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                                                                    Exhibit 10.4
                                SPATIALIGHT, INC.

                  TIME ACCELERATED RESTRICTED STOCK AWARD PLAN

                                   ("TARSAP")

TARSAP (this  "AGREEMENT" or the "OPTION  AGREEMENT")  made as of the 7th day of
July,   2003   between   SPATIALIGHT,   INC.,  a  New  York   corporation   (the
"CORPORATION"),  whose  principal  place of  business  is  located at 5 Hamilton
Landing,  Suite 100,  Novato,  California  94949,  and  Theodore H. Banzhaf (the
"OPTIONEE") whose principal residence is located at 1801 Gough Street #403 , San
Francisco, CA 94109



                                    PREAMBLE

         The Corporation and Optionee have entered into an Employment  Agreement
effective as of the date of this Agreement (the  "EFFECTIVE  DATE")  pursuant to
which  Optionee  will serve as the  Corporation's  Executive  Vice  President of
Strategic   Planning  upon  the  terms  set  forth   therein  (the   "EMPLOYMENT
AGREEMENT").  As a material  inducement  for Optionee to become  employed as the
Corporation's  Executive Vice President of Strategic  Planning,  the Corporation
has agreed to grant  Optionee  options to purchase its Common  Shares,  $.01 par
value per share  (the  "SHARES")  subject  to the terms and  conditions  of this
Agreement.

     1. GRANT OF OPTIONS.

     (a) Upon the terms and subject to the conditions hereinafter set forth, the
Corporation  hereby grants to the Optionee the right and option to purchase from
the  Corporation  a total of Eight  Hundred  Thousand  (800,000)  Shares  of the
Corporation at an exercise (i.e.,  purchase) price  determined by the provisions
of  Section 6 hereof  (the  "OPTIONS").  The  Options  granted  hereby  shall be
exercisable  as  provided  in Sections 2 and 3 hereof  unless  terminated  at an
earlier  date in  accordance  with the terms of this  Agreement.  If the Options
shall  terminate  for any reason  without  having been  exercised  in full,  the
Corporation may use any then remaining unpurchased Shares reserved for the grant
of options to any other  employee or party selected by the Board of Directors of
the Corporation (the "BOARD") or for any other appropriate corporate purpose, as
determined  in the sole  discretion  of the  Board.  The  Options  shall  become
exercisable immediately upon vesting.

     (b) The Options granted by this Agreement are not, and shall not be deemed,
to have been granted under the  Corporation's  1999 Stock Option Plan (the "1999
PLAN"), the Corporation's 1993 Non-Statutory Stock Option Plan (the "1993 PLAN")
or any  other  stock  option  plan of the  Corporation  in effect as of the date
hereof or hereafter adopted (the "OTHER PLANS"),  and the number of Shares which
may be reserved for the  Optionee's  exercise of the Options  granted  hereunder
shall not  reduce the number of Shares  reserved  under the 1999 Plan,  the 1993
Plan or any Other Plans and, in the event the Options  granted  hereunder  shall
terminate for any reason without having been exercised in full, none of any then
remaining  unpurchased  Shares  subject to the Options shall  increase the total
number of Shares then reserved for purchase  under the 1999 Plan,  the 1993 Plan
or any Other Plan of the Corporation.

     (c) It is intended  both by the  Corporation  and Optionee that the Options
granted hereby shall be Non-Statutory Stock Options.

     2. EXERCISE OF OPTION.

     (a) Subject to the limitations  set forth in this  Agreement,  the Optionee
may exercise the Options, in whole or in part, to the extent then exercisable in
accordance with this Agreement,  by forwarding to the Corporation written notice
stating the Optionee's election of such exercise right and specifying the number
of whole Shares to be purchased,  accompanied by the Optionee's  payment in full
of the aggregate  option price of the Shares being  purchased in cash, by check,
or, in the discretion of the



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Board, by the delivery of Shares (such Shares to be credited  against the option
price in an amount  equal to their  aggregate  Fair  Market  Value as defined in
Section 13 hereof on the date of exercise) or any combination  thereof  ("NOTICE
OF  EXERCISE").  The  Optionee  shall be  responsible  for and  shall pay to the
Corporation  all withholding and other similar taxes which may be payable by the
Optionee upon exercise of the Options, if applicable.

     (b) As soon as practicable  after receipt by the  Corporation of the Notice
of  Exercise  and of full  payment of the  exercise  price for all  Shares  with
respect to which the Options are being exercised,  a certificate or certificates
representing  the  purchased  Shares shall be  registered  in the records of the
Corporation  in the name of the Optionee or his successor and shall be delivered
to the Optionee or his successor at the Optionee's  address shown in the payroll
records of the  Corporation  or at such other  address as may be  designated  in
writing by the  Optionee  in the  Optionee's  Notice of  Exercise.  Neither  the
Optionee nor his  successor or legal  representative  shall have any rights as a
shareholder  of the  Corporation  in  respect of any  Shares  issuable  upon the
exercise of this Option  prior to the record date as of which  certificates  for
such Shares shall have been issued by the Corporation as hereinabove provided.

     (c) Unless the Options are terminated  earlier in accordance with the terms
hereof, the Options and all rights thereunder shall expire on, and may no longer
be exercised  after,  the third (3rd)  anniversary  after each of the respective
dates upon which the percentages of the Options to purchase the number of Shares
designated  herein have vested and become  exercisable  in  accordance  with the
provisions of Section 3.

3. VESTING AND EXERCISABILITY OF OPTIONS.

Options to purchase an aggregate of 800,000 Shares of the Corporation shall vest
and be exercisable upon the occurrence of the following events,  satisfaction of
the following conditions and upon or by the following dates:

     (a) Options to purchase 125,000 Shares shall vest and be exercisable on the
Effective Date;

     (b) Options to purchase the  remaining  aggregate  of up to 675,000  Shares
shall vest and be exercisable on such dates upon which the following performance
tests shall have been satisfied;  provided,  however,  that the outside date for
the satisfaction of each such performance  shall be the second (2nd) anniversary
of the Effective Date and no such performance test may be satisfied, in whole or
in part, after such second (2nd) anniversary of the Effective Date:

                    (i) Options to purchase an additional  175,000  Shares shall
               vest and become  exercisable  if the  Shares  shall  achieve  and
               maintain  the Fair Market  Value of $5 per Share for a minimum of
               twenty  (20)  consecutive  trading  days  thereafter  (each  such
               period, a "FMV PERIOD");

                    (ii) Options to purchase an additional  225,000 Shares shall
               vest and become  exercisable  if the  Shares  shall  achieve  and
               maintain  the Fair Market  Value of $7.50 per Share for a minimum
               of a FMV Period;

                    (iii) Options to purchase an additional 275,000 Shares shall
               vest and become  exercisable  if the  Shares  shall  achieve  and
               maintain  the Fair Market Value of $12.50 per Share for a minimum
               of a FMV Period;

     PROVIDED, HOWEVER, that:

               (A) In the  event  that the  Shares  achieve  either  of the Fair
               Market Values set forth in Sections  3(b)(ii) or 3(b)(iii)  above
               before  satisfying  the Fair  Market  Value  test  under  Section
               3(b)(i)  above,  or in the event that the Shares achieve the Fair
               Market  Value test set forth in Section  3(b)(iii)  above  before
               satisfying  the Fair Market  Value test under  Section  3(b)(ii),
               then the Options to  purchase


                                      -2-

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               the  total  number  of  Shares  shall  vest  cumulatively  at the
               respective   exercise  prices  set  forth  in  Sections  3(b)(i),
               3(b)(ii) and/or 3(b)(iii), as the case may be; and

               (B) As used in this Section 3(b), for purposes of determining the
               twenty (20) trading days comprising the FMV Period,  any business
               day upon  which  there  shall be no  trading in the Shares of the
               Corporation shall not be counted.

     (c) In no event  shall any of the  Options  granted  hereunder  vest and be
exercisable  unless the Optionee is an Employee of the Corporation or any of its
Subsidiaries  on any such  vesting  date;  PROVIDED,  HOWEVER,  in the event the
Employee's   employment  is  terminated  by  the   Corporation  or  any  of  its
Subsidiaries  without  Cause  pursuant  to Section  2(b)(iv)  of the  Employment
Agreement,  the Options shall vest and be  exercisable  to the extent any of the
performance  tests set forth in Section  3(b)(i) through (iii),  inclusive,  are
satisfied during the ninety (90) day period  immediately  succeeding the date of
termination of his employment.

     (d)  Notwithstanding any of the provisions of Sections 3(a) or (b), none of
the Options  granted  hereunder,  including  any  Options  which have vested and
therefore  become  exercisable,  may be exercised until the  shareholders of the
Corporation  shall,  if  required  by New  York  law or the  regulations  of any
exchange or inter-dealer  system upon which the Company's  Shares will be listed
or in which such Shares shall be traded,  approve the grant of the Options which
are the  subject  of  this  Agreement  as  provided  in  Section  15(a)  of this
Agreement.

4. EXERCISE AFTER TERMINATION OF SERVICE.

After the Optionee ceases to be an Employee of the Corporation or any Subsidiary
of the  Corporation,  as the  case may be,  whether  as a  result  of  voluntary
termination,  termination by the Corporation or such Subsidiary or by the normal
retirement,  early retirement or disability  (excluding  Permanent Disability as
defined in Section 5 below) of the Optionee,  only such Options that have vested
and become  exercisable on or before the Date of Termination  (as defined in the
Employment Agreement) may be exercised by the Optionee, his attorney-in-fact, or
his guardian,  as appropriate,  at any time after the date on which the Optionee
ceases to be an Employee but no later than the earlier of ninety (90) days after
the Optionee  ceases to be employed by the Corporation or such Subsidiary or the
last day of the fixed term of the Option; PROVIDED,  HOWEVER, that, in the event
that the  employment  of  Optionee  is  terminated  for Cause (as defined in the
Employment Agreement), any then outstanding Options held by Optionee, whether or
not vested and  exercisable  by Optionee as of the date of such  termination  of
employment  for Cause,  shall  thereupon  be canceled  and  terminated  in their
entirety and be of no further force or effect and Optionee shall have no further
rights thereto or thereunder or under this Agreement.

5. EXERCISE IN CASE OF DEATH OR PERMANENT DISABILITY.

If the Optionee shall die or become  permanently and totally disabled within the
meaning of relevant provisions of the Employment Agreement (hereinafter referred
to as "PERMANENTLY  DISABLED" or a "PERMANENT  DISABILITY") while an employee of
the  Corporation or of a Subsidiary  thereof,  and Optionee,  at the time of the
Optionee's death or Permanent  Disability,  shall have been entitled to exercise
all or any portion of the  Options  granted  hereby,  then the Options may be so
exercised by the Optionee or his legal representative, as the case may be, or by
his estate,  or by a person who  acquires  the right to exercise  the Options by
bequest  or  inheritance,  at any time  after  the  date of  death or  Permanent
Disability  but no later than the earlier of (a) twelve  (12)  months  after the
date of death,  Permanent  Disability of the Optionee or (b) the last day of the
fixed term of the Options.

6. EXERCISE PRICE OF OPTIONS.

The exercise price of the Options (subject to adjustment by reason of any of the
events set forth in Section 7 hereof), shall equal:

                                      -3-

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     (a)  With  respect  to the  Options  described  in  Sections  3(a)  of this
Agreement,  the Fair  Market  Value of the Shares as of July 3, 2003 - - to wit,
Two Dollars and Fifty-five Cents ($2.55) per Share.

     (b) With  respect to the  Options  described  in  Sections  3(b)(i) of this
Agreement, Five Dollars ($5.00) per Share.

     (c) With  respect to the Options  described  in  Sections  3(b)(ii) of this
Agreement, Seven Dollars and Fifty Cents ($7.50) per Share.

     (d) With  respect to the Options  described  in Sections  3(b)(iii) of this
Agreement, Twelve Dollars and Fifty Cents ($12.50) per Share.

7. ADJUSTMENTS UPON CHANGE OF SHARES.

     (a)   In   the   event   of  a   reorganization,   merger,   consolidation,
reclassification, recapitalization, any combination or exchange of Shares, stock
split,   stock   dividend,   rights   offering  or  other  event  affecting  the
capitalization  of the Corporation,  the number and class of Shares then subject
to the Options as of the  effective  date or record date of any such event,  and
the price per Share  payable upon  exercise of the  Options,  shall be equitably
adjusted by the Board to reflect any such event.

     (b) Upon the effective date of any merger,  consolidation or reorganization
of the  Corporation  with one or more  corporations  or other legal  entities in
which the  Corporation is not the surviving  corporation or entity,  or upon the
effective  date  of any  liquidation  of the  Corporation  or of a  transfer  of
substantially  all of the assets or transfer of more than fifty percent (50%) of
the then  outstanding  Shares of the  Corporation to a theretofore  unaffiliated
third party (hereinafter  collectively  referred to as the  "TRANSACTION"),  any
Options granted hereby which have not vested and become exercisable (prior to or
by reason of the Transaction)  shall terminate unless  provisions have been made
in writing in connection  with any such  Transaction  for the assumption of such
unvested  Options by such  successor  employer  corporation or other entity or a
parent or subsidiary thereof or for the substitution of such unvested Options by
new  options  covering  shares  or  other  equity  interests  of such  successor
corporation or other entity, with appropriate adjustments as to the number, kind
and prices of shares or other  equity  interests,  in which  event the  unvested
Options  or the new  options  substituted  therefor,  as the case may be,  shall
continue  to be  exercisable  in the manner and upon the terms set forth in this
Agreement.  Prior to any such  termination of any then unvested Options upon the
effective date of any such  Transaction,  the Board may, in its sole discretion,
grant to the Optionee the right  immediately prior to the effective date of such
Transaction  to exercise the  Options,  in whole or in part,  provided  that all
conditions  precedent  to the  vesting  thereof  (prior  to or by  reason of the
Transaction)  set forth herein,  other than the passage of time, shall have been
satisfied. In any such event, the Corporation will mail or cause to be mailed to
the Optionee a notice (the "ACCELERATION  NOTICE")  specifying the date which is
to be fixed as of which all holders of record of the Shares shall be entitled to
exchange  their  Shares  for  securities,  cash or other  property  issuable  or
deliverable  pursuant to such  Transaction.  The  Acceleration  Notice  shall be
mailed at least  fifteen (15) days prior to such  specified  date.  In the event
that any then  outstanding  Options  which have  vested  and become  exercisable
(prior to or by reason of the  Transaction)  are not exercised in their entirety
on or before the date specified  therefor in the Acceleration  Notice,  all such
Options and all rights  thereunder  shall  terminate  and be canceled as of said
date and any Options which have not so vested and become  exercisable as of said
date  shall also  terminate  and be  canceled  in their  entirety.

     (c) Upon any  adjustment  made pursuant to this Section 7, the  Corporation
will,  upon request,  deliver to the Optionee or his successor a certificate  or
the Corporation's Secretary or an Assistant Secretary setting forth the adjusted
Option  price  thereafter  in effect and the  number  and kind of shares,  other
securities or other  property  thereafter  purchasable  upon the exercise of the
Options.

     (d) The determination of the Board with respect to any adjustments effected
pursuant to this Section 7 shall be conclusive and binding on the Optionee.


                                      -4-

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8. NON-TRANSFERABILITY OF OPTIONS

This  Option  Agreement  shall be binding  upon and inure to the  benefit of the
parties hereto and any successor to the business of the Corporation, but none of
the  Options  nor  any  rights  granted  to  the  Optionee  hereunder  shall  be
transferable or assignable,  in whole or in part, by the Optionee otherwise than
by will or by the laws of descent and distribution,  and, during the lifetime of
the Optionee,  the Options and rights  granted to the Optionee  hereunder may be
exercised only by his except as otherwise expressly provided for herein.

9. REGISTRATION OR QUALIFICATION OF SHARES.

The Options shall be subject to the  requirement  that, if at any time the Board
shall  determine,  in its sole  discretion,  that the listing,  registration  or
qualification of the Shares subject to the Options upon any securities exchange,
inter-dealer  quotation  market  system  or  under  any  state or  federal  law,
including the Securities Act of 1933, as amended (the "SECURITIES  ACT"), or the
consent or  approval  of any  governmental  regulatory  body,  is  necessary  or
desirable as a condition of, or in connection  with, the granting of the Options
or the  issue or  purchase  of Shares  hereunder,  then the  Options  may not be
exercised,   in  whole  or  in  part,   unless   such   listing,   registration,
qualification,  consent or approval shall have been effected or obtained free of
any  conditions not acceptable to the Board.  The  Corporation  may, in its sole
discretion,  at  any  time  and  from  time  to  time,  file  (or  maintain  the
effectiveness  of) a registration  statement under the Securities Act, and list,
register or qualify  under any other state or federal law, all or any portion of
the Options and the Shares issuable upon the exercise  thereof,  but nothing set
forth  herein  shall  obligate  the  Corporation  to file  or  effect  any  such
registration  under the  Securities  Act or  listing or  qualification  upon any
securities  exchange,  inter-dealer  quotation  market system or under any other
federal or state securities law.

10. COMPLIANCE WITH SECURITIES AND OTHER APPLICABLE LAW.

The grant of Options and the  issuance  of Shares  upon the  exercise of Options
shall be subject to  compliance  with all  applicable  requirements  of federal,
state and  foreign  law with  respect  to such  securities.  Options  may not be
exercised if the issuance of Shares upon exercise  would  constitute a violation
of any  applicable  federal,  state or foreign  securities  laws or other law or
regulations or the requirements of any stock exchange or inter-dealer  quotation
market system upon which the Shares may then be listed. In addition,  no Options
may be exercised  unless (a) a registration  statement  under the Securities Act
shall at the time or exercise  of the  Options be in effect with  respect to the
Shares  issuable  upon  exercise  of the  Options or (b) in the opinion of legal
counsel to the Corporation, the Shares issuable upon exercise of the Options may
be  issued in  accordance  with the terms of an  applicable  exemption  from the
registration   requirements   of  the  Securities  Act.  The  inability  of  the
Corporation  to  obtain  from  any  regulatory  body  having   jurisdiction  the
authority,  if any, deemed by the Corporation's legal counsel to be necessary to
the  lawful  issuance  and  sale  of any  Shares  hereunder  shall  relieve  the
Corporation  of any  liability  in respect of the  failure to issue or sell such
shares as to which such requisite  authority shall not have been obtained.  As a
condition to the exercise of any of the Options, the Corporation may require the
Optionee to satisfy any qualifications that may be necessary or appropriate,  to
evidence  compliance  with  any  applicable  law or  regulation  and to make any
representation  or  warranty  with  respect  hereto as may be  requested  by the
Corporation.

11. REPRESENTATIONS AT TIME OF EXERCISE: LEGEND.

The Board may require,  as a condition  to the  exercise of the Options  granted
pursuant to this Agreement,  in whole or in part,  that the Corporation  receive
from Optionee or his successor, such representations, warranties and agreements,
at the time of any such  exercise,  to the effect that all Shares  acquired upon
exercise of the Options,  or any part  thereof,  shall be sold,  transferred  or
otherwise disposed of only upon compliance with the registration requirements of
the Securities Act or in reliance on an exemption therefrom which is the subject
of an opinion from the Corporation's  legal counsel.  The certificate  issued to
evidence  such  Shares  shall  bear   appropriate   legends   summarizing   such
restrictions on the disposition thereof.

                                      -5-

<PAGE>



12. RESERVATION OF SHARES.

The  Corporation  shall be under no obligation to reserve  Shares to satisfy the
Options granted pursuant to this Agreement. The grant of Options to the Optionee
hereunder shall not be construed to constitute the  establishment  of a trust of
such  Shares and no  particular  Shares  shall be  identified  as  optioned  and
reserved for the Optionee  hereunder.  The  Corporation  shall be deemed to have
complied  with the  terms of this  Agreement  if,  at the time of  issuance  and
delivery  of  the  Shares  pursuant  to  the  exercise  of an  option,  it has a
sufficient  number of Shares  authorized  and unissued (or held in its treasury)
for purposes of this  Agreement,  irrespective of the date when such Shares were
authorized.

13. DEFINITIONS.

Except as otherwise  defined in this  Agreement,  the following terms shall have
the following meanings:

     (a) "CODE" means the US Internal Revenue Code of 1986 as amended to date.

     (b) "BOARD" means the Board of Directors of the Corporation.

     (c)  "EMPLOYEE"  means any person  treated  as an  Employee  (including  an
officer or  director  of the  Corporation)  who is treated as an Employee on the
records of the  Corporation and is deemed to be an Employee at Common Law and as
interpreted by the U.S. Internal Revenue Service under the Code.

     (d) "FAIR MARKET VALUE" means as of any date the value of the Shares of the
Corporation as determined by the Board in its discretion,  or by the Corporation
in its discretion, subject to the following:

                           If, on such date, the Shares are listed on a national
                   or regional  securities  exchange or quoted in a inter-dealer
                   quotation market system,  the Fair Market Value of each Share
                   shall be the  closing  price of a Share (or the mean  between
                   the closing bid and asked price of a Share if the Share is so
                   quoted instead) as quoted on the NASDAQ National Market,  the
                   NASDAQ  Small Cap Market or such other  national  or regional
                   securities  exchange or inter-dealer  quotation market system
                   constituting the primary market for the Shares as reported in
                   the  Wall  Street  Journal  or  such  other  sources  as  the
                   Corporation  deems  reliable.  If the relevant  date does not
                   fall on a date on which the Shares  have been  traded on such
                   securities exchange or been quoted in such market system, the
                   date on which Fair Market Value shall be established shall be
                   the last date on which the Shares were so traded prior to the
                   relevant  date,  or such other  appropriate  date as shall be
                   determined  by the Board in its sole  discretion;  and, if on
                   such date, there is no public market for the Shares, the Fair
                   Market Value of a Share shall be as  determined  by the Board
                   in good faith without regard to any restriction  other than a
                   restriction which, by its terms, will never lapse.

     (e)  "NON-STATUTORY  STOCK OPTION" means a stock option not intended to be,
or which does not qualify,  as an Incentive  Stock Option  within the meaning of
Section 422 ET SEQ. of the Code.

     (f) "SUBSIDIARY" or "SUBSIDIARIES" means any corporation or entity in which
the Corporation  owns  beneficially  more than 50% of the voting equity interest
therein.

14. NOTICES.

All notices under this  Agreement  and the Plan shall be in writing,  and, if to
the Corporation,  shall be mailed to its principal office at 5 Hamilton Landing,
Suite 100, Novato,  California 94949, Attn.: Secretary,  and if to the Optionee,
shall be delivered personally or mailed to the Optionee at his address appearing
in the payroll  records of the  Corporation  or its Subsidiary as of the date of
such  notice.  The  address  of any party may be  changed at any time by written
notice to the other party given in accordance  with this Section 14. All notices
and other written communications required hereunder shall be deemed to have been
given when personally  delivered or mailed,  postage  prepaid,  by registered or
certified mail

                                      -6-

<PAGE>



15. MISCELLANEOUS.

     (a) TERMINATION. Anything contained herein to the contrary notwithstanding,
in the event that the  shareholders of the Corporation do not ratify and approve
the grant of the  Options to the  Optionee  pursuant  to this  Agreement  within
twelve  (12)  months  after the  Effective  Date at the next  Annual or  Special
Meeting of Shareholders of the Corporation,  unless shareholders approval of the
grant of the  Options to Optionee  under this  Agreement  is no longer  required
under the New York Business  Corporation Law or any other applicable New York or
California  statute,  law or  regulation  and/or by the record  date of any such
Shareholders Meeting,  subject,  however, to the provisions of Section 162(m) of
the Code, then this Agreement and the Options granted hereby shall automatically
terminate,  be canceled in their  entirety  and the Optionee  shall  forfeit all
rights with  respect  thereto or  otherwise  under this  Agreement  and be of no
further force of effect.

     (b) ACKNOWLEDGMENT.  The Options may not be exercised, to the extent vested
and  exercisable,  until the  Optionee  dates,  signs and returns a copy of this
Agreement to the Corporation.

     (c) NO RIGHT AS  SHAREHOLDER.  Neither the Optionee nor his successor shall
have any rights as a shareholder of the  Corporation  with respect to any Shares
subject  to the  Options  before  the  date of  issuance  to the  Optionee  of a
certificate or certificates  for such Shares in the name of the Optionee or such
successor.

     (d) NO RIGHT TO CONTINUED EMPLOYMENT. The Options shall not confer upon the
Optionee any express or implied right with respect to  continuance of employment
by the Corporation or any Subsidiary thereof, for any specific or minimum period
of time under the  Employment  Agreement  or  otherwise,  nor shall the grant or
existence of such Options interfere in any way with the right of the Corporation
or such Subsidiary to terminate such employment at any time.

     (e)   COUNTERPARTS.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  each of which shall be deemed to be an original  and all of which
together shall constitute but one and the same instrument  provided that each of
the parties hereto executes such counterpart.

     (f) CHOICE OF LAW. This Agreement and the respective rights and obligations
of the Optionee and the  Corporation  hereunder shall be governed by the laws of
the State of New York with respect to agreements  to be performed  wholly in the
State of New York and without  giving effect to the  conflicts of law,  statutes
and  doctrines  of New York  (except for Section  5-1401 of the New York General
Obligations Law) or of any other jurisdiction.

                                  * * * * * * *

                                      -7-

<PAGE>


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

                                          SPATIALIGHT, INC.


                                          By:________________________________
                                          Name: Robert A. Olins
                                          Title: Acting Chief Executive Officer

                                          OPTIONEE


                                          By:________________________________
                                          Name: Theodore H. Banzhaf





                                      -8-