EXHIBIT 10.1

                               PURCHASE AGREEMENT

      This purchase agreement (this "Agreement") is dated as of August 5, 2005,
by and between the purchasers set forth on the signature page hereto
(collectively, the "Purchaser") and SpatiaLight, Inc., a New York Corporation
(the "Company"), whereby the parties agree as follows:

1.    Offering.

      a)    The Company has authorized the sale and issuance of up 2,000,000 of
            its Common Shares (the "Shares"), to one or more purchasers (the
            "Offering"). The Offering has been registered with the Securities
            and Exchange Commission ("SEC") under the Securities Act of 1933, as
            amended (the "Securities Act"), pursuant to the Company's
            Registration Statement on Form S-3 (No. 333-122392), which was
            declared effective by the SEC on July 29, 2005 and has remained
            effective since such date and is effective on the date hereof (the
            "Registration Statement").

      b)    The Company and the Purchaser agree that, at the Closing (as defined
            in Section 2), the Purchaser will purchase from the Company and the
            Company will issue and sell to the Purchaser the number of Shares
            set forth on the signature page of this Agreement for a purchase
            price set forth on the signature page of this Agreement (the
            "Purchase Price") pursuant to the terms and conditions set forth
            herein. Certificates representing the Shares purchased by the
            Purchaser may not be delivered to the Purchaser; instead such
            Shares, if not physically delivered, will be credited to the
            Purchaser using customary book-entry procedures.

      c)    The Company may enter into agreements with certain other purchasers
            (the "Other Purchasers"), with terms and conditions, including but
            not limited to purchase price and quantity of Shares, which may be
            different from those set forth herein. (The Purchaser and the Other
            Purchasers are hereinafter sometimes collectively referred to as the
            "Purchasers" and this Agreement and the stock purchase agreements
            executed by the Other Purchasers are hereinafter sometimes
            collectively referred to as the "Purchase Agreements"). The Company
            may accept or reject Purchase Agreements in its sole discretion.

      d)    Pursuant to Rule 424(b)(2) of the Securities Act, the Company agrees
            to file with SEC a prospectus supplement in a form similar to
            Exhibit A hereto regarding the sale of the Shares to Purchaser (the
            "Prospectus Supplement") after consummation of the sale of the
            Shares contemplated by this Agreement.

      e)    From the date hereof until 30 days following the date hereof, the
            Purchaser may, in its sole determination, elect to purchase,
            severally and not jointly with the other Purchasers, up to an
            additional aggregate total of 225,000 registered shares of Common
            Stock off the Registration Statement (such securities, the
            "Greenshoe Securities" and such right, a "Greenshoe Right") in
            proportion to the Shares initially purchased by the Purchasers
            pursuant to this Agreement. Any Greenshoe Right exercised by a
            Purchaser shall close within 2 business days of a duly delivered
            exercise notice by the exercising party. Any additional investment
            in the Greenshoe Securities shall be at a purchase price of $5.50
            per Share and on other terms and conditions materially identical to
            the purchase and sale of the Shares set forth on the signature page
            hereto, mutatis mutandis. In order to effectuate a purchase and sale
            of the Greenshoe Securities, the Company and the Purchasers shall
            enter into a purchase agreement materially identical to this
            Agreement; provided, however, that there shall not be any additional
            Greenshoe Rights.


                                       1
<PAGE>

2.    Delivery of the Shares at Closing

      a)    The completion of the purchase and sale of the Shares (the
            "Closing") shall occur on August 5, 2005 (the "Closing Date"). At
            the Closing, the Purchaser shall deliver to the Company a wire
            transfer of funds in the full amount of the purchase price for the
            Shares being purchased hereunder as set forth on the signature page
            hereto, and the Company shall deliver to the Purchaser, at the sole
            discretion of the Purchaser, physically or using customary
            book-entry procedures (such as the Depository Trust Company's
            Deposit Withdrawal Agent Commission system), the number of Shares,
            set forth on the signature page hereto.

      b)    The Company's obligation to issue and sell the Shares to the
            Purchaser shall be conditioned upon the accuracy of the
            representations and warranties made by the Purchaser and the
            fulfillment of those undertakings of the Purchaser to be fulfilled
            prior to the Closing.

3.    Company Representations and Warranties

      a)    The Company hereby represents and warrants that: (a) it has full
            rights, power and authority to enter into this Agreement and to
            perform all of its obligations hereunder; (b) this Agreement has
            been duly authorized and executed by and constitutes a valid and
            binding agreement of the Company enforceable in accordance with its
            terms, except as enforceability may be limited by applicable
            bankruptcy, insolvency, reorganization, moratorium or similar laws
            affecting creditors' and contracting parties' rights generally and
            except as enforceability may be subject to general principles of
            equity (regardless of whether such enforceability is considered in a
            proceeding in equity or at law); (c) the execution and delivery of
            this Agreement and the consummation of the transactions contemplated
            hereby do not conflict with or result in a material breach of (i)
            the Company's Amended and Restated Certificate of Incorporation or
            by-laws, as amended, or (ii) any agreement to which the Company is a
            party or by which any of its property or assets is bound; and (d)
            upon receipt of the Purchase Price, the Shares will be duly and
            validly issued, fully paid and non-assessable, and the Purchaser
            will be entitled to all rights accorded to a holder of the Company's
            Common Shares.

      b)    The Registration Statement has been declared effective by the SEC
            and to the best of the Company's knowledge is currently effective
            for the sale of the Shares to the Purchaser.

      c)    The Company represents that it shall promptly secure listing of all
            the Shares sold under this Agreement upon the Nasdaq SmallCap
            Market.

4.    Purchaser Representations and Warranties

      a)    The Purchaser represents and warrants that (a) it has had no
            position, office or other material relationship within the past
            three years with the Company or person known to it to be affiliates
            of the Company, and (b) it is not a registered broker-dealer under
            Section 15 of the Securities Exchange Act of 1934, as amended, as of
            the date hereof.


                                       2
<PAGE>

      b)    The Purchaser hereby confirms receipt of the base prospectus
            included in the Registration Statement and the Prospectus Supplement
            (together, the "Prospectus"). The Purchaser confirms that it had
            full access to the Prospectus and was fully able to read, review,
            download and print it.

      c)    The Purchaser further represents and warrants to, and covenants
            with, the Company that (i) the Purchaser has full right, power,
            authority and capacity to enter into this Agreement and to
            consummate the transactions contemplated hereby and has taken all
            necessary action to authorize the execution, delivery and
            performance of this Agreement, and (ii) this Purchase Agreement
            constitutes a valid and binding obligation of the Purchaser
            enforceable against the Purchaser in accordance with its terms,
            except as enforceability may be limited by applicable bankruptcy,
            insolvency, reorganization, moratorium or similar laws affecting
            creditors' and contracting parties' rights generally and except as
            enforceability may be subject to general principles of equity
            (regardless of whether such enforceability is considered in a
            proceeding in equity or at law).

      d)    The Purchaser understands that nothing in the Prospectus, this
            Agreement or any other materials presented to the Purchaser in
            connection with the purchase and sale of the Shares constitutes
            legal, tax or investment advice. The Purchaser has consulted such
            legal, tax and investment advisors as it, in its sole discretion,
            has deemed necessary or appropriate in connection with its purchase
            of Shares.

5.    Notice

      All communications hereunder, except as may be otherwise specifically
provided herein, shall be in writing and shall be mailed, hand delivered, sent
by a recognized overnight courier service such as Federal Express, or sent via
facsimile and confirmed by letter, to the party to whom it is addressed at the
following addresses or such other address as such party may advise the other in
writing:

      To the Company: as set forth on the signature page hereto.

      To the Purchaser: as set forth on the signature page hereto.

      All notices hereunder shall be effective upon receipt by the party to
      which it is addressed.

6.    Jurisdiction

      This Agreement shall be governed by ad interpreted in accordance with the
laws of the State of New York, as if fully performed in New York, without giving
effect to the principles of conflicts of law thereof. Each of the parties
consents to the exclusive jurisdiction of the United States district court of
the Southern District of New York in the state courts of the State of New York
sitting in the City of New York in connection with any dispute arising under
this Agreement, and hereby waives, to the maximum extent permitted by law, any
objection based on forum non conveniens. To the extent determined by such court,
the prevailing party shall reimburse the other party for any reasonable costs,
legal fees and disbursements incurred in enforcement or protection of any of its
rights under this Agreement.


                                       3
<PAGE>

7.    Indemnification.

      (a)   The Company shall, notwithstanding any termination of this
            Agreement, indemnify and hold harmless the Purchaser, the officers,
            directors, agents, brokers (including brokers who offer and sell
            Shares as principal as a result of a pledge or any failure to
            perform under a margin call of Common Shares), investment advisors
            and employees of each of them, each person or entity who controls
            the Purchaser (within the meaning of Section 15 of the Securities
            Act or Section 20 of the Exchange Act) and the officers, directors,
            agents and employees of each such controlling person or entity, to
            the fullest extent permitted by applicable law, from and against any
            and all losses, claims, damages, liabilities, costs (including,
            without limitation, reasonable attorneys' fees) and expenses
            (collectively, "Losses"), as incurred, arising out of or relating to
            any untrue or alleged untrue statement of a material fact contained
            in the Registration Statement, any prospectus therein or any form of
            prospectus or in any amendment or supplement thereto or in any
            preliminary prospectus, or arising out of or relating to any
            omission or alleged omission of a material fact required to be
            stated therein or necessary to make the statements therein (in the
            case of any prospectus or form of prospectus or supplement thereto,
            in light of the circumstances under which they were made) not
            misleading. The Company shall notify the Holders promptly of the
            institution, threat or assertion of any Proceeding arising from or
            in connection with the transactions contemplated by this Agreement
            of which the Company is aware.

      (b)   If any proceeding shall be brought or asserted against any person or
            entity entitled to indemnity hereunder (an "Indemnified Party"),
            such Indemnified Party shall promptly notify the Company in writing,
            and the Company shall have the right to assume the defense thereof,
            including the employment of counsel reasonably satisfactory to the
            Indemnified Party and the payment of all fees and expenses incurred
            in connection with defense thereof; provided, that the failure of
            any Indemnified Party to give such notice shall not relieve the
            Company of its obligations or liabilities pursuant to this
            Agreement, except (and only) to the extent that it shall be finally
            determined by a court of competent jurisdiction (which determination
            is not subject to appeal or further review) that such failure shall
            have prejudiced the Company. An Indemnified Party shall have the
            right to employ separate counsel in any such proceeding and to
            participate in the defense thereof, but the fees and expenses of
            such counsel shall be at the expense of such Indemnified Party or
            parties unless: (1) the Company has agreed in writing to pay such
            fees and expenses; (2) the Company shall have failed promptly to
            assume the defense of such Proceeding and to employ counsel
            reasonably satisfactory to such Indemnified Party in any such
            proceeding; or (3) the named parties to any such proceeding
            (including any impleaded parties) include both such Indemnified
            Party and the Company, and such Indemnified Party shall reasonably
            believe that a material conflict of interest is likely to exist if
            the same counsel were to represent such Indemnified Party and the
            Company (in which case, if such Indemnified Party notifies the
            Company in writing that it elects to employ separate counsel at the
            expense of the Company, the Company shall not have the right to
            assume the defense thereof and the reasonable fees and expenses of
            one separate counsel shall be at the expense of the Company). The
            Company shall not be liable for any settlement of any such
            proceeding effected without its written consent, which consent shall
            not be unreasonably withheld. The Company shall not, without the
            prior written consent of the Indemnified Party, effect any
            settlement of any pending proceeding in respect of which any
            Indemnified Party is a party, unless such settlement includes an
            unconditional release of such Indemnified Party from all liability
            on claims that are the subject matter of such proceeding.


                                       4
<PAGE>

            Subject to the terms of this Agreement, all reasonable fees and
            expenses of the Indemnified Party (including reasonable fees and
            expenses to the extent incurred in connection with investigating or
            preparing to defend such proceeding in a manner not inconsistent
            with this Section) shall be paid to the Indemnified Party, as
            incurred, within ten business days of written notice thereof to the
            Company; provided, that the Indemnified Party shall promptly
            reimburse the Company for that portion of such fees and expenses
            applicable to such actions for which such Indemnified Party is not
            entitled to indemnification hereunder, determined based upon the
            relative faults of the parties.

      (c)   If the indemnification under Section 7(a) is unavailable to an
            Indemnified Party or insufficient to hold an Indemnified Party
            harmless for any Losses, then the Company shall contribute to the
            amount paid or payable by such Indemnified Party, in such proportion
            as is appropriate to reflect the relative fault of the Company and
            Indemnified Party in connection with the actions, statements or
            omissions that resulted in such Losses as well as any other relevant
            equitable considerations. The amount paid or payable by a party as a
            result of any Losses shall be deemed to include, subject to the
            limitations set forth in this Agreement, any reasonable attorneys'
            or other reasonable fees or expenses incurred by such party in
            connection with any proceeding to the extent such party would have
            been indemnified for such fees or expenses if the indemnification
            provided for in this Section was available to such party in
            accordance with its terms.

      (d)   The indemnity and contribution agreements contained in this Section
            7 are in addition to any liability that the Company may have to the
            Indemnified Parties.

8.    Miscellaneous

      a)    This Agreement (and the Prospectus and any prospectus supplement)
            constitutes the entire understanding and agreement between the
            parties with respect to its subject matter and there are no
            agreements or understandings with respect to the subject matter
            hereof which are not contained in this Agreement.

      b)    This Agreement may be executed in any number of counterparts, all of
            which taken together shall constitute one and the same instrument
            and shall become effective when counterparts have been signed by
            each party and delivered to the other parties hereto, it being
            understood that all parties need not sign the same counterpart.
            Execution may be made by delivery by facsimile.

      c)    This Agreement may not be modified or amended except pursuant to an
            instrument in writing signed by the Company and the Purchaser.

      d)    The headings of the various sections of this Agreement have been
            inserted for convenience or reference only and shall not be deemed
            to be part of this Agreement.

      e)    In case any provision contained in this Agreement should be invalid,
            illegal or unenforceable in any respect, the validity, legality and
            enforceability of the remaining provisions contained herein shall
            not in any way be affected or impaired thereby.

                              *********************


                                       5
<PAGE>

      If the foregoing correctly sets forth our agreement, please confirm this
by signing and returning to us the duplicate copy of this letter.

                                 AGREED AND ACCEPTED:

                                 SPATIALIGHT, INC.


                                 By:  /s/ Robert A. Olins
                                      ------------------------------------------
                                      Name:  Robert A. Olins
                                      Title: Chief Executive Officer

                                 Address for Notice:
                                 5 Hamilton Landing, Suite 100
                                 Novato, CA 94949

                                 Wire Instructions: See EXHIBIT B

                                 AGREED AND ACCEPTED:

                                 PURCHASERS:

                                 Portside Growth and Opportunity Fund

                                 By:  /s/ Jeff Smith
                                      ------------------------------------------
                                      Name:  Jeff Smith
                                      Title: Authorized Signatory

                                 Address for Notice:

                                 Portside Growth and Opportunity Fund
                                 c/o Ramius Capital Group LLC
                                 666 Third Avenue, 26th Floor
                                 New York, NY 10017

                                 Number of Shares: 170,000
                                 Purchase Price per Share: $5.40
                                 Aggregate Purchase Price: $918,000.00
                                 Tax ID No: XX-XXXXXXX
                                 Name in which book-entry should be made
                                 (if different):________________________________


                                       6
<PAGE>

                                 SMITHFIELD FIDUCIARY LLC

                                 By:  /s/ Adam J. Chill
                                      ------------------------------------------
                                      Name:  Adam J. Chill
                                      Title: Authorized Signatory

                                 Address for Notice:

                                 c/o Highbridge Capital Management LLC
                                 9 West 57th Street, 27th Floor
                                 New York, NY 10019

                                 Number of Shares: 170,000
                                 Purchase Price per Share: $5.40
                                 Aggregate Purchase Price: $918,000
                                 Tax ID No: N/A
                                 Name in which book-entry should be made
                                 (if different): Bear, Stearns Securities Corp.
                                                 DTC #: 352
                                                 F/B/O Smithfield Fiduciary LLC
                                                 A/C# XXX-XXXXX-X

                                 Bluegrass Growth Fund, LP

                                 By:  /s/ Brian Shatz
                                      ------------------------------------------
                                      Name:  Brian Shatz
                                      Title: Managing Member

                                 Address for Notice:

                                 120 E 42nd Street, Suite 2606
                                 New York, NY 10168
                                 Number of Shares: 100,000
                                 Purchase Price per Share: $5.40
                                 Aggregate Purchase Price: $540,000
                                 Tax ID No: XX-XXXXXXX
                                 Name in which book-entry should be made
                                 (if different): Citigroup
                                                 DTC #: 418
                                                 Account #: XXX-XXXXX


                                       7
<PAGE>

                                 Bluegrass Growth Fund, Ltd.

                                 By:  /s/ Brian Shatz
                                      ------------------------------------------
                                      Name:  Brian Shatz
                                      Title: Director

                                 Address for Notice:

                                 120 E 42nd Street, Suite 2606
                                 New York, NY 10168
                                 Number of Shares: 60,000
                                 Purchase Price per Share: $5.40
                                 Aggregate Purchase Price: $324,000
                                 Tax ID No: N/A
                                 Name in which book-entry should be made
                                 (if different): Citigroup
                                                 DTC #: 418
                                                 Account #: XXX-XXXXX


                                       8