<PAGE>

                                                                    Exhibit 10.3

                              EMPLOYMENT AGREEMENT


         EMPLOYMENT  AGREEMENT,  dated as of July 7, 2003,  between  Theodore H.
Banzhaf,  an individual  residing at 1801 Gough Street #403, San  Francisco,  CA
94109  ("EMPLOYEE"),  and  SPATIALIGHT,  INC.,  a New  York  corporation,  whose
principal place of business is located at 5 Hamilton Landing, Suite 100, Novato,
California 94949 (the "COMPANY").

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS,  Employee  has  represented  that  Employee  has  considerable
experience and expertise in areas of investor corporate  development,  including
the structuring of management, seeking and implementing corporate strategies and
managing investor  relations,  which skills may be used to enhance the long term
objectives  of the  Company  in  developing  a  strategy  for the  growth of the
business and increasing the revenues and net income of the Company;

         WHEREAS, Employee shall render services to the Company in the corporate
development field and provide other executive services to the Company; and

         WHEREAS,  the Company  desires to confirm the employment of Employee as
its  Executive  Vice  President  of  Strategic  Planning,  to serve  and  assist
management  of the Company in the areas  described  in Section 1 hereof,  on the
terms and  conditions  hereinafter  set  forth,  and  Employee  desires to be so
employed upon such terms and conditions.

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
covenants and conditions  hereinafter  set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

         1.  EMPLOYMENT;  DUTIES.  The Company hereby confirms its employment of
Employee,  and Employee  hereby  confirms his acceptance of  employment,  as the
Executive Vice President of Strategic Planning of the Company,  on the terms and
subject to the conditions  hereinafter  set forth.  In such  capacity,  Employee
shall  continue,  subject to the ultimate  authority of the  Company's  Board of
Directors  (the "BOARD") and his  obligation  to report to the  Company's  Chief
Executive  Officer or such other principal  officers of the Company as the Board
may designate, to perform duties in the following areas:

                  (a) Employee shall review and undertake a study of the current
         business  operations,  financial  condition,  management  and  business
         prospects  of the  Company so as to enable  him to render the  services
         called for hereby;

                  (b)  Employee  shall  assist the Board in locating  and hiring
         qualified   senior   employees  to  administer  the  Company's   future
         operations;

                  (c) Employee  shall assist the  management of the Company with
         the development and  implementation of a strategy for the growth of its
         business which is focused on increasing  shareholder  value through the
         increase in the Company's revenues and net income; and

                  (d) Employee  will seek out,  examine and propose to the Board
         suitable  strategic  alliances for the Company involving joint ventures
         or other suitable  arrangements  with other suitable  business partners
         and/or appropriate contractual arrangements with manufacturing entities
         and other parties;

                  (e) Employee shall render services to enhance the value of the
         Company and its  outstanding  equity  securities for the benefit of its
         shareholders by:

                                       1

<PAGE>

         (i)      Assisting the Board in improving and expanding  communications
                  to and with shareholders and  representatives of the financial
                  community; and

                           (ii) Using  Employee's  best  efforts to develop  the
                  interest of potential  investment in the Common  Shares,  $.01
                  par value per share (the "COMMON  SHARES") or other securities
                  of the Company by institutional investors.

                  (f) In rendering all of the services that are described in the
         foregoing  provisions  of this Section 1,  Employee  shall at all times
         comply with all legal  requirements,  including all relevant disclosure
         and other  requirements  under  federal and state  securities  laws and
         regulations.

                  (g)  Notwithstanding  any other  provision of this  Agreement,
         Employee  shall not have or  represent or hold himself out to any third
         party as having the express or implied power or authority,  beyond that
         which shall be expressly  conferred upon him by the Board,  to bind the
         Company  or any of  its  Affiliates  (as  hereinafter  defined)  to any
         agreement, commitments or obligations.

2. TERM; TERMINATION.

                  (a) Employee's  employment  pursuant to this  Agreement  shall
         become  effective as of July 7, 2003 (the  "EFFECTIVE  DATE") and shall
         continue,  unless earlier terminated  pursuant to any of the provisions
         of section 2 (b) hereof through the second anniversary of the Effective
         Date  (the  "EMPLOYMENT  TERM")  and  this  Agreement  shall  terminate
         automatically,  without further act of the parties,  on the last day of
         the Employment Term;  PROVIDED,  HOWEVER,  that the Company may, in its
         sole  discretion,  terminate  this  Agreement  at any time  during  the
         Employment  Term,  for any reason except for  termination  for Cause as
         defined in 2(b)(iii)  hereof) upon sixty (60) days prior written notice
         from the Company to Employee, except that the Company may not terminate
         this Agreement without Cause before June 7, 2004.

                  (b) In addition to the  expiration of the  Employment  Term as
         hereinabove  provided,  this Agreement and Employee's employment by the
         Company  shall  terminate   sooner  on  the  Date  of  Termination  (as
         hereinafter defined) by reason of the following events:

                    (i) automatically upon Employee's death;

                    (ii) at the  Company's  option if, as a result of Employee's
               incapacity  due to  physical or mental  illness,  he is unable to
               perform the duties of his  employment  hereunder for a continuous
               period of thirty  (30)  days,  after  giving  effect to  vacation
               periods or an  aggregate  of sixty  (60) days in any one  hundred
               eighty  (180) day period  (each  such  period  being  hereinafter
               referred to as a "DISABILITY PERIOD");

                    (iii)  at the  Company's  option,  at any  time  for  Cause.
               "CAUSE" shall mean:

                        (1)         theft,  dishonesty,  or falsification of any
                                    employment or Company records;

                        (2)         conviction  of a felony or any act involving
                                    moral turpitude;

                        (3)         consistent poor  performance,  as determined
                                    in the sole discretion of the Board,  which,
                                    if not cured,  again in the sole  discretion
                                    of  the  Board,   within  thirty  (30)  days
                                    following  written notice of such consistent
                                    poor performance from the Company;

                        (4)         improper  disclosure of Company  Information
                                    (as defined in Section 8 hereof);


                                       2
<PAGE>



                        (5)         any  intentional  act by Employee that has a
                                    material detrimental effect on the Company's
                                    reputation or business, as determined in the
                                    sole discretion of the Board;

                        (6)         any breach of this Agreement,  which breach,
                                    if curable,  is not cured within thirty (30)
                                    days following written notice of such breach
                                    from the Company; and

                        (7)         any   violation  of  Section  1(g)  of  this
                                    Agreement.

                    (iv) as provided in Section  2(a) hereof,  at the  Company's
               option at any time on or after June 7, 2004 without Cause; and

                    (v) upon Employee's voluntary termination of employment.


                  (c) Any termination of this Agreement pursuant to Section 2(b)
         shall be communicated  by a written notice  indicating the provision of
         this  Agreement  upon  which  such  termination  is based (a "NOTICE OF
         TERMINATION").

                  (d)  As  appropriate   under  the   circumstances,   "DATE  OF
         TERMINATION"  shall mean,  as  applicable:  (A) the date of  Employee's
         death;  (B) thirty (30) days after a Notice of  Termination is given to
         Employee,  if Employee's  employment is terminated  pursuant to Section
         2(b)(ii)  above; or (C) the date specified in the Notice of Termination
         if  Employee's  employment  is  terminated  by the Company  pursuant to
         Section 2(b)(iii) or 2(b)(iv) above.

     3.  COMPENSATION.  In  order  to  induce  Employee  to be  employed  as the
Company's Executive Vice President of Strategic Planning:

     (a) The Company shall pay Employee annual compensation  ("SALARY") equal to
US$240,000 during the Employment, subject to any increases in compensation which
the Board, in its sole discretion, may approve and award to Employee. The Salary
shall be payable to Employee in equal semi-monthly or monthly installments of US
Dollars.  All such  compensation  payments  shall be  subject to  deduction  for
federal,  state and local  withholding  taxes and other charges  required  under
federal or state laws or regulations; and

     (b) The Company agrees to grant Employee equity  incentive  compensation in
the form of Stock  Options to purchase an  aggregate of 800,000  Common  Shares,
$.01 par value, of the Company  pursuant to the provisions of a Time Accelerated
Restricted  Stock Award Agreement in the form annexed hereto as EXHIBIT "1" (the
"TARSAP").

4. COMPENSATION UPON TERMINATION AND DURING DISABILITY.

     (a) If Employee's  employment shall be terminated by his death, the Company
shall pay to his estate  Employee's unpaid Salary for the period through the end
of the calendar month in which Employee's death occurs.

     (b) In the event of Employee's  physical or mental disability,  the Company
shall continue to pay Employee his Salary during the Disability  Period.  If the
Company terminates  Employee's  employment  following the Disability Period, the
Company  shall  continue  to pay  Employee  his Salary  for the period  from the
Company's regular payroll through the Date of Termination. In addition, Employee
shall  continue  to  participate  in  the  employee   benefit,   retirement  and
compensation  plans and receive  other  benefits,  including  the Stock  Options
referenced in Section 3(b) hereof through the Date of Termination.




                                        3
<PAGE>


     (c) If Employee's  employment  shall be terminated for Cause by the Company
or shall be  voluntarily  terminated by Employee,  the Company shall continue to
pay Employee his Salary  through the Date of  Termination.  Notwithstanding  the
immediately preceding sentence or any other provision of this Agreement, nothing
set forth herein will  preclude or  adversely  restrict the Company from seeking
full  redress or  reimbursement  for any losses  which it may have  sustained by
reason of those actions of Employee which shall have resulted in his termination
of employment for Cause.


     (d) If Employee's  employment  is  terminated by the Company  without Cause
pursuant to Section 2(b)(iv) hereof,  the Company shall continue to pay Employee
his Salary  for a period  equal to the  lesser of the  remaining  portion of the
Employment Term or ninety (90) days following the Date of Termination.

     (e)  If  Employee  shall   terminate  his   employment   with  the  Company
voluntarily,  the Company shall pay his Salary  through the Date of  Termination
and  Employee  shall  not be  entitled  to any  further  compensation  from  the
Corporation  or to  participate in any benefits made available by the Company to
its employees from and after such Date.

     (f) Unless otherwise agreed by the Company and Employee,  all payments made
to Employee (or his estate,  as applicable)  pursuant to this Section 4, whether
during a Disability  Period or after the Date of  Termination,  shall be made in
the  amounts,  at the times and  subject to the terms and  conditions  otherwise
applicable  to  payments to  Employee  pursuant to Section 3 hereof,  as if such
payments were made to Employee during the Employment Term.

5. BENEFITS; REIMBURSEMENT OF EXPENSES.

     (a) Employee shall be entitled to receive  medical and other health related
benefits  to the same  extent  available  to  other  employees  of the  Company,
provided that such medical and health  benefits  shall only be made available by
the  Company  for  Employee  and not for his  spouse or any other  member of his
family.

     (b) In  addition  to the  compensation  and  benefits  provided to Employee
pursuant to other  provisions  of this  Agreement,  the Company  will  reimburse
Employee in a manner  consistent  with  established  policies of the Company for
reasonable  out-of-pocket  expenses  actually  incurred  or  paid  by his in the
performance  of  his  services  hereunder,   subject  to  presentation  of  such
reasonably detailed expense statements,  receipts,  vouchers or other supporting
information  as the Company may  reasonably  require and subject  further to the
requirement of prior Company approval for expenses  exceeding  US$1,000 proposed
to be expended by Employee for any one or series of related purposes.

     6. OTHER AGREEMENTS.  Employee  represents and warrants to the Company that
Employee is not a party to any  agreement,  written or oral, and is not bound by
the terms of any  written or oral  agreement  to which he is not a party,  which
prohibits him from  performing his duties under this Agreement or of serving the
Company in any other capacity.


     7. INTELLECTUAL PROPERTY AGREEMENT. Employee agrees promptly to disclose in
writing  to the  Company  all  ideas,  programs,  systems,  processes,  business
concepts and developments  (hereinafter referred to collectively as "CONCEPTS"),
whether  or not  protected  by  copyright  or  trademark  laws  of any  relevant
jurisdiction,  which Employee,  while employed hereunder,  conceives,  develops,
acquires or reduces to practice, whether alone or with others and whether during
or after usual working hours, and which are related to the Company's business or
interests,  or  are  used  or  usable  by the  Company,  or  arise  out of or in
connection  with the duties  performed by Employee  hereunder.  Employee  hereby
transfers and assigns to the Company all right, title and interest in and to all
Concepts  including  any and all  domestic  or foreign  patents,  copyrights  or
trademarks resulting therefrom.  On request of the Company,  Employee shall from




                                        4
<PAGE>


time to time during or after the  expiration or termination of his employment by
the Company,  execute such further instruments  (including,  without limitation,
assignments  thereof) and do all such other reasonable and legal acts and things
as may be deemed necessary or desirable by the Company to protect and/or enforce
its rights in respect of the Concepts. All expenses of filing or prosecuting any
copyright or trademark  documents or application or assignment  thereof shall be
borne by the Company,  but Employee shall cooperate in filing and/or prosecuting
any such documents.  Employee shall receive no additional  compensation  for the
performance of his obligations  under this Section 7, except as may be agreed to
by the Company.

8. COVENANT REGARDING CONFIDENTIALITY.

     (a) All information,  data, records, and materials furnished  (irrespective
of the  form of  communication)  by the  Company  to  Employee  and  all  notes,
analyses,  compilations, data, studies, other documents prepared by any officer,
employee, agent or representative  (collectively,  the "Representatives") of the
Company for internal use or  otherwise,  containing or based in whole or in part
on any such furnished  information are  hereinafter  referred to as the "Company
Information".  The term "Company  Information"  does not include  information or
records which (i) was or becomes generally available to the public other than as
a result of  disclosure by the  Company's  Representatives,  (ii) was or becomes
available to Employee on a non-confidential basis prior to its disclosure by the
Representatives  or by the Company or (iii) was or becomes available to Employee
on a  non-confidential  basis from a source  (other than the Company)  which has
represented to Employee that it is not bound by a confidentiality agreement with
the  Company  or  otherwise  prohibited  from  transmitting  any  portion of the
information  by  a  contractual,   legal  or  fiduciary  obligation.   Upon  the
termination  of Employee's  employment  for any reason  whatsoever,  Employee or
Employee's  estate  shall  return  all  Company  Information  to the  Company as
promptly as practicable.

     (b) Employee hereby further  acknowledges his understanding that trading in
any of the securities of the Company while  Employee has Company  Information in
his possession that has not been appropriately  disclosed or disseminated to the
public  constitutes a violation of the federal and/or state  securities laws and
could cause  irreparable  harm to the Company and would  constitute  "Cause" for
terminating  Employee's  employment  hereunder.  Employee  hereby  covenants and
agrees not to engage in any such trading in the securities of the Company.

9. COVENANT NOT TO COMPETE.

     (a) During the Restricted Period (as hereinafter  defined),  Employee shall
not,  directly or indirectly,  engage in any business anywhere in the Restricted
Territory (as hereinafter  defined) either as a stockholder,  officer,  manager,
employee,  agent,  representative,  consultant,  partner, member,  proprietor or
principal  in any other  capacity,  in any  business  engaged  in the  assembly,
distribution  and sale of liquid  crystals  and similar  products  used for high
definition television and such other uses and applications as the Company or any
of its  Affiliates  implements  during the  Restricted  Period and all  business
activities  related  thereto  (the  "RESTRICTED  ACTIVITIES"),  or  directly  or
indirectly,  own any interest in, manage,  operate, join, control, lend money or
render  financial or other assistance to or participate in or be connected with,
as a partner, stockholder, member, proprietor, other principal, employee, agent,
representative, consultant or otherwise, any person that otherwise competes with
respect to the Restricted Activities with the Company or such Affiliates.

     (b) As a separate and independent  covenant,  Employee  further agrees with
the  Company  that,  during  the  Employment  Term and for a period  of one year
thereafter,  Employee  will not,  without  the  express  written  consent of the
Company,  in any way,  directly or indirectly,  for the purpose of conducting or
engaging in the  Restricted  Activities,  solicit,  advise or  otherwise  do, or
attempt to do, business with any customers of the Company or its Affiliates with
whom the Company or its  Affiliates  has had or had any dealings  during the two
(2)  year  period  immediately  preceding  such  solicitation  or  take  away or
interfere,  influence or attempt to interfere with or influence any employee (or
person who was an employee during



                                        5
<PAGE>


the one (1) year period  preceding the date of attempted hiring or recruitment),
customer,  trade,  business or  patronage of the Company or its  Affiliates,  or
induce or attempt  to induce  any of them to leave the employ of the  Company or
its  Affiliates,  or violate  the terms of their  contracts,  or any  employment
arrangements,  with the  Company  or its  Affiliates.  Notwithstanding  anything
herein to the contrary, the ownership by Employee of not more than three percent
(3%) of any class of  outstanding  securities  of an issuer listed on a national
securities  exchange  or  regularly  traded on either of the two NASDAQ  markets
shall not constitute a violation of Sections 9(a) or 9(b) hereof.

     (c) Employee  agrees that remedies at law for any breach by Employee of the
covenants  contained  in Section 8 and this  Section 9 will be  inadequate,  and
that, in the event of a violation of the covenants  therein,  in addition to any
and all legal and equitable  remedies  which may be available to the Company and
its  Affiliates,  such  covenants  may be enforced by an injunction in a suit in
equity,  without the necessity of proving actual damage and without posting bond
or other undertaking  therefor.  If any other provision of Section 8 and/or this
Section 9 shall be deemed by an appropriate  court to be  unenforceable  for any
reason,  then  such  court  shall be  empowered  to  substitute,  to the  extent
enforceable, provisions similar thereto or other provisions so as to provide the
Company and its  Affiliates to the fullest extent  permitted by applicable  law,
the  benefits  intended by Section 8 and this Section 9.  Employee  acknowledges
that the covenants contained in this Section 9 are intended by the parties to be
in addition  to, and not in lieu or in  limitation  of, any other  agreement  or
covenant between Employee and the Company.  Each of the provisions of Sections 8
and 9 hereof shall survive the termination of this Agreement and the termination
of Employee's employment by the Company.


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

     (a) "RESTRICTED  PERIOD" shall mean the Employment Term and for a period of
six  (6)  months  thereafter  whether  Employee's  employment  shall  have  been
terminated by reason of the expiration of this Agreement or otherwise; PROVIDED,
HOWEVER,  that, in the event  Employee's  employment  shall have been terminated
without Cause, the "Restricted Period" shall be for a period of ninety (90) days
after such termination of his employment;  PROVIDED, FURTHER, HOWEVER, that such
term shall mean the Employment Term and for a period of two (2) years thereafter
in the event that Employee's employment shall be terminated for Cause.

     (b) "RESTRICTED  TERRITORY" shall mean any location in the United States of
America,  and in any other  country,  state,  region,  county,  city or locality
thereof  where the  Company or any of its  Affiliates  is  transacting  business
during the Restricted Period or during a period of three (3) years prior thereto
has been transacting  business.  The parties agree and intend that the covenants
contained in Section 9 shall be construed as a series of separate covenants, one
for  each  applicable  region,  county,  city,  state  or  country.  Except  for
geographic  coverage,  each such separate  covenant shall be deemed identical in
terms.

     (c) "AFFILIATES"  shall mean any person directly or indirectly  controlling
the Company,  and other entities  (including  its majority  owned  subsidiaries)
controlled by, or under common control with, the Company.

11. NOTICES.  All notices and other communications given or made pursuant hereto
shall be in  writing  and shall be deemed to have been duly  given or made as of
the date  delivered or refused if  delivered  personally  or by facsimile  (with
confirmation),  or when  delivered  or  refused  if mailed by U.S.  first  class
registered or certified mail (postage prepaid,  return receipt requested) to the
parties at the  following  addresses  (or at such other  address  for a party as
shall be  specified  by like  notice,  except  that notice of changes of address
shall be effective upon the date of receipt or refusal):




                                        6
<PAGE>

     If to the Company:

                  SpatiaLight, Inc.
                  Five Hamilton Landing, Suite 100
                  Novato, California 94949
                  Attn: Robert A. Olins
                  Telecopy No.:   (415) 883-3363
                  Telephone No.: (415) 883-1693

                  With a copy to:

                  Bryan Cave LLP
                  1290 Avenue of the Americas
                  New York, New York 10104
                  Attn: Melvin Katz, Esq.
                  Telecopy No.:   (212) 541-1408
                  Telephone No.: (212) 541-1155

                  If to Employee:

                  Theodore H. Banzhaf
                  1801 Gough Street , #403 San Francisco, CA 94109
                  Telephone No.: 415-775-3244


12. GENERAL.

     (a) The Section headings  contained herein are for reference  purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.

     (b) This  Agreement  together  with EXHIBIT "1" (the TARSAP) sets forth the
entire agreement and understanding of the parties relating to the subject matter
hereof,  and supersedes all prior agreements,  arrangements and  understandings,
written or oral, between the parties.

     (c) This  Agreement and the benefits  hereunder are personal to the Company
and Employee, and are not assignable or transferable, nor may the services to be
performed  hereunder  be  assigned  by  the  Company  to  any  person,  firm  or
corporation;  PROVIDED,  HOWEVER, that this Agreement and the benefits hereunder
may be assigned by the Company to any of its Affiliates  and/or will be assigned
(by  operation  of law) to any  person,  firm or  corporation  acquiring  all or
substantially  all of the assets or more than (50%)  percent of the  outstanding
voting capital stock of the Company or to any corporation into which the Company
may be merged or consolidated,  as long as no such assignment operates to expand
the Restricted Territory without the consent of Employee.

     (d) All  references in this  Agreement to amounts to be paid or benefits to
be provided to or on behalf of Employee are to the gross  amounts  thereof which
are due hereunder.  Except as otherwise  provided herein, the Company shall have
the right to deduct  therefrom  or collect  from  Employee all sums which may be
required to be deducted or withheld under any provision of law,  including,  but
not limited to, social security or similar payments, income tax withholding, any
other deduction required by law and any interest,  penalties or additions to tax
imposed with respect thereto.

     (e) This Agreement may be amended, modified, superseded,  canceled, renewed
or extended,  and the terms or covenants hereof may be waived, only by a written
instrument  executed by both parties hereto,  or in the case of a waiver, by the
party  waiving  compliance.  The failure of either  party at any time to require
performance of any provision  hereof shall in no manner affect the right of such
party at a later



                                        7
<PAGE>



time to enforce the same. No waiver by either party of the breach of any term or
covenant  contained in this Agreement,  whether by conduct or otherwise,  in any
one or more  instances,  shall be deemed to be, or  construed  as, a further  or
continuing  waiver of any such  breach,  or a waiver of the  breach of any other
term or covenant contained in this Agreement.


     (f) This Agreement may be executed in counterparts,  each of which shall be
an original and all of which taken  together  shall  constitute one and the same
instrument.

     (g)  Subject to the  provisions  of Section 9 hereof,  if any term or other
provision of this  Agreement is invalid,  illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and provisions of this
Agreement  shall  nevertheless  remain in full  force and  effect so long as the
economic  or legal  substance  of the  transactions  contemplated  hereby is not
affected in any manner adverse to either party. Upon such determination that any
term or other provision is invalid,  illegal or incapable of being enforced, the
parties  hereto shall  negotiate in good faith to modify this Agreement so as to
effect the  original  intent of the  parties as  closely  as  practicable  in an
acceptable  manner  to the end that the  transactions  contemplated  hereby  are
fulfilled to the extent possible.

     (h) THIS AGREEMENT  SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE  WITH THE
LAWS OF THE STATE OF NEW YORK  APPLICABLE TO CONTRACTS  MADE AND TO BE PERFORMED
ENTIRELY  WITHIN SUCH STATE (WITHOUT  GIVING EFFECT TO ITS STATUTES OR DOCTRINES
OF CONFLICTS OF LAW (EXCEPT  SECTION 5-1401 OF THE NEW YORK GENERAL  OBLIGATIONS
LAW) OF SUCH STATE OR OF ANY OTHER JURISDICTION.

     (i) EACH OF THE  PARTIES  HERETO  HEREBY  IRREVOCABLY  AND  UNCONDITIONALLY
SUBMITS TO THE  EXCLUSIVE  JURISDICTION  OF ANY NEW YORK STATE OR FEDERAL  COURT
SITTING IN THE CITY OF NEW YORK IN ANY ACTION OR  PROCEEDING  ARISING  OUT OF OR
RELATING TO THIS AGREEMENT,  INCLUDING ANY APPEAL AND ANY ACTION FOR ENFORCEMENT
OR  RECOGNITION  OF  ANY  JUDGMENT  RELATING  THERETO,  AND  EACH  PARTY  HEREBY
IRREVOCABLY  AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING  MAY
NOT BE HEARD OR  DETERMINED IN ANY COURT OR BEFORE ANY PANEL OTHER THAN SUCH NEW
YORK STATE OR FEDERAL COURT.

     (j) BY  EXECUTION  AND  DELIVERY  OF THIS  AGREEMENT,  THE  PARTIES  HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE PERSONAL JURISDICTION OF EACH SUCH
COURT,  AND  IRREVOCABLY  AND  UNCONDITIONALLY  WAIVE (i) ANY  OBJECTION  TO THE
PROPRIETY  OF  JURISDICTION,  SERVICE OF PROCESS OR VENUE IN ANY OF SUCH COURTS,
(ii) ANY  RIGHT TO A JURY  TRIAL,  AND  (iii)  ANY  CLAIM  THAT  ANY  ACTION  OR
PROCEEDING  BROUGHT IN ANY OF SUCH  COURTS HAS BEEN  BROUGHT IN AN  INCONVENIENT
FORUM.  EACH OF THE  PARTIES  HERETO  AGREES  THAT A FINAL  JUDGMENT IN ANY SUCH
ACTION  OR  PROCEEDING  SHALL  BE  CONCLUSIVE  AND  MAY  BE  ENFORCED  IN  OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

     (k) EACH OF THE PARTIES HERETO  IRREVOCABLY  CONSENTS TO SERVICE OF PROCESS
IN ANY SUCH ACTION IN THE MANNER PROVIDED FOR THE DELIVERY OF NOTICES IN SECTION
11;  PROVIDED  THAT  NOTHING  HEREIN SHALL AFFECT THE RIGHT OF ANY SUCH PARTY TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.


                                    * * * * *


                                       8
<PAGE>


                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       9

<PAGE>



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


SPATIALIGHT, INC.




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





                                         _____________________________________
                                         Theodore H. Banzhaf
                                         Employee


                                       10

                                       7
<PAGE>


                                   EXHIBIT 1

       Attached hereto is the Time Accelerated Restricted Stock Award Plan





                                       11