Document:

WAIVER

    

    This
      Waiver (the "Agreement"), is made and entered into as of February 23, 2007
      by
      and between Spatialight, Inc., a New York corporation (the “Seller”), and Enable
      Growth Partners LP (the “Purchaser”).

    

    WITNESSETH
      

    

    WHEREAS,
      the
      Seller and the Purchaser are parties to a Securities Purchase Agreement dated
      November 29, 2006 (the “Securities Purchase Agreement”); and 

    

    WHEREAS,
      Section
      4.19 of the Securities Purchase Agreement prohibits the issuance of shares
      of
      the Seller’s common stock at a purchase price of less than $1.30 per share until
      the earlier of (i) 90 days from the effective date of the registration statement
      covering the Registrable Securities, as defined in the Securities Purchase
      Agreement or (ii) 12 months from the date of the Securities Purchase Agreement;
      and 

    

    WHEREAS,
      Seller
      desires to sell an aggregate of 3,333,333 shares of its common stock, at a
      purchase price of $1.05 per share (the “February Offering”), and Purchaser
      desires to waive the provisions of Section 4.19 of the Securities Purchase
      Agreement in connection with the February Offering on the terms provided
      herein.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and undertakings contained herein the
      parties hereto agree as follows:

     

    1.
      Waiver
      Shares.
      Subject
      to the terms and conditions of this Agreement, Seller hereby agrees to issue
      to
      Purchaser and Purchaser hereby agrees to waive the provisions of Section 4.19
      of
      the Securities Purchase Agreement in connection with the February Offering
      in
      consideration of the issuance to Purchaser of 170,000 shares of the Seller’s
      common stock (the “Waiver Shares”). On the date hereof the Seller shall transfer
      the Waiver Shares to the Purchaser by crediting the account of the Purchaser’s
      broker (the “Prime Broker”) with the Depository Trust Company through its
      Deposit Withdrawal Agent Commission system in accordance with instructions
      annexed hereto. The issuance of the Waiver Shares to the Purchaser is solely
      in
      connection with the waiver by the Purchase of its rights under Section 4.19
      in
      connection with the February Offering and such waiver does not constitute a
      waiver of (i) the Purchaser’s rights under Section 4.19 in connection with any
      other issuance of the Seller’s securities or (ii) any other rights of Purchaser
      pursuant to the Securities Purchase Agreement. Except as otherwise provided
      herein, the Securities Purchase Agreement is unmodified and in full force and
      effect.

    

    2.
      Conditions.
      This
      Agreement shall not be effective and Seller shall have no obligation to issue
      the Waiver Shares unless Seller shall have received a waiver on the same terms
      as set forth in this Agreement from the holders of at least 1,200,001 shares
      of
      common stock issued pursuant to the Securities Purchase Agreement. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      
        3.
          Representations
          of Seller.
          Seller
          represents and warrants to Purchaser that:

      

    

     

    (a)
      The
      Waiver Shares shall be freely transferable by the Purchaser without restriction.
      The Waiver Shares shall not bear a restricted legend under applicable Federal
      and state securities laws.

    

    (b)
      This
      Agreement has been duly authorized, executed and delivered by Seller and
      constitutes a legal, valid and binding obligation of Seller, enforceable in
      accordance with its terms (subject, as to enforceability, to applicable
      bankruptcy, insolvency, reorganization or other similar laws and to general
      principles of equity).

    

    (c)
      Seller's execution, delivery and performance of this Agreement does not (i)
      violate or conflict with, or constitute a default (or an event that with notice
      or lapse of time or both would become a default) under, result in the creation
      of any lien upon any of the properties or assets of Seller, or give to others
      any rights of termination, amendment, acceleration, or cancellation (with or
      without notice, lapse of time or both) of, any agreement, credit facility,
      debt
      or other instrument (evidencing a debt of Seller or otherwise) or other
      understanding to which the Seller is a party or by which any property or asset
      of Seller is bound or affected, (ii) conflict with the Seller’s certificate of
      incorporation or bylaws, (iii) conflict with, or result in a violation of any
      law, rule or regulation applicable to Seller, or any order or judgment of any
      court or other agency of government applicable to, or affecting
      Seller.

    

    (d)
      The
      Seller has filed all forms, reports and documents (the "SEC Documents") required
      to be filed with the Securities and Exchange Commission (the "Commission")
      pursuant to the Securities At of 1933, as amended (the "Securities Act") or
      the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
      may be, and the rules and regulations of the Commission thereunder during the
      12
      month period ending on the date of this Agreement. Except as corrected by
      subsequent amendment, as of their respective filing dates, the SEC Documents
      complied in all material respects with the requirements of the Securities Act
      or
      the Exchange Act, as the case may be, and the rules and regulations of the
      Commission thereunder applicable to such SEC Documents, and none of the SEC
      Documents contained any untrue statement of a material fact or omitted to state
      a material fact required to stated therein or necessary in order to make
      statements therein, in light of the circumstances under which they were made,
      not misleading. Except as corrected by subsequent amendment, as of their
      respective filing dates, the financial statements of the Seller included in
      the
      SEC Documents complied as to form in all material respects with the applicable
      accounting requirements and the rules and regulations of the Commission
      thereunder and were prepared in accordance with generally accepted accounting
      principles and fairly presented, in all material respects, the financial
      position of the Seller as at the dates thereof and the results of operations
      and
      cash flows of the Seller for the periods then ended (subject, in the case of
      unaudited statements, to normal, recurring audit adjustments not material in
      scope or amount).

    

    (e)
      The
      Waiver Shares are included in the Seller's registration statement filed with
      the
      Commission Registration No. 333-137100 (the "Registration Statement."). The
      Registration Statement covering the issuance of the Waiver Shares was declared
      effective on February 14, 2007 by the Commission and neither the Commission
      nor
      any state regulatory authority has issued, or threatened to issue, any order
      preventing or suspending the use of the Registration Statement or the prospectus
      contained therein or has instituted or, to the Seller’s knowledge, threatened to
      institute any proceedings with respect to such an order. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (f)
      No
      consent, approval, authorization or order of, or filing or registration with,
      any court, regulatory authority or other governmental agency or body or third
      party is required in connection with the transactions contemplated herein.
      

    

    (g)
      The
      Seller hereby confirms that neither it nor, to its knowledge, any other person
      acting on its behalf has provided the Purchaser or its agents or counsel with
      any information that it believes constitutes or might constitute material,
      non-public information.

    

    4. Representations
      of Purchaser.
      Purchaser represents and warrants to Seller that:

    

    (a)
      Purchaser is duly organized, validly existing and in good standing under the
      laws of its jurisdiction of organization and it has full right, power and
      authority to enter into this Agreement and to perform its obligations hereunder
      in accordance with the terms of this Agreement and has taken all necessary
      action to authorize the execution, delivery and performance of this
      Agreement.

    

    (b)
      This
      Agreement has been duly authorized, executed and delivered by it and constitutes
      a legal, valid and binding obligation of it, enforceable in accordance with
      its
      terms (subject, as to enforceability, to applicable bankruptcy, insolvency,
      reorganization or other similar laws and to general principles of
      equity).

    

    (c)
      Purchaser's execution, delivery and performance of this Agreement does not
      violate or conflict with the Purchaser’s governing documents or any law, rule or
      regulation applicable to Purchaser, or any order or judgment of any court or
      other agency of government applicable to or affecting Purchaser.

    

    5.
      Indemnification.

    

    (a)
      Seller shall indemnify and hold harmless Purchaser, the officers, directors,
      agents, investment advisors and employees of Purchaser, each person who controls
      any such person (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, to the fullest extent permitted
      by
      applicable law, from and against any and all losses, claims, damages,
      liabilities, costs (including, without limitation, reasonable costs of
      preparation and reasonable attorneys' fees) and expenses (collectively,
      "Losses"), as incurred, arising out of or relating to (i) any untrue or alleged
      untrue statement of a material fact contained in the Registration Statement,
      any
      prospectus contained therein or in any amendment or supplement thereto 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 supplement thereto, in light of the
      circumstances under which they were made) not misleading or (ii) the inaccuracy
      in any representation or breach of any warranty of Seller contained
      herein.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (b)
      Purchaser shall indemnify and hold harmless the Seller, its directors, officers,
      agents and employees, each person who controls the Seller (within the meaning
      of
      Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
      directors, officers, agents or employees of such controlling person, to the
      fullest extent permitted by applicable law, from and against all Losses, as
      incurred, to the extent arising out of or based solely upon: (i) any untrue
      or
      alleged untrue statement of a material fact contained in the Registration
      Statement, any prospectus or in any amendment or supplement thereto 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 supplement thereto, in light of the circumstances
      under which they were made) not misleading to the extent, but only to the
      extent, that such untrue statement or omission is contained in any information
      so furnished in writing by Purchaser to the Seller specifically for inclusion
      in
      the Registration Statement or such prospectus, amendment or supplement, or
      (ii)
      the inaccuracy in any representation or breach of any warranty of Purchaser
      contained herein.

    

    (c)
      If
      any proceeding shall be brought or asserted against any person entitled to
      indemnity hereunder (an "Indemnified Party"), such Indemnified Party shall
      promptly notify the Seller (for purposes of this Section 5, the Seller shall
      be
      referred to as the "Indemnifying Party") in writing, and the Indemnifying Party
      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
      reasonable fees and expenses incurred in connection with the defense thereof;
      provided, that the failure of any Indemnified Party to give such notice shall
      not relieve the Indemnifying Party 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 proximately
      and materially adversely prejudiced the Indemnifying Party. 

    

    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 unless: (1)
      the Indemnifying Party has agreed in writing to pay such fees and expenses;
      (2)
      the Indemnifying Party 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
      Indemnifying Party, and such Indemnified Party shall have been advised by
      counsel that a conflict of interest is likely to exist if the same counsel
      were
      to represent such Indemnified Party and the Indemnifying Party (in which case,
      if such Indemnified Party notifies the Indemnifying Party in writing that it
      elects to employ separate counsel at the expense of the Indemnifying Party,
      the
      Indemnifying Party shall not have the right to assume the defense thereof and
      the reasonable fees and expenses of one separate counsel, (but no more than
      one
      separate counsel on behalf of all of the Indemnified Parties) shall be at the
      expense of the Indemnifying Party). The Indemnifying Party shall not be liable
      for any settlement of any such proceeding effected without its written consent,
      which consent shall not be unreasonably withheld or delayed. No Indemnifying
      Party shall, 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. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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 (regardless of
      whether it is ultimately determined that an Indemnified Party is not entitled
      to
      indemnification hereunder; provided, that the Indemnifying Party may require
      such Indemnified Party to undertake to reimburse all such fees and expenses
      to
      the extent it is finally judicially determined that such Indemnified Party
      is
      not entitled to indemnification hereunder).

    

    (d)
      If a
      claim for indemnification hereunder is unavailable to an Indemnified Party
      (by
      reason of public policy or otherwise), then each Indemnifying Party, in lieu
      of
      indemnifying such Indemnified Party, shall contribute to the amount paid or
      payable by such Indemnified Party as a result of such Losses, in such proportion
      as is appropriate to reflect the relative fault of the Indemnifying Party 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 relative fault of such Indemnifying Party and Indemnified Party shall be
      determined by reference to, among other things, whether any action in question,
      including any untrue or alleged untrue statement of a material fact or omission
      or alleged omission of a material fact, has been taken or made by, or relates
      to
      information supplied by, such Indemnifying Party or Indemnified Party, and
      the
      parties' relative intent, knowledge, access to information and opportunity
      to
      correct or prevent such action, statement or omission. 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 Section 5(c), 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. 

    

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), the Purchaser and the
      other
      Indemnified Parties shall not be required to contribute, in the aggregate,
      any
      amount in excess of the amount by which the proceeds actually received by such
      person from the sale of the Waiver Shares subject to such dispute exceeds the
      amount of any damages that such person has otherwise been required to pay by
      reason of such untrue or alleged untrue statement or omission or alleged
      omission, except in the case of fraud by such person. 

    

    (e)
      The
      indemnification obligations set forth in (i) Section 5(a)(i) and Section 5(b)(i)
      shall survive the transactions contemplated herein and shall remain operative
      and in full force until the expiration of the applicable statute of limitations
      and (ii) Section 5(a)(ii) and Section 5(b)(ii) shall survive forever. Any claim
      pending on the expiration date of any applicable survival period for which
      notice has been given to the Indemnifying Party in accordance with this
      Agreement may continue to be asserted and indemnified against until finally
      resolved. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    6. Miscellaneous.

    

    (a)
      Expenses. Each of the Purchaser and Seller agrees to pay its own expenses and
      disbursements incident to the performance of its obligations
      hereunder.         

     

    (b)
      Rights Cumulative; Waivers. The rights of each of the parties under this
      Agreement are cumulative. The rights of each of the parties hereunder shall
      not
      be capable of being waived or varied other than by an express waiver or
      variation in writing. Any failure to exercise or any delay in exercising any
      of
      such rights shall not operate as a waiver or variation of that or any other
      such
      right. Any defective or partial exercise of any of such rights shall not
      preclude any other or further exercise of that or any other such right. No
      act
      or course of conduct or negotiation on the part of any party shall in any way
      preclude such party from exercising any such right or constitute a suspension
      or
      any variation of any such right.

    

    (c)
      Benefit; Successors Bound. This Agreement and the terms, covenants, conditions,
      provisions, obligations, undertakings, rights, and benefits hereof, shall be
      binding upon, and shall inure to the benefit of, the undersigned parties and
      their heirs, executors, administrators, representatives, successors, and
      permitted assigns.

    

    (d)
      Entire Agreement. This Agreement contains the entire agreement between the
      parties with respect to the subject matter hereof. There are no promises,
      agreements, conditions, undertakings, understandings, warranties, covenants
      or
      representations, oral or written, express or implied, between them with respect
      to this Agreement or the matters described in this Agreement, except as set
      forth in this Agreement and in the other documentation relating to the
      transactions contemplated by this Agreement. Any such negotiations, promises,
      or
      understandings shall not be used to interpret or constitute this
      Agreement.

    

    (e)
      Amendment. Neither this Agreement nor any term hereof may be amended, waived,
      discharged or terminated other than by a written instrument signed by the party
      against whom enforcement of any such amendment, waiver, discharge or termination
      is sought. 

     

    (f)
      Severability. Each part of this Agreement is intended to be severable. In the
      event that any provision of this Agreement is found by any court or other
      authority of competent jurisdiction to be illegal or unenforceable, such
      provision shall be severed or modified to the extent necessary to render it
      enforceable and as so severed or modified, this Agreement shall continue in
      full
      force and effect. 

    

    (h)
      Notices. All notices, requests, demands or other communications which are
      required or may be given pursuant to the terms of this Agreement shall be in
      writing and shall be deemed to have been duly given: (i) on the date of delivery
      if delivered by hand, (ii) upon the third day after such notice is (a) deposited
      in the United States mail, if mailed by registered or certified mail, postage
      prepaid, return receipt requested or (b) sent by a nationally recognized
      overnight express courier, or (iii) by facsimile upon written confirmation
      (other than the automatic confirmation that is received from the recipient's
      facsimile machine) of receipt by the recipient of such notice: (i) if to
      Purchaser: at the address of the Purchaser on the signature page hereof; and
      (ii) if to Seller: Spatialight, Inc., Five Hamilton Landing, Novato CA 94949,
      Facsimilie No. (415) 883-3363

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (i)
      Governing Law. This Agreement shall be governed by, and construed in accordance
      with, the laws of the State of New York
      without
      giving effect to the principles regarding conflicts of laws. The parties
      irrevocably consent to the exclusive jurisdiction of any State or Federal Court
      located within the County of New York, State of New York, in connection with
      any
      action or proceeding arising out of or relating to this Agreement.

    

    (j)
      Further Assurances. In addition to the instruments and documents to be made,
      executed and delivered pursuant to this Agreement, the parties hereto agree
      to
      make, execute and deliver or cause to be made, executed and delivered, to the
      requesting party such other instruments and to take such other actions as the
      requesting party may reasonably require to carry out the terms of this Agreement
      and the transactions contemplated hereby.

    

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

    

    (l)
      Construction. Unless the context otherwise requires, when used herein, the
      singular shall be deemed to include the plural, the plural shall be deemed
      to
      include each of the singular, and pronouns of one or no gender shall be deemed
      to include the equivalent pronoun of the other or no gender.

    

    (m)
      Execution in Counterparts. This Agreement may be executed in two or more
      counterparts, each of which shall be deemed an original but all of which shall
      constitute one and the same agreement. This Agreement, once executed by a party,
      may be delivered to the other party hereto by telephone line facsimile
      transmission of a copy of this Agreement bearing the signature of the party
      so
      delivering this Agreement. A facsimile transmission of this signed Agreement
      shall be legal and binding on all parties hereto.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

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

     

    
      	 	 	 
	 	SELLER:
	 	 
	 	SPATIALIGHT
              INC. 
	 
 	 
 	 
 
	 	By:  	/s/
              David F.
              Hakala
	 	Name: 	David F. Hakala 
	 	Title: 	Chief Executive Officer 

       

      
        	 	 	 
	 	PURCHASER:
	 	 
	 	Enable Growth Partners
                LP
	 
 	 
 	 
 
	 	By:  	/s/
                Adam
                Epstein
	 	Name: 	Adam Epstein 
	 	Title: 	Principal 

 

      
        	 	 	Address: 	Enable Capital Management 
	 	 	 	One Ferry Building, Suite
                255 
	 	 	 	San Francisco, CA 94111 
	 	 	 	
                Facsimile
                  No. (415) 677-1580SECURITIES
      PURCHASE AGREEMENT

    

    THIS
      SECURITIES PURCHASE AGREEMENT (this
      "Agreement"), is made and entered into as of February 23, 2007 by and between
      Spatialight, Inc., a New York corporation (the “Seller”), and Pierce Diversified
      Strategy Master Fund LLC (the “Purchaser”).

    

    WITNESSETH
      

    

    WHEREAS,
      Seller
      desires to sell an aggregate of 2,190,476 shares (the “Shares”) of its common
      stock, $.01 par value, at a purchase price of $1.05 per share, and Purchaser
      desires to purchase 36,508 of the Shares (the “Purchased Shares”).

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and undertakings contained herein the
      parties hereto agree as follows:

     

    1.
      Purchase
      and Sale of the Purchased Shares.
      Subject
      to the terms and conditions of this Agreement, Seller hereby agrees to sell
      to
      Purchaser and Purchaser hereby agrees to purchase the Purchased Shares, at
      an
      aggregate purchase price equal to $38,333 (the “Purchase Price”) as
      follows:

    

    (a)
      On
      the date hereof the Seller shall transfer the Purchased Shares to the Purchaser
      by crediting the account of the Purchaser’s broker (the “Prime Broker”) with the
      Depository Trust Company through its Deposit Withdrawal Agent Commission system
      in accordance with instructions annexed hereto.

     

    (b)
      Upon
      confirmation by the Prime Broker of the receipt of the Purchased Shares, the
      Purchaser shall authorize McLaughlin & Stern, LLP, as escrow agent (the
“Escrow Agent”), pursuant to the Escrow Agreement in the form annexed hereto, to
      wire the Purchase Price, to the Seller in accordance with the wiring
      instructions set forth on Schedule A, net of the expenses, as set forth in
      a
      separate letter of direction in the form annexed hereto. 

    

    2.
      Conditions.
      This
      Agreement shall not be effective and Seller shall have no obligation to issue
      the Purchased Shares unless Seller shall have received a waiver on terms
      acceptable to it of certain obligations under the Securities Purchase Agreement
      dated November 29, 2006 between the Seller and the persons named therein.

     

    
      
        3.
          Representations
          of Seller.
          Seller
          represents and warrants to Purchaser that:

      

    

     

    (a)
      The
      Purchased Shares shall be freely transferable by the Purchaser without
      restriction. The Purchased Shares shall not bear a restricted legend under
      applicable Federal and state securities laws.

    

    (b)
      This
      Agreement has been duly authorized, executed and delivered by Seller and
      constitutes a legal, valid and binding obligation of Seller, enforceable in
      accordance with its terms (subject, as to enforceability, to applicable
      bankruptcy, insolvency, reorganization or other similar laws and to general
      principles of equity).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (c)
      Seller's execution, delivery and performance of this Agreement does not (i)
      violate or conflict with, or constitute a default (or an event that with notice
      or lapse of time or both would become a default) under, result in the creation
      of any
      lien
      upon
      any of the properties or assets of the
      Seller,
      or give to others any rights of termination, amendment, acceleration or
      cancellation (with or without notice, lapse of time or both) of, any agreement,
      credit facility, debt or other instrument (evidencing a debt of Seller or
      otherwise) or other understanding to which the
      Seller
      is
      a party or by which any property or asset
      of
      the Seller
      is
      bound or affected, (ii) conflict with the Seller’s certificate of incorporation
      or bylaws or (iii) conflict with or result in a violation of any law, rule
      or
      regulation applicable to Seller, or any order or judgment of any court or other
      agency of government applicable to, or affecting Seller.

    

    (d) The
      Seller has filed all forms, reports and documents (the "SEC Documents") required
      to be filed with the Securities and Exchange Commission (the "Commission")
      pursuant to the Securities At of 1933, as amended (the "Securities Act") or
      the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
      may be, and the rules and regulations of the Commission thereunder during the
      12
      month period ending on the date of this Agreement. Except as corrected by
      subsequent amendment, as of their respective filing dates, the SEC Documents
      complied in all material respects with the requirements of the Securities Act
      or
      the Exchange Act, as the case may be, and the rules and regulations of the
      Commission thereunder applicable to such SEC Documents, and none of the SEC
      Documents contained any untrue statement of a material fact or omitted to state
      a material fact required to stated therein or necessary in order to make
      statements therein, in light of the circumstances under which they were made,
      not misleading. Except as corrected by subsequent amendment, as of their
      respective filing dates, the financial statements of the Seller included in
      the
      SEC Documents complied as to form in all material respects with the applicable
      accounting requirements and the rules and regulations of the Commission
      thereunder and were prepared in accordance with generally accepted accounting
      principles and fairly presented, in all material respects, the financial
      position of the Seller as at the dates thereof and the results of operations
      and
      cash flows of the Seller for the periods then ended (subject, in the case of
      unaudited statements, to normal, recurring audit adjustments not material in
      scope or amount).

    

    (e)
      The
      Purchased Shares are included in the Seller's registration statement filed
      with
      the Commission Registration No. 333-137100 (the "Registration Statement.").
      The
      Registration Statement covering the issuance of the Purchased Shares was
      declared effective on February 14, 2007 by the Commission and neither the
      Commission nor any state regulatory authority has issued, or threatened to
      issue, any order preventing or suspending the use of the Registration Statement
      or the prospectus contained therein or has instituted or, to the Seller’s
      knowledge, threatened to institute any proceedings with respect to such an
      order. 

    

    (f)
      No
      consent, approval, authorization or order of, or filing or registration with,
      any court, regulatory authority or other governmental agency or body or third
      party is required in connection with the transactions contemplated
      herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (g)
      The
      Seller hereby confirms that neither it nor, to its knowledge, any other person
      acting on its behalf has provided the Purchaser or its agents or counsel with
      any information that it believes constitutes or might constitute material,
      non-public information.

    

    4.
      Representations
      of Purchaser.
      Purchaser represents and warrants to Seller that:

    

    (a)
      Purchaser is duly organized, validly existing and in good standing under the
      laws of its jurisdiction of organization and it has full right, power and
      authority to enter into this Agreement and to perform its obligations hereunder
      in accordance with the terms of this Agreement and has taken all necessary
      action to authorize the execution, delivery and performance of this
      Agreement.

    

    (b)
      This
      Agreement has been duly authorized, executed and delivered by it and constitutes
      a legal, valid and binding obligation of it, enforceable in accordance with
      its
      terms (subject, as to enforceability, to applicable bankruptcy, insolvency,
      reorganization or other similar laws and to general principles of
      equity).

    

    (c)
      Purchaser's execution, delivery and performance of this Agreement does not
      violate or conflict with the Purchaser’s governing documents or any law, rule or
      regulation applicable to Purchaser, or any order or judgment of any court or
      other agency of government applicable to or affecting Purchaser.

    

    5.
      Indemnification.

    

    (a)
      Seller shall indemnify and hold harmless Purchaser, the officers, directors,
      agents, investment advisors and employees of Purchaser, each person who controls
      any such person (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, to the fullest extent permitted
      by
      applicable law, from and against any and all losses, claims, damages,
      liabilities, costs (including, without limitation, reasonable costs of
      preparation and reasonable attorneys' fees) and expenses (collectively,
      "Losses"), as incurred, arising out of or relating to (i) any untrue or alleged
      untrue statement of a material fact contained in the Registration Statement,
      any
      prospectus contained therein or in any amendment or supplement thereto 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 supplement thereto, in light of the
      circumstances under which they were made) not misleading or (ii) the inaccuracy
      in any representation or breach of any warranty of Seller contained
      herein.

    

    (b)
      Purchaser shall indemnify and hold harmless the Seller, its directors, officers,
      agents and employees, each person who controls the Seller (within the meaning
      of
      Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
      directors, officers, agents or employees of such controlling person, to the
      fullest extent permitted by applicable law, from and against all Losses, as
      incurred, to the extent arising out of or based solely upon: (i) any untrue
      or
      alleged untrue statement of a material fact contained in the Registration
      Statement, any prospectus or in any amendment or supplement thereto 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 supplement thereto, in light of the circumstances
      under which they were made) not misleading to the extent, but only to the
      extent, that such untrue statement or omission is contained in any information
      so furnished in writing by Purchaser to the Seller specifically for inclusion
      in
      the Registration Statement or such prospectus, amendment or supplement, or
      (ii)
      the inaccuracy in any representation or breach of any warranty of Purchaser
      contained herein.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (c)
      If
      any proceeding shall be brought or asserted against any person entitled to
      indemnity hereunder (an "Indemnified Party"), such Indemnified Party shall
      promptly notify the Seller (for purposes of this Section 5, the Seller shall
      be
      referred to as the "Indemnifying Party") in writing, and the Indemnifying Party
      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
      reasonable fees and expenses incurred in connection with the defense thereof;
      provided, that the failure of any Indemnified Party to give such notice shall
      not relieve the Indemnifying Party 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 proximately
      and materially adversely prejudiced the Indemnifying Party. 

    

    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 unless: (1)
      the Indemnifying Party has agreed in writing to pay such fees and expenses;
      (2)
      the Indemnifying Party 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
      Indemnifying Party, and such Indemnified Party shall have been advised by
      counsel that a conflict of interest is likely to exist if the same counsel
      were
      to represent such Indemnified Party and the Indemnifying Party (in which case,
      if such Indemnified Party notifies the Indemnifying Party in writing that it
      elects to employ separate counsel at the expense of the Indemnifying Party,
      the
      Indemnifying Party shall not have the right to assume the defense thereof and
      the reasonable fees and expenses of one separate counsel, (but no more than
      one
      separate counsel on behalf of all of the Indemnified Parties) shall be at the
      expense of the Indemnifying Party). The Indemnifying Party shall not be liable
      for any settlement of any such proceeding effected without its written consent,
      which consent shall not be unreasonably withheld or delayed. No Indemnifying
      Party shall, 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. 

    

    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 (regardless of
      whether it is ultimately determined that an Indemnified Party is not entitled
      to
      indemnification hereunder; provided, that the Indemnifying Party may require
      such Indemnified Party to undertake to reimburse all such fees and expenses
      to
      the extent it is finally judicially determined that such Indemnified Party
      is
      not entitled to indemnification hereunder).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (d)
      If a
      claim for indemnification hereunder is unavailable to an Indemnified Party
      (by
      reason of public policy or otherwise), then each Indemnifying Party, in lieu
      of
      indemnifying such Indemnified Party, shall contribute to the amount paid or
      payable by such Indemnified Party as a result of such Losses, in such proportion
      as is appropriate to reflect the relative fault of the Indemnifying Party 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 relative fault of such Indemnifying Party and Indemnified Party shall be
      determined by reference to, among other things, whether any action in question,
      including any untrue or alleged untrue statement of a material fact or omission
      or alleged omission of a material fact, has been taken or made by, or relates
      to
      information supplied by, such Indemnifying Party or Indemnified Party, and
      the
      parties' relative intent, knowledge, access to information and opportunity
      to
      correct or prevent such action, statement or omission. 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 Section 5(c), 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. 

    

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 5(d), the Purchaser and the
      other
      Indemnified Parties shall not be required to contribute, in the aggregate,
      any
      amount in excess of the amount by which the proceeds actually received by such
      person from the sale of the Waiver Shares subject to such dispute exceeds the
      amount of any damages that such person has otherwise been required to pay by
      reason of such untrue or alleged untrue statement or omission or alleged
      omission, except in the case of fraud by such person. 

    

    (e)
      The
      indemnification obligations set forth in (i) Section 5(a)(i) and Section 5(b)(i)
      shall survive the transactions contemplated herein and shall remain operative
      and in full force until the expiration of the applicable statute of limitations
      and (ii) Section 5(a)(ii) and Section 5(b)(ii) shall survive forever. Any claim
      pending on the expiration date of any applicable survival period for which
      notice has been given to the Indemnifying Party in accordance with this
      Agreement may continue to be asserted and indemnified against until finally
      resolved. 

    

    6. Miscellaneous.

    

    (a)
      Expenses Each of the Purchaser and Seller agrees to pay its own expenses and
      disbursements incident to the performance of its obligations hereunder; provided
      however that the Seller shall pay the fees and expenses as provided in a
      separate letter of direction in the form annexed hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (b)
      Rights Cumulative; Waivers. The rights of each of the parties under this
      Agreement are cumulative. The rights of each of the parties hereunder shall
      not
      be capable of being waived or varied other than by an express waiver or
      variation in writing. Any failure to exercise or any delay in exercising any
      of
      such rights shall not operate as a waiver or variation of that or any other
      such
      right. Any defective or partial exercise of any of such rights shall not
      preclude any other or further exercise of that or any other such right. No
      act
      or course of conduct or negotiation on the part of any party shall in any way
      preclude such party from exercising any such right or constitute a suspension
      or
      any variation of any such right.

    

    (c)
      Benefit; Successors Bound. This Agreement and the terms, covenants, conditions,
      provisions, obligations, undertakings, rights, and benefits hereof, shall be
      binding upon, and shall inure to the benefit of, the undersigned parties and
      their heirs, executors, administrators, representatives, successors, and
      permitted assigns.

    

    (d)
      Entire Agreement. This Agreement contains the entire agreement between the
      parties with respect to the subject matter hereof. There are no promises,
      agreements, conditions, undertakings, understandings, warranties, covenants
      or
      representations, oral or written, express or implied, between them with respect
      to this Agreement or the matters described in this Agreement, except as set
      forth in this Agreement and in the other documentation relating to the
      transactions contemplated by this Agreement. Any such negotiations, promises,
      or
      understandings shall not be used to interpret or constitute this
      Agreement.

    

    (e)
      Amendment. Neither this Agreement nor any term hereof may be amended, waived,
      discharged or terminated other than by a written instrument signed by the party
      against whom enforcement of any such amendment, waiver, discharge or termination
      is sought. 

     

    (f)
      Severability. Each part of this Agreement is intended to be severable. In the
      event that any provision of this Agreement is found by any court or other
      authority of competent jurisdiction to be illegal or unenforceable, such
      provision shall be severed or modified to the extent necessary to render it
      enforceable and as so severed or modified, this Agreement shall continue in
      full
      force and effect. 

    

    (h)
      Notices. All notices, requests, demands or other communications which are
      required or may be given pursuant to the terms of this Agreement shall be in
      writing and shall be deemed to have been duly given: (i) on the date of delivery
      if delivered by hand, (ii) upon the third day after such notice is (a) deposited
      in the United States mail, if mailed by registered or certified mail, postage
      prepaid, return receipt requested, or (b) sent by a nationally recognized
      overnight express courier, or (iii) by facsimile upon written confirmation
      (other than the automatic confirmation that is received from the recipient's
      facsimile machine) of receipt by the recipient of such notice: (i) if to
      Purchaser at the address of the Purchaser on the signature page hereof; and
      (ii)
      if to Seller: Spatialight,
      Inc., Five Hamilton Landing, Novato CA 94949, Facsimilie No. (415)
      883-3363

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (i)
      Governing Law. This Agreement shall be governed by, and construed in accordance
      with, the laws of the State of New York
      without
      giving effect to the principles regarding conflicts of laws. The parties
      irrevocably consent to the exclusive jurisdiction of any State or Federal Court
      located within the County of New York, State of New York, in connection with
      any
      action or proceeding arising out of or relating to this Agreement.

    

    (j)
      Further Assurances. In addition to the instruments and documents to be made,
      executed and delivered pursuant to this Agreement, the parties hereto agree
      to
      make, execute and deliver or cause to be made, executed and delivered, to the
      requesting party such other instruments and to take such other actions as the
      requesting party may reasonably require to carry out the terms of this Agreement
      and the transactions contemplated hereby.

    

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

    

    (l)
      Construction. Unless the context otherwise requires, when used herein, the
      singular shall be deemed to include the plural, the plural shall be deemed
      to
      include each of the singular, and pronouns of one or no gender shall be deemed
      to include the equivalent pronoun of the other or no gender.

    

    (m)
      Execution in Counterparts. This Agreement may be executed in two or more
      counterparts, each of which shall be deemed an original but all of which shall
      constitute one and the same agreement. This Agreement, once executed by a party,
      may be delivered to the other party hereto by telephone line facsimile
      transmission of a copy of this Agreement bearing the signature of the party
      so
      delivering this Agreement. A facsimile transmission of this signed Agreement
      shall be legal and binding on all parties hereto.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

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

     

    
      	 	 	 
	 	SELLER:
	 	 
	 	SPATIALIGHT
              INC. 
	 
 	 
 	 
 
	 	By:  	/s/
              David F.
              Hakala
	 	Name: 	David F. Hakala 
	 	Title: 	Chief Executive Officer 

       

      
        	 	 	 
	 	PURCHASER:
	 	 
	 	Pierce Diversified Strategy
                Master Fund
                LLC 
	 
 	 
 	 
 
	 	By:  	/s/
                Adam
                Epstein
	 	Name: 	Adam Epstein 
	 	Title: 	Principal 

 

      
        	 	 	Address: 	Enable Capital Management 
	 	 	 	One Ferry Building, Suite
                255 
	 	 	 	San Francisco, CA 94111 
	 	 	 	
                Facsimile
                  No. (415) 677-1580

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