SPATIALIGHT, INC.

                  TIME ACCELERATED RESTRICTED STOCK AWARD PLAN

                                   ("TARSAP")

AMENDED AND RESTATED TARSAP (this "Agreement" or the "Option Agreement") made as
of the 1st day of April, 2004, 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 July 7, 2003 (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 Board, by the delivery of Shares (such Shares to be
credited  against the option  price in an amount equal to their  aggregate  Fair


<PAGE>


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 the second (2nd)  anniversary of the Effective
Date as long as the  Optionee is an  Employee  (as  hereinafter  defined) of the
Corporation or any of its Subsidiaries as of such date; provided,  however, that
the dates of vesting and  exercisability  of Options for the  remaining  675,000
Shares shall be accelerated  to such dates upon which the following  performance
tests shall have been satisfied;  provided  further,  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


                                      -2-
<PAGE>

            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 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.


                                      -3-
<PAGE>


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:


      (a) With  respect to 35,000 of the Options  described  in Section  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;  and with respect to
90,000 of the Options  described  in Section  (3)(a) of this  Agreement,  Twelve
Dollars and Fifty Cents ($12.50) per Share.

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

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

      (d) With  respect to the Options  described  in Section  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.


                                      -4-
<PAGE>


      (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.

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.


                                      -5-
<PAGE>


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.

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.


                                      -6-
<PAGE>


      (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

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  Agreement as of
the 1st day of April 2004.

                                          SPATIALIGHT, INC.

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

                                          OPTIONEE

                                          By:________________________________
                                          Name: Theodore H. Banzhaf



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