Exhibit 10.16

                      EXTENSION AND MODIFICATION AGREEMENT

         This  Extension  and  Modification  Agreement  dated as of November 30,
2004,  is  entered  into by and  among  Argyle  Capital  Management  Corporation
("Holder") and SpatiaLight, Inc. a New York Corporation ("Maker").

Recitals

      A.    Maker and Holder have entered into that certain Secured Promissory
            Note dated March 18, 1998 pursuant to which Holder agreed to make
            certain advances of money and to extend financial accommodations to
            Maker in the amounts and manner set forth in the Notes.

      B.    On September 15, 1998, the Maker and the Holder entered into an
            Extension and Modification Agreement pursuant to which the interest
            rate on all of the Notes was reduced to six (6%) percent per annum
            and the maturity date of the Notes was extended to the later of
            December 31, 1998, or the maturity date of the Maker's Convertible
            Secured Notes as it may be extended.

      C.    On or about December 1998, Maker and its Senior Lenders extended the
            maturity date on the Maker's Convertible Secured Notes due to the
            Senior Lenders to December 31, 1999.

      D.    On December 1, 1999, Maker and Holder entered into a Registration
            Rights and Extension Agreement ("Amendment") which modified a
            certain letter agreement relating to registration rights dated May
            15, 1998, between Maker and Holder ("Registration Rights Agreement")
            pursuant to which, among other things, the maturity date on Notes
            was extended to June 30, 2001.

      E.    On May 23, 2001, Maker and Holder entered into an Extension and
            Modification Agreement whereas the maturity date of the Notes was
            extended to December 31, 2002.

      F.    On May 23, 2003, Maker and Holder entered into an Extension and
            Modification Agreement whereas the maturity date of the Notes was
            extended to March 31, 2004.

      G.    On December 30, 2003, Maker and Holder entered into an Extension and
            Modification Agreement whereas the maturity date of the Notes was
            extended to June 30, 2005.

      H.    Maker and Holder desire to extend and modify the Notes and the
            Amendment as hereinafter set forth.

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                                    Agreement

            NOW, THEREFORE, in consideration of the foregoing Recitals and for
      other good and valuable consideration, the receipt and adequacy of which
      are hereby acknowledged, and intending to be legally bound, the parties
      hereto represent and warrant and agree, as follows:

            1. EXTENSION OF MATURITY DATE. The maturity date of the Argyle Notes
      is hereby extended to December 31, 2008.

            2 MODIFICATION OF REGISTRATION RIGHTS AGREEMENT. Section 13 of the
      Registration Rights Agreement as modified by the Amendment is hereby
      modified by deleting the words "June 30, 2005", appearing at the end of
      the first sentence and inserting in its place the words "December 31,
      2008".

            3. FULL FORCE AND EFFECT. Except to the extent expressly provided in
      this Agreement, the terms and conditions of the Notes and Registration
      Rights Agreement as modified by the Amendment shall remain in full force
      and effect.

            4. COUNTERPARTS, EFFECTIVENESS. This agreement may be executed in
      counterparts, each of which when so executed shall be deemed an original,
      but all such counterparts together shall constitute but one and the same
      instrument. This Agreement shall be deemed effective upon the execution of
      a counterpart hereof by each of Maker and Holder.

         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
  executed by their duly authorized  officers as of the day and year first above
  written.

  Maker                              SpatiaLight, Inc.

                                     By:      /S/ LAWRENCE J. MATTESON
                                         ---------------------------------------
                                              Lawrence J. Matteson, Director

                                     By:      /S/ CLAUDE PIAGET
                                         ---------------------------------------
                                              Claude Piaget, Director

                                     By:      /S/ ROBERT C. MUNRO
                                         ---------------------------------------
                                              Robert C. Munro, Director

  Holder                             Argyle Capital Management Corporation

                                     By:      /S/ ROBERT A. OLINS
                                         ---------------------------------------
                                              Robert A. Olins
                                              President