

            

    

     

    This
      Agreement constitutes the entire agreement by the Company and Executive with
      respect to the subject matter hereof and supersedes any and all prior agreements
      or understandings between Executive and the Company with respect to the subject
      matter hereof, whether written or oral.

     

    
      
        
        

      

      
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            	11.	
              Amendment
                and Waiver.

            

    

     

    Any
      term
      of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance, either
      retroactively or prospectively, and either for a specified period of time or
      indefinitely), only by the written consent of all parties hereto. Any agreement
      on the part of a party to any extension or waiver shall only be valid if set
      forth in an instrument in writing signed on behalf of such party. Any such
      waiver or extension shall not operate as waiver or extension of any other
      subsequent condition or obligation.

     

    
      	
            	12.	
              Unenforceability,
                Severability.

            

    

     

    If
      any
      provision of this Agreement is found to be void or unenforceable by a court
      of
      competent jurisdiction, the remaining provisions of this Agreement shall
      nevertheless be binding upon the parties with the same force and effect as
      though the unenforceable part had been severed and deleted.

     

    
      	
            	13.	
              Specific
                Performance.

            

    

     

    The
      parties hereto agree that irreparable damage would occur if any of the
      provisions of this Agreement were not performed in accordance with their
      specific terms or otherwise breached. It is accordingly agreed that the parties
      shall be entitled to an injunction or injunctions to prevent breaches of this
      Agreement and to enforce specifically the terms and provisions hereof, in
      addition to any other remedy to which they are entitled at law or in
      equity.

     

    
      	 	
              14.

            	
              Governing
                Law.

            

    

     

    This
      Agreement shall be construed, interpreted and enforced in accordance with,
      and
      shall be governed by, the laws of the State of Tennessee applicable to contracts
      made and to be performed wholly therein without giving effect to principles
      of
      conflicts or choice of laws thereof.

     

    
      	
            	15.	
              Jurisdiction.

            

    

     

    Each
      of
      the parties hereto hereby irrevocably consents and submits to the exclusive
      jurisdiction of the state and federal courts located in Scott County, Tennessee
      in connection with any proceeding arising out of or relating to this Agreement
      or the transactions contemplated hereby and waives any objection to venue in
      Scott County, Tennessee. In addition, each of the parties hereto hereby waives
      trial by jury in connection with any claim or proceeding arising out of or
      relating to this Agreement or the transactions contemplated hereby.

     

    
      	 	
              16.

            	
              Counterparts.

            

    

     

    This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original but all of which together will constitute one and
      the
      same instrument.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first written above.

     

    
      	
              MILLER
                PETROLEUM, INC.

            
	 	 
	
              By:
                

            	/s/
Deloy
              Miller
	
              Name:
                Deloy Miller

            
	
              Title:
                Chairman of the Board

            
	 	 
	/s/
Scott
              M. Boruff
	Scott
              M. Boruff

    

     

    
      
        
        

      

      
        10Exhibit
        10.2

    

    
 

    NORTH
      AMERICAN SCIENTIFIC, INC.

     

    STOCK
      OPTION AGREEMENT

     

    Type
      of Option (check one):    xIncentive  oNonstatutory

     

    This
      Stock Option Agreement (the “Agreement”) is entered into as of August
      11,
      2008,
      by and between North American Scientific, Inc., a Delaware corporation (the
      “Company”), and Brett Scott (the “Optionee”) pursuant to the Company’s 2006
      Stock Plan, as amended (the “Plan”). Any capitalized term not defined herein
      shall have the same meaning ascribed to it in the Plan.

     

    1.  Grant
      of Option.
      The
      Company hereby grants to Optionee an option (the “Option”) to purchase all or
      any portion of a total of two
      hundred three thousand three hundred fifty-nine (203,359)
      shares
      (the “Shares”) of the Common Stock of the Company at a purchase price of
zero
      and 69/100 dollars
      ($0.69)
      per
      share (the “Exercise Price”), subject to the terms and conditions set forth
      herein and the provisions of the Plan. If the box marked “Incentive” above is
      checked, then this Option is intended to qualify as an “incentive stock option”
as defined in Section 422 of the Internal Revenue Code of 1986, as amended
      (the “Code”). If this Option fails in whole or in part to qualify as an
      incentive stock option, or if the box marked “Nonstatutory” is checked, then
      this Option shall to that extent constitute a nonqualified stock
      option.

     

    2.  Vesting
      of Option.
      

     

    (a)  The
      right
      to exercise this Option shall vest in installments, and this Option shall be
      exercisable from time to time in whole or in part as to any vested installment
      (“Vested Shares”). Commencing on the first anniversary of the “Vesting
      Commencement Date” 25% of the Shares shall become Vested Shares and thereafter
      the remaining Shares shall become Vested Shares in a series of thirty-six (36)
      successive equal monthly installments for each full month of Continuous Service
      provided by the Optionee, such that 100% of the Shares shall become Vested
      Shares on the fourth (4th) anniversary of the “Vesting Commencement Date.” For
      these purposes, the Vesting Commencement Date shall be the date hereof. No
      additional Shares shall vest after the date of termination of Optionee’s
“Continuous Service” (as defined below), but this Option shall continue to be
      exercisable in accordance with Section 3 below with respect to that number
      of shares that have vested as of the date of termination of Optionee’s
      Continuous Service. For purposes of this Agreement, the term “Continuous
      Service” means such period of time during which Optionee first establishes, and
      thereafter continuously maintains, his status as an Awardee Eligible to Vest,
      as
      set forth in Section 2(g) of the Plan. 

     

    (b)  Notwithstanding
      the foregoing subsection (a) of this Section 2, if the Optionee’s Continuous
      Service ceases as a result of the Optionee’s death, permanent and total
      disability or retirement due to age, in accordance with the Company’s or its
      Subsidiary’s or Affiliate’s retirement policy, any portion of this Option that
      does not constitute Vested Shares, shall immediately vest and become Vested
      Shares effective upon the date of Optionee’s death, disability or retirement, as
      the case may be. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.  Term
      of Option.
      The
      right of the Optionee to exercise this Option shall terminate upon the first
      to
      occur of the following:

     

    (a)  The
      expiration of seven (7) years from the date of this Agreement;

     

    (b)  The
      date
      on which the Administrator offers to purchase this Option in accordance with
      the
      Buyout Provisions set forth in Section 10(e) of the Plan; 

     

    (c)  In
      the
      case of a Nonstatutory Stock Option:

     

    (i)  if
      Optionee’s Continuous Service ceases due to the Optionee’s permanent and total
      disability, the expiration of one (1) year from the date of such disability;
      

     

    (ii)  if
      Optionee’s Continuous Service ceases due to the Optionee’s retirement due to
      age, in accordance with the Company’s or its Subsidiary’s or Affiliate’s
      retirement policy, the expiration of one (1) year from the date of such
      retirement; 

     

    (iii)  if
      Optionee’s Continuous Service ceases due to the Optionee’s death, the expiration
      of one (1) year from the date of death; or 

     

    (iv)  if
      Optionee’s Continuous Service ceases other than as a result of the circumstances
      set forth in paragraphs (i)-(iii) of this subsection (c), the expiration of
      three (3) months after Optionee’s cessation of Continuous Service. 

     

    (d)  In
      the
      case of an Incentive Stock Option: 

     

    (i)  if
      Optionee’s Continuous Service ceases due to the Optionee’s permanent and total
      disability, the expiration of one (1) year from the date of such disability;
      

     

    (ii)  if
      Optionee’s Continuous Service ceases due to the Optionee’s retirement due to
      age, in accordance with the Company’s or its Subsidiary’s or Affiliate’s
      retirement policy, the expiration of three (3) months from the date of such
      retirement; 

     

    (iii)  if
      Optionee’s Continuous Service ceases due to the Optionee’s death, or if death
      occurs during the three-month period set forth in paragraph (ii) of this
      subsection (d), the expiration of one (1) year from the date of death; or

     

    (iv)  the
      expiration of three (3) months from the date of termination of Optionee’s
      Continuous Service if such termination occurs for any reason other than
      permanent disability, death, voluntary resignation or cause; provided, however,
      that if Optionee dies during such three-month period the provisions of
      Section 3(c) above shall apply;

     

    (v)  the
      expiration of one (1) month from the date of termination of Optionee’s
      Continuous Service if such termination occurs due to voluntary resignation;
      provided, however, that if Optionee dies during such one-month period the
      provisions of Section 3(d)(iii) above shall apply; 

     

    (vi)  the
      termination of Optionee’s Continuous Service, if such termination is for “Cause”
(as defined below); or

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (vii)  upon
      the
      consummation of a Dissolution or Liquidation or a “Change in Control” (as
      defined in Section 16(c) of the Plan), unless otherwise provided pursuant
      to Sections 8 or  9 below.

     

    For
      purposes of this Agreement, “Cause” shall mean (A) the commission of any act of
      fraud, embezzlement or dishonesty by Optionee which materially and adversely
      affects the business of the Company, the acquiring or successor entity (or
      parent or any subsidiary thereof), (B) any unauthorized use or disclosure by
      Optionee of confidential information or trade secrets of the Company, the
      acquiring or successor entity (or parent or any subsidiary thereof), (C) the
      continued refusal or omission by the Optionee to perform any material duties
      required of him if such duties are consistent with duties customary for the
      position held with the Company, the acquiring or successor entity (or parent
      or
      any subsidiary thereof), (D) any material act or omission by the Optionee
      involving malfeasance or gross negligence in the performance of Optionee’s
      duties to, or material deviation from any of the policies or directives of,
      the
      Company or the acquiring or successor entity (or parent or any subsidiary
      thereof), (E) conduct on the part of Optionee which constitutes the breach
      of
      any statutory or common law duty of loyalty to the Company, the acquiring or
      successor entity (or parent or any subsidiary thereof), or (F) any illegal
      act
      by Optionee which materially and adversely affects the business of the Company,
      the acquiring or successor entity (or parent or any subsidiary thereof), or
      any
      felony committed by Optionee, as evidenced by conviction thereof. The provisions
      of this Section shall not limit the grounds for the dismissal or discharge
      of
      Optionee or any other individual in the service of the Company, the acquiring
      or
      successor entity (or parent or any subsidiary thereof).

     

    4.  Exercise
      of Option.
      On or
      after the vesting of any portion of this Option in accordance with
      Sections 2, 8 or 9 hereof, and until termination of the right to exercise
      this Option in accordance with Section 3 above, the portion of this Option
      that has vested may be exercised in whole or in part by the Optionee (or, after
      his or her death, by the person designated in Section 5 below) upon
      delivery of the following to the Company at its principal executive
      offices:

     

    (a)  a
      written
      notice of exercise which identifies this Agreement and states the number of
      Shares then being purchased (but no fractional Shares may be purchased), with
      any partial exercise being deemed to cover first vested Shares and then the
      earliest vesting installments of unvested Shares;

     

    (b)  a
      check
      or cash (denominated in currency of the United States) in the amount of the
      Exercise Price (or payment of the Exercise Price in such other form of lawful
      consideration as the Administrator may approve from time to time under the
      provisions of Section 10 of the Plan);

     

    (c)  in
      the
      case of a Nonstatutory Stock Option, a check or cash (denominated in currency
      of
      the United States) in the amount reasonably requested by the Company to satisfy
      the Company’s withholding obligations under Federal, state or other applicable
      tax laws with respect to the taxable income, if any, recognized by the Optionee
      in connection with the exercise of this Option (unless the Company and Optionee
      shall have made other arrangements for deductions or withholding from Optionee’s
      wages, bonus or other compensation payable to Optionee, or by the withholding
      of
      Shares issuable upon exercise of this Option or the delivery of Shares owned
      by
      the Optionee in accordance with Section 4(b) of the Plan, provided such
      arrangements satisfy the requirements of applicable tax laws); and

     

    (d)  a
      letter,
      if requested by the Company, in such form and substance as the Company may
      require, setting forth the investment intent of the Optionee, or person
      designated in Section 5 below, as the case may be. 

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    5.  Death
      of Optionee; No Assignment.
      The
      rights of the Optionee under this Agreement may not be assigned or transferred
      except by will or by the laws of descent and distribution, and may be exercised
      during the lifetime of the Optionee only by such Optionee. Any attempt to sell,
      pledge, assign, hypothecate, transfer or dispose of this Option in contravention
      of this Agreement or the Plan shall be void and shall have no effect. In the
      event of the Optionee’s death, Optionee’s legal representative, his or her
      legatee, or the person who acquired the right to exercise this Option by reason
      of the death of the Optionee (individually, a “Successor”) shall succeed to the
      Optionee’s rights and obligations under this Agreement. After the death of the
      Optionee, only a Successor may exercise this Option.

     

    6.  Representations
      and Warranties of Optionee.
      

     

    (a)  Optionee
      represents and warrants that this Option is being acquired by Optionee for
      Optionee’s personal account, for investment purposes only, and not with a view
      to the distribution, resale or other disposition thereof.

     

    (b)  Optionee
      acknowledges that the Company may issue Shares upon the exercise of the Option
      without registering such Shares under the Securities Act of l933, as amended
      (the “Securities Act”), on the basis of certain exemptions from such
      registration requirement. Accordingly, Optionee agrees that his or her exercise
      of the Option may be expressly conditioned upon his or her delivery to the
      Company of an investment certificate including such representations and
      undertakings as the Company may reasonably require in order to assure the
      availability of such exemptions, including a representation that Optionee is
      acquiring the Shares for investment and not with a present intention of selling
      or otherwise disposing thereof and an agreement by Optionee that the
      certificates evidencing the Shares may bear a legend indicating such
      non-registration under the Securities Act and the resulting restrictions on
      transfer. Optionee acknowledges that, because Shares received upon exercise
      of
      an Option may be unregistered, Optionee may be required to hold the Shares
      indefinitely unless they are subsequently registered for resale under the
      Securities Act or an exemption from such registration is available.

     

    (c)  Optionee
      acknowledges receipt of a copy of the Plan and understands that all rights
      and
      obligations connected with this Option are set forth in this Agreement and
      in
      the Plan. 

     

    7.  Adjustments
      Upon Changes in Capital Structure.
      In the
      event that the outstanding shares of Common Stock of the Company are hereafter
      increased or decreased or changed into or exchanged for a different number
      or
      kind of shares or other securities of the Company by reason of a
      recapitalization, stock split, combination of shares, reclassification, stock
      dividend or other change in the capital structure of the Company, then
      appropriate adjustment shall be made by the Administrator to the number of
      Shares subject to the unexercised portion of this Option and to the Exercise
      Price per share, in order to preserve, as nearly as practical, but not to
      increase, the benefits of the Optionee under this Option, in accordance with
      the
      provisions of Section 16(a) of the Plan.

     

    8.  Dissolution
      or Liquidation.
      In the
      event of a proposed dissolution or liquidation of the Company (as described
      in
      Section 16(b) of the Plan), the Administrator, in its sole discretion, may
      cause
      the Optionee’s right to exercise this Option to accelerate automatically and
      vest in full (notwithstanding the provisions of Section 2 above) until ten
      (10)
      days prior to such event or such shorter administratively reasonable period
      of
      time as the Administrator may establish in its discretion.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    9.  Change
      in Control.
      In the
      event of a Change in Control (as defined in Section 16(c) of the
      Plan):

     

    (a)  The
      right
      to exercise this Option shall accelerate automatically and vest in full
      (notwithstanding the provisions of Section 2 above) effective as of
      immediately prior to the consummation of the Change in Control unless
      this
      Option is to be assumed by the acquiring or successor entity (or parent thereof)
      or a new option or New Incentives are to be issued in exchange therefor, as
      provided in subsection (b) of this Section 9. If vesting of this Option will
      accelerate pursuant to the preceding sentence, the Administrator in its
      discretion may provide, in connection with the Change in Control transaction,
      for the purchase or exchange of this Option for an amount of cash or other
      property having a value equal to the difference (or “spread”) between:
      (x) the value of the cash or other property that the Optionee would have
      received pursuant to the Change in Control transaction in exchange for the
      Shares issuable upon exercise of this Option had this Option been exercised
      immediately prior to the Change in Control, and (y) the aggregate Exercise
      Price for such Shares. If the vesting of this Option will accelerate pursuant
      to
      this subsection (a), then the Administrator shall cause written notice of the
      Change in Control transaction to be given to the Optionee not less than fifteen
      (15) days prior to the anticipated effective date of the proposed
      transaction.

     

    (b)  The
      vesting of this Option shall
      not
      accelerate if and to the extent that: (i) this Option (including the
      unvested portion thereof) is to be assumed by the acquiring or successor entity
      (or parent thereof) or a new option of comparable value is to be issued in
      exchange therefor pursuant to the terms of the Change in Control transaction,
      or
      (ii) this Option (including the unvested portion thereof) is to be replaced
      by the acquiring or successor entity (or parent thereof) with other incentives
      of comparable value under a new incentive program (“New Incentives”) containing
      such terms and provisions as the Administrator in its discretion may consider
      equitable; provided, however, that in the event of a Change in Control in which
      one or more of the successor or a parent or subsidiary of the successor has
      issued publicly traded equity securities, such assumption of this Option or
      issuance of a new option or New Incentives shall be made by an entity with
      publicly traded equity securities and shall provide that the holders of such
      assumed Options, new options or New Incentives shall be able to acquire publicly
      traded securities. If this Option is assumed, or if a new option of comparable
      value is issued in exchange therefor, then this Option or the new options shall
      be appropriately adjusted, concurrently with the Change in Control, to apply
      to
      the number and class of securities or other property that the Optionee would
      have received pursuant to the Change in Control transaction in exchange for
      the
      Shares issuable upon exercise of this Option had this Option been exercised
      immediately prior to the Change in Control, and appropriate adjustment also
      shall be made to the Exercise Price such that the aggregate Exercise Price
      of
      this Option or the new options shall remain the same as nearly as
      practicable.

     

    (c)  If
      the
      provisions of subsection (b) of this Section 9 apply, then this Option, the
      new
      options or the New Incentives shall continue to vest in accordance with the
      provisions of Section 2 above and shall continue in effect for the
      remainder of the term of this Option in accordance with the provisions of
      Section 3 above. However, in the event of an Involuntary Termination (as
      defined below) of Optionee’s Continuous Service within twelve (12) months
      following such Change in Control, then vesting of this Option, the new option
      or
      the New Incentives shall accelerate in full automatically effective upon such
      Involuntary Termination. In addition, if the Optionee has remained with the
      Company or its successor for twelve months following the Change of Control,
      then
      all of the Options, the new options or the New Incentives shall become fully
      vested as of the twelve month anniversary of the date of the Change of
      Control.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    For
      purposes of this Section 9, “Involuntary Termination” shall mean the
      termination of Optionee’s Continuous Service by reason of:

     

    (A)  Optionee’s
      involuntary dismissal or discharge by the Company, or by the acquiring or
      successor entity (or parent or any subsidiary thereof employing the Optionee)
      for reasons other than Cause (as defined in Section 3 above), or 

     

    (B)  Optionee’s
      voluntary resignation following (x) a change in Optionee’s position with
      the Company, the acquiring or successor entity (or parent or any subsidiary
      thereof) which materially reduces Optionee’s duties and responsibilities or the
      level of management to which Optionee reports, (y) a reduction in
      Optionee’s level of compensation (including base salary, fringe benefits and
      target bonus under any performance based bonus or incentive programs) by more
      than ten percent (10%), or (z) a relocation of Optionee’s principal place
      of employment by more than fifty (50) miles, provided and only if such change,
      reduction or relocation is effected without Optionee’s written
      consent.

     

    10.  Limitation
      of Company’s Liability for Nonissuance.
      The
      Company agrees to use its reasonable best efforts to obtain from any applicable
      regulatory agency such authority or approval as may be required in order to
      issue and sell the Shares to the Optionee pursuant to this Option. Inability
      of
      the Company to obtain, from any such regulatory agency, authority or approval
      deemed by the Company’s counsel to be necessary for the lawful issuance and sale
      of the Shares hereunder and under the Plan shall relieve the Company of any
      liability in respect of the nonissuance or sale of such shares as to which
      such
      requisite authority or approval shall not have been obtained.

     

    11.  No
      Employment Contract Created.
      Neither
      the granting of this Option nor the exercise hereof shall be construed as
      granting to the Optionee any right with respect to continuance of employment
      by
      the Company or any of its subsidiaries. The right of the Company or any of
      its
      subsidiaries to terminate at will the Optionee’s employment at any time (whether
      by dismissal, discharge or otherwise), with or without cause, is specifically
      reserved.

     

    12.  Rights
      as Stockholder.
      The
      Optionee (or transferee of this option by will or by the laws of descent and
      distribution) shall have no rights as a stockholder with respect to any Shares
      covered by this Option until such person has duly exercised this Option, paid
      the Exercise Price and become a holder of record of the Shares
      purchased.

     

    13.  Interpretation.
      This
      Option is granted pursuant to the terms of the Plan, and shall in all respects
      be interpreted in accordance therewith. The Administrator shall interpret and
      construe this Option and the Plan, and any action, decision, interpretation
      or
      determination made in good faith by the Administrator shall be final and binding
      on the Company and the Optionee. As used in this Agreement, the term
“Administrator” shall refer to the committee of the Board of Directors of the
      Company appointed to administer the Plan, and mean the Board of
      Directors.

     

    14.  Notices.
      Any
      notice, demand or request required or permitted to be given under this Agreement
      shall be in writing and shall be deemed given when delivered personally or
      three
      (3) days after being deposited in the United States mail, as certified or
      registered mail, with postage prepaid, (or by such other method as the
      Administrator may from time to time deem appropriate), and addressed, if to
      the
      Company, at its principal place of business, Attention: the Chief Financial
      Officer, and if to the Optionee, at his or her most recent address as shown
      in
      the employment or stock records of the Company.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    15.  Governing
      Law.
      The
      validity, construction, interpretation, and effect of this Option shall be
      governed by and determined in accordance with the substantive laws, but not
      the
      choice of law rules, of the State of Delaware, to the extent not preempted
      by
      Federal law. 

     

    16.  Severability.
      Should
      any provision or portion of this Agreement be held to be unenforceable or
      invalid for any reason, the remaining provisions and portions of this Agreement
      shall be unaffected by such holding.

     

    17.  Attorneys’
      Fees.
      If any
      party shall bring an action in law or equity against another to enforce or
      interpret any of the terms, covenants and provisions of this Agreement, the
      prevailing party in such action shall be entitled to recover reasonable
      attorneys’ fees and costs.

     

    18.  Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which together shall be deemed one
      instrument.

     

    [Signature
      Page Follows]

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

     

    
      	 	 	 
	 	NORTH
              AMERICAN SCIENTIFIC, INC.
	 
 	 
 	 
 
	 	By:  	/s/ John
              Rush
	 	
              
John
              Rush, Chief Executive
              Officer

    

    
       

      
        	 	 	 
	 	OPTIONEE
	 
 	 
 	 
 
	 	        
                	/s/ Brett
                L.
                Scott
	 	
                
Brett
                L. Scott

      

       

      
        
           

        

        
          8

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