Document:

EXHIBIT B

                          REGISTRATION RIGHTS AGREEMENT

                  This Registration  Rights Agreement (this "Agreement") is made
and entered  into as of August 8, 2003,  by and among  SpatiaLight,  Inc., a New
York  corporation (the  "Company"),  and the investors  signatory hereto (each a
"Purchaser" and collectively, the "Purchasers").

                  This  Agreement is made  pursuant to the  Securities  Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"Purchase Agreement").

                  The Company and the Purchasers hereby agree as follows:

1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase  Agreement  shall have the meanings  given such terms in
the Purchase  Agreement.  As used in this  Agreement,  the following terms shall
have the following meanings:

                  "Effectiveness  Date" means,  with respect to the Registration
         Statement  required  to be filed  hereunder,  the  earlier  of the 90th
         calendar  day  following  the Closing  Date (120th  calendar day in the
         event of a full review by the Commission) and (b) the fifth Trading Day
         following  the date on which the Company is notified by the  Commission
         that the  Registration  Statement  will not be reviewed or is no longer
         subject to further review and comments.

                  "Effectiveness  Period"  shall have the  meaning  set forth in
Section 2(a).

                  "Filing  Date"  means,   with  respect  to  the   Registration
         Statement  required  to be  filed  hereunder,  the  30th  calendar  day
         following the Closing Date.

                  "Holder" or "Holders" means the holder or holders, as the case
         may be, from time to time of Registrable Securities.

                  "Indemnified  Party"  shall  have  the  meaning  set  forth in
Section 5(c).

                  "Indemnifying  Party"  shall  have the  meaning  set  forth in
Section 5(c).

                  "Losses" shall have the meaning set forth in Section 5(a).

                  "Proceeding" means an action,  claim,  suit,  investigation or
         proceeding (including,  without limitation, an investigation or partial
         proceeding, such as a deposition), whether commenced or threatened.

                  "Prospectus" means the prospectus included in the Registration
         Statement  (including,  without limitation,  a prospectus that includes
         any information  previously  omitted from a prospectus filed as part of
         an  effective   registration  statement  in  reliance  upon  Rule  430A
         promulgated  under the Securities  Act), as amended or  supplemented by
         any prospectus supplement, with respect to the terms of the offering of
         any portion of the Registrable  Securities  covered by the Registration
         Statement,  and all other amendments

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         and supplements to the Prospectus, including post-effective amendments,
         and all material incorporated by reference or deemed to be incorporated
         by reference in such Prospectus.

                  "Registrable  Securities" means the Shares,  together with any
         shares  of  Common  Stock  issued or  issuable  upon any  stock  split,
         dividend or other distribution,  recapitalization or similar event with
         respect to the foregoing.

Section 5(c).

                  "Losses"  shall have the  meaning  set forth in required to be
         filed  hereunder,  including (in each case) the Prospectus,  amendments
         and supplements to the Registration statement or Prospectus,  including
         pre- and  post-effective  amendments,  all  exhibits  thereto,  and all
         material  incorporated  by  reference or deemed to be  incorporated  by
         reference in the Registration statement.

                  "Rule  415"  means  Rule  415  promulgated  by the  Commission
         pursuant to the  Securities  Act, as such Rule may be amended from time
         to time,  or any similar rule or  regulation  hereafter  adopted by the
         Commission having substantially the same effect as such Rule.

                  "Rule  424"  means  Rule  424  promulgated  by the  Commission
         pursuant to the  Securities  Act, as such Rule may be amended from time
         to time,  or any similar rule or  regulation  hereafter  adopted by the
         Commission having substantially the same effect as such Rule.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Shares"  solely for the purpose of this  Agreement  means the
         Shares (as defined in the Purchase Agreement) together with the Warrant
         Shares issuable upon exercise of the Warrants.

         2.       Registration.

                  (a) On or prior to the Filing Date,  the Company shall prepare
         and file with the Commission the  Registration  Statement  covering the
         resale of all of the Registrable  Securities for an offering to be made
         on a continuous basis pursuant to Rule 415. The Registration  Statement
         required  hereunder  shall be on Form S-3 (except if the Company is not
         then eligible to register for resale the Registrable Securities on Form
         S-3,  in which case the  Registration  shall be on another  appropriate
         form in  accordance  herewith).  The  Registration  Statement  required
         hereunder shall contain  (except if otherwise  directed by the Holders)
         the "Plan of  Distribution"  attached  hereto  as Annex A. The  Company
         shall cause the  Registration  Statement to become effective and remain
         effective as provided  herein.  The Company shall use its  commercially
         reasonable  efforts to cause the Registration  Statement to be declared
         effective  under the  Securities  Act as promptly as possible after the
         filing thereof, but in any event not later than the Effectiveness Date,
         and  shall  use  its  commercially   reasonable  efforts  to  keep  the
         Registration  Statement continuously effective under the Securities Act
         until  the date  which is two  years  after  the  Closing  Date or such
         earlier   date  when  all   Registrable   Securities   covered  by  the
         Registration  Statement  have been sold or may be sold  without  volume
         restrictions  pursuant to Rule 144(k) as  determined  by the counsel to
         the  Company  pursuant  to a

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         written opinion letter to such effect,  addressed and acceptable to the
         Company's  transfer agent and the affected Holders (the  "Effectiveness
         Period").

                  (b) If:  (i) the  Registration  Statement  is not  filed on or
         prior to its Filing  Date,  or (ii) the Company  fails to file with the
         Commission  a request  for  acceleration  in  accordance  with Rule 461
         promulgated  under the Securities  Act,  within ten Trading Days of the
         date that the Company is notified in writing by the Commission that the
         Registration  Statement  will  not be  "reviewed,"  or not  subject  to
         further  review  (any such  failure or breach  being  referred to as an
         "Event,"  and for  purposes  of clause (i) the date on ----- which such
         Event occurs, or for purposes of clause (ii) the date on which such ten
         Trading Day period is exceeded being referred to as "Event Date"), then
         in  addition  to any other  rights  the  Holders  may have  -----------
         hereunder  or under  applicable  law:  (x) on each such  Event Date the
         Company  shall pay to each  Holder an  amount  in cash,  as  liquidated
         damages and not as a penalty,  equal to 1% of the  Subscription  Amount
         paid  by  such  Holder  pursuant  to the  Purchase  Agreement  for  any
         Registrable  Securities  then  held  by  such  Holder;  and (y) on each
         monthly  anniversary of each such Event Date (if the  applicable  Event
         shall not have been cured by such date) until the  applicable  Event is
         cured,  the  Company  shall pay to each  Holder  an amount in cash,  as
         liquidated  damages and not as a penalty,  equal to 2% of the aggregate
         purchase price paid by such Holder  pursuant to the Purchase  Agreement
         for any Registrable Securities then held by such Holder.

         3.       Registration Procedures

                  In  connection  with the  Company's  registration  obligations
hereunder, the Company shall:

                  (a) Not less than two Trading  Days prior to the filing of the
         Registration  Statement or any related  Prospectus  or any amendment or
         supplement  thereto,  the  Company  shall,  (i)  furnish to the Holders
         copies of all such documents proposed to be filed (including  documents
         incorporated  or  deemed   incorporated  by  reference  to  the  extent
         reasonably requested by such Person) which documents will be subject to
         the review of such Holders,  and (ii) cause its officers and directors,
         counsel and independent certified public accountants to respond to such
         inquiries  from the Holders as shall be  necessary,  in the  reasonable
         opinion of  respective  counsel to conduct a  reasonable  investigation
         within the meaning of the  Securities  Act. The Company  shall not file
         the Registration  Statement or any such Prospectus or any amendments or
         supplements  thereto  to  which  the  Holders  of  a  majority  of  the
         Registrable Securities shall reasonably object in good faith.

                  (b) (i) Prepare and file with the Commission such  amendments,
         including post-effective  amendments, to the Registration Statement and
         the Prospectus used in connection therewith as may be necessary to keep
         the Registration  Statement continuously effective as to the applicable
         Registrable  Securities for the  Effectiveness  Period;  (ii) cause the
         related  Prospectus  to be  amended  or  supplemented  by any  required
         Prospectus  supplement,  and as so  supplemented or amended to be filed
         pursuant to Rule 424; (iii) respond as promptly as reasonably possible,
         and in any event within fifteen

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         Trading Days, to any comments received from the Commission with respect
         to the Registration Statement or any amendment thereto and, as promptly
         as  reasonably  possible,  upon  request,  provide the Holders true and
         complete  copies  of all  correspondence  from  and  to the  Commission
         relating to the Registration Statement; and (iv) comply in all material
         respects with the provisions of the Securities Act and the Exchange Act
         with respect to the disposition of all Registrable  Securities  covered
         by  the  Registration   Statement  during  the  applicable   period  in
         accordance  with the  intended  methods of  disposition  by the Holders
         thereof  set forth in the  Registration  Statement  as so amended or in
         such Prospectus as so supplemented.

                  (c) Notify the Holders of Registrable Securities to be sold as
         promptly as reasonably  possible (and, in the case of (i)(A) below, not
         less than two Trading Days prior to such  filing) and (if  requested by
         any such Person) confirm such notice in writing promptly  following the
         day  (i)(A)  when  a  Prospectus  or  any   Prospectus   supplement  or
         post-effective  amendment to the Registration  Statement is proposed to
         be filed;  (B) when the Commission  notifies the Company  whether there
         will be a "review"  of the  Registration  Statement  and  whenever  the
         Commission  comments  in writing  on the  Registration  Statement  (the
         Company shall upon request provide true and complete copies thereof and
         all written  responses  thereto to each of the  Holders);  and (C) with
         respect to the Registration Statement or any post-effective  amendment,
         when  the  same  has  become  effective;  (ii)  of any  request  by the
         Commission or any other Federal or state governmental  authority during
         the  period  of  effectiveness   of  the  Registration   Statement  for
         amendments or supplements to the  Registration  Statement or Prospectus
         or for additional information;  (iii) of the issuance by the Commission
         or any other federal or state governmental  authority of any stop order
         suspending the effectiveness of the Registration Statement covering any
         or  all  of  the  Registrable  Securities  or  the  initiation  of  any
         Proceedings for that purpose; (iv) of the receipt by the Company of any
         notification  with respect to the  suspension of the  qualification  or
         exemption from  qualification of any of the Registrable  Securities for
         sale in any  jurisdiction,  or the  initiation  or  threatening  of any
         Proceeding for such purpose;  and (v) of the occurrence of any event or
         passage of time that makes the  financial  statements  included  in the
         Registration   Statement   ineligible  for  inclusion  therein  or  any
         statement  made in the  Registration  Statement  or  Prospectus  or any
         document incorporated or deemed to be incorporated therein by reference
         untrue in any material  respect or that  requires any  revisions to the
         Registration  Statement,  Prospectus or other documents so that, in the
         case of the Registration  Statement or the Prospectus,  as the case may
         be, it will not contain any untrue statement of a material fact or omit
         to state any material fact  required to be stated  therein or necessary
         to make the statements  therein,  in light of the  circumstances  under
         which they were made, not misleading.

                  (d) Use its  commercially  reasonable  efforts  to  avoid  the
         issuance  of, or, if issued,  obtain  the  withdrawal  of (i) any order
         suspending the effectiveness of the Registration Statement, or (ii) any
         suspension of the  qualification  (or exemption from  qualification) of
         any of the Registrable Securities for sale in any jurisdiction,  at the
         earliest practicable moment.

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<PAGE>

                  (e)  Furnish  to each  Holder,  without  charge,  at least one
         conformed  copy  of  the  Registration  Statement  and  each  amendment
         thereto,  including financial  statements and schedules,  all documents
         incorporated or deemed to be  incorporated  therein by reference to the
         extent  requested  by such  Person,  and  all  exhibits  to the  extent
         requested  by such Person  (including  those  previously  furnished  or
         incorporated by reference)  promptly after the filing of such documents
         with the Commission.

                  (f) Promptly deliver to each Holder,  without charge,  as many
         copies  of the  Prospectus  or  Prospectuses  (including  each  form of
         prospectus)  and each  amendment or supplement  thereto as such Persons
         may  reasonably  request in  connection  with  resales by the Holder of
         Registrable Securities.  The Company hereby consents to the use of such
         Prospectus  and each  amendment  or  supplement  thereto by each of the
         selling  Holders  in  connection  with  the  offering  and  sale of the
         Registrable  Securities covered by such Prospectus and any amendment or
         supplement  thereto,  except after the giving on any notice pursuant to
         Section 3(c).

                  (g) Prior to any resale of Registrable Securities by a Holder,
         use its  commercially  reasonable  efforts  to  register  or qualify or
         cooperate with the selling Holders in connection with the  registration
         or qualification  (or exemption from the Registration or qualification)
         of such  Registrable  Securities for the resale by the Holder under the
         securities  or Blue Sky laws of such  jurisdictions  within  the United
         States as any Holder reasonably  requests in writing,  to keep each the
         Registration or qualification (or exemption therefrom) effective during
         the  Effectiveness  Period  and to do any and all other  acts or things
         reasonably necessary to enable the disposition in such jurisdictions of
         the  Registrable  Securities  covered  by the  Registration  Statement;
         provided,  that the Company  shall not be required to --------  qualify
         generally  to do business in any  jurisdiction  where it is not then so
         qualified,  subject  the  Company  to any  material  tax  in  any  such
         jurisdiction  where it is not then so subject or file a general consent
         to service of process in any such jurisdiction.

                  (h) If requested by the Holders, cooperate with the Holders to
         facilitate  the  timely   preparation   and  delivery  of  certificates
         representing  Registrable  Securities  to be  delivered to a transferee
         pursuant to the Registration  Statement,  which  certificates  shall be
         free,  to the  extent  permitted  by  the  Purchase  Agreement,  of all
         restrictive legends, and to enable such Registrable Securities to be in
         such denominations and registered in such names as any such Holders may
         request.

                  (i) Upon the occurrence of any event  contemplated  by Section
         3(c)(v),  as promptly as reasonably  possible,  prepare a supplement or
         amendment,  including a post-effective  amendment,  to the Registration
         Statement or a  supplement  to the related  Prospectus  or any document
         incorporated  or deemed to be  incorporated  therein by reference,  and
         file any other  required  document so that,  as  thereafter  delivered,
         neither the Registration  Statement nor such Prospectus will contain an
         untrue  statement of a material  fact or omit to state a material  fact
         required  to be stated  therein  or  necessary  to make the  statements
         therein,  in light of the circumstances under which they were made, not
         misleading.

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<PAGE>

                  (j) Comply with all  applicable  rules and  regulations of the
         Commission.

                  (k) The Company may require each selling  Holder to furnish to
         the Company a certified  statement as to the number of shares of Common
         Stock  beneficially  owned by such  Holder  and any  other  information
         requested by the Commission.

         4.  Registration  Expenses.  All  fees  and  expenses  incident  to the
performance  of or compliance  with this Agreement by the Company shall be borne
by the Company  whether or not any  Registrable  Securities are sold pursuant to
the Registration  Statement.  The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required  to be made with the Trading  Market on which the Common  Stock is then
listed for trading,  and (B) in compliance with applicable  state  securities or
Blue Sky laws), (ii) printing expenses (including, without limitation,  expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the  printing of  prospectuses  is  reasonably  requested by the holders of a
majority of the Registrable Securities included in the Registration  Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance,  if the Company
so desires  such  insurance,  and (vi) fees and  expenses  of all other  Persons
retained by the Company in connection with the  consummation of the transactions
contemplated  by this Agreement.  In addition,  the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including,  without limitation,
all salaries and expenses of its  officers  and  employees  performing  legal or
accounting  duties),  the expense of any annual  audit and the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities exchange as required hereunder.

         5. Indemnification

                  (a)  Indemnification  by  the  Company.   The  Company  shall,
         notwithstanding  any termination of this Agreement,  indemnify and hold
         harmless each Holder, the officers,  directors, agents and employees of
         each of them,  each Person who  controls  any such  Holder  (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 attorneys' fees) and
         expenses  (collectively,  "Losses"), as incurred, to the extent arising
         out of or relating to any ------ untrue or alleged untrue  statement of
         a material fact contained in the Registration Statement, any Prospectus
         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, except to the
         extent,  but only to the  extent,  that (1) such untrue  statements  or
         omissions  are based  solely  upon  information  regarding  such Holder
         furnished  in writing to the Company by such Holder  expressly  for use
         therein,  or to the extent that such information relates to such Holder
         or  such  Holder's  proposed  method  of  distribution  of  Registrable
         Securities  and was reviewed and expressly  approved in writing

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<PAGE>

         by such Holder  expressly for use in the Registration  Statement,  such
         Prospectus or such form of Prospectus or in any amendment or supplement
         thereto  (it being  understood  that the  Holder has  approved  Annex A
         hereto  for this  purpose)  or (2) in the case of an  occurrence  of an
         event of the type  specified in Section  3(c)(ii)-(v),  the use by such
         Holder of an outdated  or  defective  Prospectus  after the Company has
         notified  such  Holder in writing  that the  Prospectus  is outdated or
         defective  and  prior  to the  receipt  by such  Holder  of the  Advice
         contemplated  in Section  6(c).  The Company  shall  notify the Holders
         promptly of the  institution,  threat or assertion of any Proceeding of
         which  the  Company  is  aware  in  connection  with  the  transactions
         contemplated by this Agreement.

                  (b) Indemnification by Holders.  Each Holder shall,  severally
         and  not  jointly,   indemnify  and  hold  harmless  the  Company,  its
         directors, officers, agents and employees, each Person who controls the
         Company  (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  Persons, to the fullest extent permitted
         by  applicable  law, from and against all Losses,  as incurred,  to the
         extent  arising  out of or based  upon:  (x) such  Holder's  failure to
         comply with the prospectus delivery  requirements of the Securities Act
         or (y) any  untrue or  alleged  untrue  statement  of a  material  fact
         contained in any Registration Statement, any Prospectus, 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 not  misleading  (i) to the
         extent, but only to the extent,  that such untrue statement or omission
         is contained in any  information so furnished in writing by such Holder
         to the Company specifically for inclusion in the Registration Statement
         or  such  Prospectus  or  (ii)  to the  extent  that  (1)  such  untrue
         statements  or omissions  are based solely upon  information  regarding
         such  Holder  furnished  in  writing  to the  Company  by  such  Holder
         expressly  for use  therein,  or to the  extent  that such  information
         relates to such Holder or such Holder's proposed method of distribution
         of Registrable  Securities  and was reviewed and expressly  approved in
         writing by such Holder expressly for use in the Registration  Statement
         (it being  understood  that the Holder has approved  Annex A hereto for
         this  purpose),  such  Prospectus  or such form of Prospectus or in any
         amendment or supplement  thereto or (2) in the case of an occurrence of
         an event of the type specified in Section 3(c)(ii)-(v), the use by such
         Holder of an outdated  or  defective  Prospectus  after the Company has
         notified  such  Holder in writing  that the  Prospectus  is outdated or
         defective  and  prior  to the  receipt  by such  Holder  of the  Advice
         contemplated  in Section  6(c).  In no event shall the liability of any
         selling Holder hereunder be greater in amount than the dollar amount of
         the  net  proceeds  received  by  such  Holder  upon  the  sale  of the
         Registrable Securities giving rise to such indemnification obligation.

                  (c) Conduct of Indemnification  Proceedings. 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  Person  from  whom  indemnity  is  sought  (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 fees and expenses  incurred in  connection  with defense
         thereof;  provided,  that the failure of any Indemnified  Party to

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<PAGE>

         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   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  or  Parties  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  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.  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,  within ten Trading  Days of written
         notice  thereof  to  the  Indemnifying   Party;   provided,   that  the
         Indemnified Party shall promptly  reimburse the Indemnifying  Party 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.

                  (d) Contribution. If a claim for indemnification under Section
         5(a) or 5(b) 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

                                      -8-
<PAGE>

         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),  no  Holder  shall be  required  to  contribute,  in the
         aggregate,  any  amount in excess of the  amount by which the  proceeds
         actually  received  by such  Holder  from the  sale of the  Registrable
         Securities  subject to the Proceeding exceeds the amount of any damages
         that such Holder 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 Holder.

                  The indemnity and  contribution  agreements  contained in this
         Section are in addition to any liability that the Indemnifying  Parties
         may have to the Indemnified Parties.

         6.       Miscellaneous

                  (a) Remedies.  In the event of a breach by the Company or by a
         Holder, of any of their  obligations under this Agreement,  each Holder
         or the  Company,  as the case may be, in addition to being  entitled to
         exercise all rights granted by law and under this Agreement,  including
         recovery of damages,  will be entitled to specific  performance  of its
         rights  under this  Agreement.  The Company and each Holder  agree that
         monetary damages would not provide adequate compensation for any losses
         incurred by reason of a breach by it of any of the  provisions  of this
         Agreement  and hereby  further  agrees that, in the event of any action
         for specific  performance in respect of such breach, it shall waive the
         defense that a remedy at law would be adequate.

                  (b) Compliance.  Each Holder covenants and agrees that it will
         comply with the prospectus delivery  requirements of the Securities Act
         as applicable to it in connection with sales of Registrable  Securities
         pursuant to the Registration Statement.

                  (c)  Discontinued  Disposition.  Each  Holder  agrees  by  its
         acquisition  of such  Registrable  Securities  that,  upon receipt of a
         notice  from the  Company  of the  occurrence  of any event of the kind
         described  in Section  3(c),  such  Holder will  forthwith  discontinue
         disposition  of such  Registrable  Securities  under  the  Registration
         Statement until such Holder's receipt of the copies of the supplemented
         Prospectus and/or amended Registration Statement or until it is advised
         in writing  (the  "Advice")  by the Company  ------ that the use of the
         applicable Prospectus may be resumed, and, in either case, has received
         copies of any additional or supplemental  filings that are incorporated
         or  deemed

                                      -9-
<PAGE>

         to be  incorporated  by reference in such  Prospectus  or  Registration
         Statement.  The Company may provide  appropriate stop orders to enforce
         the provisions of this paragraph.

                  (d) Amendments and Waivers.  The provisions of this Agreement,
         including the provisions of this sentence, may not be amended, modified
         or  supplemented,  and  waivers  or  consents  to  departures  from the
         provisions hereof may not be given, unless the same shall be in writing
         and  signed by the  Company  and each  Holder  of the then  outstanding
         Registrable Securities.

                  (e) Notices.  Any and all notices or other  communications  or
         deliveries  required or permitted to be provided  hereunder shall be in
         writing and shall be deemed given and  effective on the earliest of (i)
         the date of transmission,  if such notice or communication is delivered
         via facsimile at the facsimile  number provided for below prior to 6:30
         p.m.  (New York City time) on a Trading Day, (ii) the Trading Day after
         the date of transmission,  if such notice or communication is delivered
         via  facsimile at the  facsimile  number  provided for below later than
         6:30 p.m.  (New York City time) on any date and earlier than 11:59 p.m.
         (New York City time) on such date,  (iii) the Trading Day following the
         date of mailing,  if sent by nationally  recognized  overnight  courier
         service,  or (iv) upon actual  receipt by the party to whom such notice
         is   required  to  be  given.   The   address  for  such   notices  and
         communications  shall be  delivered  and  addressed as set forth in the
         Purchase Agreement

                  (f) Successors and Assigns.  This Agreement shall inure to the
         benefit of and be binding upon the successors and permitted  assigns of
         each of the parties and shall inure to the benefit of each Holder. Each
         Holder may assign their  respective  rights hereunder in the manner and
         to the Persons as permitted under the Purchase Agreement.

                  (g) Execution and Counterparts. This Agreement may be executed
         in any number of counterparts,  each of which when so executed shall be
         deemed  to be an  original  and,  all of  which  taken  together  shall
         constitute one and the same Agreement.  In the event that any signature
         is delivered by facsimile  transmission,  such signature shall create a
         valid  binding  obligation  of the party  executing (or on whose behalf
         such  signature is executed) the same with the same force and effect as
         if such facsimile signature were the original thereof.

                  (h) Governing Law. All questions  concerning the construction,
         validity,  enforcement  and  interpretation  of this Agreement shall be
         governed by and construed and enforced in accordance  with the internal
         laws of the State of New York,  without  regard  to the  principles  of
         conflicts of law thereof.  Each party agrees that all legal proceedings
         concerning  the   interpretations,   enforcement  and  defense  of  the
         transactions  contemplated by this Agreement (whether brought against a
         party  hereto  or  its  respective  affiliates,   directors,  officers,
         shareholders,  employees or agents) shall be commenced  exclusively  in
         the state and federal courts sitting in the City of New York, New York.
         Each  party  hereto  hereby   irrevocably   submits  to  the  exclusive
         jurisdiction of the state and federal courts sitting in the City of New
         York,  New York for the  adjudication  of any dispute  hereunder  or in
         connection  herewith  or with any  transaction  contemplated  hereby or
         discussed

                                      -10-
<PAGE>

         herein  (including  with respect to the  enforcement of the any of this
         Agreement),  and hereby irrevocably waives, and agrees not to assert in
         any suit,  action or  proceeding,  any claim that it is not  personally
         subject to the jurisdiction of any such court,  that such suit,  action
         or proceeding is improper.  Each party hereto hereby irrevocably waives
         personal service of process and consents to process being served in any
         such  suit,  action  or  proceeding  by  mailing  a  copy  thereof  via
         registered or certified  mail or overnight  delivery  (with evidence of
         delivery)  to such party at the  address  in effect  for  notices to it
         under this Agreement and agrees that such service shall constitute good
         and sufficient service of process and notice thereof. Nothing contained
         herein  shall be deemed to limit in any way any right to serve  process
         in any manner  permitted by law. Each party hereto  hereby  irrevocably
         waives,  to the fullest extent permitted by applicable law, any and all
         right  to  trial  by jury in any  legal  proceeding  arising  out of or
         relating to this Agreement or the transactions  contemplated hereby. If
         either  party  shall  commence an action or  proceeding  to enforce any
         provisions of this Agreement,  then the prevailing party in such action
         or proceeding  shall be reimbursed by the other party for its attorneys
         fees and other  costs and  expenses  incurred  with the  investigation,
         preparation and prosecution of such action or proceeding.

                  (i)  Cumulative  Remedies.  The remedies  provided  herein are
         cumulative and not exclusive of any remedies provided by law.

                  (j)  Severability.   If  any  term,  provision,   covenant  or
         restriction  of  this  Agreement  is  held  by  a  court  of  competent
         jurisdiction  to  be  invalid,  illegal,  void  or  unenforceable,  the
         remainder of the terms,  provisions,  covenants  and  restrictions  set
         forth  herein shall remain in full force and effect and shall in no way
         be affected, impaired or invalidated,  and the parties hereto shall use
         their commercially reasonable efforts to find and employ an alternative
         means to  achieve  the same or  substantially  the same  result as that
         contemplated by such term,  provision,  covenant or restriction.  It is
         hereby  stipulated and declared to be the intention of the parties that
         they would have executed the remaining terms, provisions, covenants and
         restrictions  without  including  any of  such  that  may be  hereafter
         declared invalid, illegal, void or unenforceable.

                  (k)  Headings.   The  headings  in  this   Agreement  are  for
         convenience of reference  only and shall not limit or otherwise  affect
         the meaning hereof.

                  (l) Independent Nature of Purchasers'  Obligations and Rights.
         The  obligations of each  Purchaser  hereunder is several and not joint
         with the obligations of any other Purchaser hereunder, and no Purchaser
         shall be responsible in any way for the  performance of the obligations
         of any other Purchaser  hereunder.  Nothing  contained herein or in any
         other  agreement or document  delivered  at any closing,  and no action
         taken by any Purchaser  pursuant hereto or thereto,  shall be deemed to
         constitute  the Purchasers as a partnership,  an  association,  a joint
         venture or any other kind of entity,  or create a presumption  that the
         Purchasers  are in any way  acting  in  concert  with  respect  to such
         obligations or the  transactions  contemplated by this Agreement.  Each
         Purchaser  shall  be  entitled  to  protect  and  enforce  its  rights,
         including without  limitation the rights arising out of this Agreement,
         and it shall not be necessary  for any other  Purchaser to be joined as
         an additional party in any proceeding for such purpose.

                                      -11-
<PAGE>

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

                                      -12-
<PAGE>

                                                                       EXHIBIT B

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

                                  SPATIALIGHT, INC.

                                  By: _____________________________________
                                      Name:
                                      Title:

                     [PURCHASERS' SIGNATURE PAGES TO FOLLOW]

                                      -13-
<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

                                   [PURCHASER]

                                  By: ____________________________________
                                      Name:
                                      Title:

                     [PURCHASERS' SIGNATURE PAGES TO FOLLOW]

                                      -14-
<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

[PURCHASER]

By: _____________________________________
       Name:
       Title:

                                      -15-

<PAGE>

                                                                         ANNEX A

                              Plan of Distribution

         The  Selling  Stockholders  and any of their  pledgees,  assignees  and
successors-in-interest  may, from time to time,  sell any or all of their shares
of Common Stock on any stock exchange,  market or trading  facility on which the
shares  are traded or in private  transactions.  These  sales may be at fixed or
negotiated  prices.  The  Selling  Stockholders  may  use any one or more of the
following methods when selling shares:

         o        ordinary brokerage  transactions and transactions in which the
                  broker-dealer solicits purchasers;

         o        block trades in which the  broker-dealer  will attempt to sell
                  the shares as agent but may  position  and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a  broker-dealer  as principal  and resale by the
                  broker-dealer for its account;

         o        an exchange  distribution  in accordance with the rules of the
                  applicable exchange;

         o        privately negotiated transactions;

         o        settlement of short sales;

         o        broker-dealers may agree with the Selling Stockholders to sell
                  a specified  number of such shares at a  stipulated  price per
                  share;

         o        a combination of any such methods of sale; and

         o        any other method permitted pursuant to applicable law.

         The Selling  Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

         Broker-dealers  engaged by the  Selling  Stockholders  may  arrange for
other  brokers-dealers  to  participate  in sales.  Broker-dealers  may  receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares,  from the purchaser) in amounts to be
negotiated.  The  Selling  Stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

         The  Selling  Stockholders  may  from  time to time  pledge  or grant a
security  interest  in some or all of the shares of common  stock  owned by them
and,  if they  default in the  performance  of their  secured  obligations,  the
pledgees or secured  parties may offer and sell the shares of common  stock from
time to time under this  prospectus,  or under an amendment  to this  prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933

                                      -16-

<PAGE>

amending the list of Selling Stockholders to include the pledgee,  transferee or
other successors in interest as Selling Stockholders under this prospectus.

         The  Selling  Stockholders  and any  broker-dealers  or agents that are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed  the  Company  that it does not have any  agreement  or  understanding,
directly or indirectly, with any person to distribute the Common Stock.

         The Company is required  to pay all fees and  expenses  incident to the
registration  of the shares.  The Company  has agreed to  indemnify  the Selling
Stockholders against certain losses, claims, damages and liabilities,  including
liabilities under the Securities Act.

                                      -17-EXHIBIT C

THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  WITH THE  SECURITIES  AND EXCHANGE
COMMISSION  OR THE  SECURITIES  COMMISSION  OF ANY  STATE  IN  RELIANCE  UPON AN
EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN  AVAILABLE   EXEMPTION  FROM,  OR  IN  A  TRANSACTION  NOT  SUBJECT  TO,  THE
REGISTRATION   REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN  ACCORDANCE  WITH
APPLICABLE  STATE  SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE  TRANSFEROR  TO SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN  ACCOUNT WITH A REGISTERED  BROKER-DEALER  OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT.

                             STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                                SPATIALIGHT, INC.

                  THIS  STOCK  PURCHASE   WARRANT   CERTIFIES  that,  for  value
received,  _____________ (the "Holder"), is entitled, upon the terms and subject
to the limitations on exercise and the conditions  hereinafter set forth, at any
time on or after August 8, 2003 (the "Initial Exercise Date") and on or prior to
the close of business on the five-year  anniversary of the Initial Exercise Date
(the "Termination Date") but not thereafter,  to subscribe for and purchase from
SpatiaLight,  Inc.,  a  corporation  incorporated  in the State of New York (the
"Company"),  up to ____________  shares (the "Warrant  Shares") of Common Stock,
par value $0.01 per share,  of the Company  (the "Common  Stock").  The purchase
price of one share of Common  Stock (the  "Exercise  Price")  under this Warrant
shall be $3.29,  subject to  adjustment  hereunder.  The Exercise  Price and the
number of Warrant Shares for which the Warrant is  exercisable  shall be subject
to  adjustment  as provided  herein.  CAPITALIZED  TERMS USED AND NOT  OTHERWISE
DEFINED  HEREIN SHALL HAVE THE  MEANINGS  SET FORTH IN THAT  CERTAIN  SECURITIES
PURCHASE AGREEMENT (THE "PURCHASE AGREEMENT"), DATED AUGUST 8, 2003, BETWEEN THE
COMPANY AND THE INVESTORS SIGNATORY THERETO.

                                       1
<PAGE>

         1.  Title to  Warrant.  Prior to the  Termination  Date and  subject to
compliance with applicable laws and Section 7 of this Warrant,  this Warrant and
all rights  hereunder  are  transferable,  in whole or in part, at the office or
agency of the  Company by the Holder in person or by duly  authorized  attorney,
upon surrender of this Warrant  together with the Assignment Form annexed hereto
properly  endorsed.  The transferee shall sign an investment  letter in form and
substance reasonably satisfactory to the Company.

         2.  Authorization  of Shares.  The Company  covenants  that all Warrant
Shares which may be issued upon the exercise of the purchase rights  represented
by this Warrant will, upon exercise of the purchase  rights  represented by this
Warrant,  be duly authorized,  validly issued,  fully paid and nonassessable and
free from all taxes,  liens and charges in respect of the issue  thereof  (other
than taxes in  respect of any  transfer  occurring  contemporaneously  with such
issue).

         3. Exercise of Warrant.

                  (a) Except as  provided  in Section 4 herein,  exercise of the
         purchase rights  represented by this Warrant may be made at any time or
         times on or after  the  Initial  Exercise  Date  and on or  before  the
         Termination  Date by the  surrender  of this  Warrant and the Notice of
         Exercise  Form  annexed  hereto  duly  executed,  at the  office of the
         Company  (or such  other  office  or agency  of the  Company  as it may
         designate by notice in writing to the registered  Holder at the address
         of such Holder  appearing on the books of the Company) and upon payment
         of the Exercise Price of the shares thereby  purchased by wire transfer
         or cashier's  check drawn on a United States bank.  Upon such exercise,
         the Holder shall be entitled to receive a certificate for the number of
         Warrant  Shares  so  purchased.   Certificates   for  shares  purchased
         hereunder  shall be  delivered  to the Holder  within nine Trading Days
         after the date on which  this  Warrant  shall  have been  exercised  as
         aforesaid.  Notwithstanding anything herein to the contrary, in lieu of
         issuing  certificates  for  shares  purchased  hereunder,  upon  mutual
         agreement of the Company and the Holder,  the Company may authorize its
         transfer agent to issue shares through  electronic  transactions.  This
         Warrant shall be deemed to have been exercised and such  certificate or
         certificates  shall be deemed to have been  issued,  and  Holder or any
         other person so  designated to be named therein shall be deemed to have
         become a holder of record of such  shares for all  purposes,  as of the
         date the  Warrant has been  exercised  by payment to the Company of the
         Exercise Price and all taxes required to be paid by the Holder, if any,
         pursuant to Section 5 prior to the issuance of such  shares,  have been
         paid. If the Company  fails to deliver to the Holder a  certificate  or
         certificates  representing  the Warrant Shares pursuant to this Section
         3(a) by the ninth  Trading  Day after  the date of  exercise,  then the
         Holder will have the right to rescind such exercise. In addition to any
         other rights  available to the Holder,  if the Company fails to deliver
         to the Holder a certificate or  certificates  representing  the Warrant
         Shares  pursuant to an exercise by the ninth Trading Day after the date
         of exercise, and if after such ninth Trading Day the Holder is required
         by its broker to purchase (in an open market  transaction or otherwise)
         shares of Common  Stock to  deliver  in  satisfaction  of a sale by the
         Holder of the Warrant  Shares  which the Holder  anticipated  receiving
         upon such exercise (a "Buy-In"), then the

                                       2
<PAGE>

         Company shall (1) pay in cash to the Holder the amount by which (x) the
         Holder's total purchase price (including brokerage commissions, if any)
         for the  shares of Common  Stock so  purchased  exceeds  (y) the amount
         obtained  by  multiplying  (A) the  number of Warrant  Shares  that the
         Company was  required to deliver to the Holder in  connection  with the
         exercise  at issue  times (B) the price at which the sell order  giving
         rise to such purchase obligation was executed, and (2) at the option of
         the Holder,  either reinstate the portion of the Warrant and equivalent
         number of Warrant  Shares for which such  exercise  was not  honored or
         deliver to the  Holder the number of shares of Common  Stock that would
         have been issued had the Company timely  complied with its exercise and
         delivery  obligations  hereunder.  For example, if the Holder purchases
         Common Stock having a total purchase price of $11,000 to cover a Buy-In
         with respect to an attempted exercise of shares of Common Stock with an
         aggregate  sale  price  giving  rise to  such  purchase  obligation  of
         $10,000,  under clause (1) of the  immediately  preceding  sentence the
         Company  shall be required to pay the Holder  $1,000.  The Holder shall
         provide the Company  written notice  indicating the amounts  payable to
         the  Holder  in  respect  of  the  Buy-In,   together  with  applicable
         confirmations and other evidence  reasonably  requested by the Company.
         Nothing  herein  shall  limit a  Holder's  right to  pursue  any  other
         remedies  available  to it  hereunder,  at law or in equity  including,
         without limitation,  a decree of specific performance and/or injunctive
         relief  with  respect  to  the  Company's  failure  to  timely  deliver
         certificates  representing  shares of Common Stock upon exercise of the
         Warrant as required pursuant to the terms hereof.

                  (b) If this Warrant  shall have been  exercised  in part,  the
         Company  shall,   at  the  time  of  delivery  of  the  certificate  or
         certificates  representing  Warrant  Shares,  deliver  to  Holder a new
         Warrant  evidencing  the rights of Holder to purchase  the  unpurchased
         Warrant  Shares called for by this Warrant,  which new Warrant shall in
         all other respects be identical with this Warrant.

                  (c)  Notwithstanding  anything  herein to the contrary,  in no
         event  shall the Holder be  permitted  to  exercise  this  Warrant  for
         Warrant  Shares to the  extent  that (i) the number of shares of Common
         Stock  beneficially  owned by such Holder,  together with any affiliate
         thereof  (other than  Warrant  Shares  issuable  upon  exercise of this
         Warrant) plus (ii) the number of Warrant Shares  issuable upon exercise
         of this Warrant,  would be equal to or exceed  4.9999% of the number of
         shares of Common Stock then issued and  outstanding,  including  shares
         issuable  upon  exercise  of this  Warrant  held by such  Holder  after
         application of this Section 3(c). As used herein,  beneficial ownership
         shall be determined  in  accordance  with Section 13(d) of the Exchange
         Act and the  rules  promulgated  thereunder.  To the  extent  that  the
         limitation contained in this Section 3(c) applies, the determination of
         whether this Warrant is  exercisable  (in relation to other  securities
         owned  by the  Holder)  and of  which  a  portion  of this  Warrant  is
         exercisable  shall be in the sole  discretion  of such Holder,  and the
         submission of a Notice of Exercise  shall be deemed to be such Holder's
         determination  of whether this Warrant is  exercisable  (in relation to
         other  securities  owned by such  Holder) and of which  portion of this
         Warrant  is  exercisable,  in  each  case  subject  to  such  aggregate
         percentage  limitation,  and the Company  shall have no  obligation  to
         verify or confirm the accuracy of such determination. Nothing contained
         herein  shall be deemed to  restrict  the right of a Holder to exercise
         this Warrant into Warrant Shares at such time as such exercise will not
         violate

                                       3
<PAGE>

         the  provisions  of this Section 3(c).  The  provisions of this Section
         3(c) may be waived by the Holder  upon,  at the election of the Holder,
         not less than 61 days' prior notice to the Company,  and the provisions
         of this  Section  3(c) shall  continue to apply until such 61st day (or
         such later date, as  determined  by the Holder,  as may be specified in
         such notice of waiver).  No exercise of this  Warrant in  violation  of
         this Section 3(c) but otherwise in  accordance  with this Warrant shall
         affect the status of the Warrant Shares as validly  issued,  fully-paid
         and nonassessable.

                  (d) If at any time after one year from the date of issuance of
         this Warrant there is no effective  Registration  Statement registering
         the resale of the Warrant  Shares by the Holder,  this Warrant may also
         be  exercised  at such time by means of a "cashless  exercise" in which
         the Holder shall be entitled to receive a certificate for the number of
         Warrant Shares equal to the quotient  obtained by dividing  [(A-B) (X)]
         by (A), where:

         (A)      = the Closing  Price on the Trading Day  preceding the date of
                    such election;

         (B)      = the Exercise Price of the Warrants, as adjusted; and

         (X)      = the number of Warrant  Shares  issuable upon exercise of the
                    Warrants in accordance with the terms of this Warrant.

                  (e) Subject to the  provisions of this Section 3, if after the
         Effective Date the Closing Price (the "Measurement Price") exceeds 250%
         of the then Exercise  Price  (subject to adjustment  herein)("Threshold
         Price Date") and the daily average  trading  volume of the Common Stock
         for the 10 Trading Days  including  and prior to such  Threshold  Price
         Date exceeds 100,000 shares,  then the Company may, within five Trading
         Days of such date,  call for the exercise of all or any portion of this
         Warrant for which a Notice of Exercise has not yet been delivered (such
         right, a "Call").  To exercise this right,  the Company must deliver to
         the Holder an irrevocable written notice (a "Call Notice"),  indicating
         therein the  portion of  unexercised  portion of this  Warrant to which
         such notice applies (such date, the "Call Date").  Within three Trading
         Days of the Call  Date,  the  Holder  shall pay to the  Company by wire
         transfer of  immediately  available  funds the  exercise  price for the
         Warrant  Shares to be issued in  connection  with the Call Notice.  Any
         unexercised  portion of this  Warrant to which the Call Notice does not
         pertain  will  be  unaffected  by  such  Call  Notice.  Notwithstanding
         anything to the contrary set forth in this Warrant, the Company may not
         deliver a Call Notice or require the  cancellation of this Warrant (and
         any Call Notice will be void), unless, at the time of sending such Call
         Notice, the Registration Statement shall be effective as to all Warrant
         Shares and the  prospectus  thereunder  available for use by the Holder
         for the resale all such  Warrant  Shares and the Common  Stock shall be
         listed or quoted for  trading  on the  Trading  Market.  Subject to the
         preceding  sentence,  the Holder's obligation to pay the exercise price
         for the Warrant Shares to be issued in connection  with the Call Notice
         shall be absolute and  unconditional at the time of sending of the Call
         Notice.

         4. No  Fractional  Shares  or  Scrip.  No  fractional  shares  or scrip
representing  fractional  shares  shall  be  issued  upon the  exercise  of this
Warrant.  As to any fraction of a share which Holder would otherwise be entitled
to purchase  upon such  exercise,  the Company  shall

                                       4
<PAGE>

pay a cash  adjustment  in respect of such final  fraction in an amount equal to
such fraction multiplied by the Exercise Price.

         5. Charges,  Taxes and Expenses.  Issuance of certificates  for Warrant
Shares shall be made without  charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate,  all
of which taxes and expenses shall be paid by the Company,  and such certificates
shall be  issued  in the name of the  Holder  or in such name or names as may be
directed by the Holder;  provided,  however,  that in the event certificates for
Warrant  Shares are to be issued in a name  other  than the name of the  Holder,
this  Warrant  when  surrendered  for  exercise  shall  be  accompanied  by  the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

         6. Closing of Books.  The Company will not close its stockholder  books
or records in any manner  which  prevents the timely  exercise of this  Warrant,
pursuant to the terms hereof.

         7. Transfer, Division and Combination.

                  (a) Subject to compliance with any applicable  securities laws
         and the  conditions  set forth in Sections 1 and 7(f) hereof and to the
         provisions of Section 4.1 of the Purchase  Agreement,  this Warrant and
         all  rights  hereunder  are  transferable,  in whole  or in part,  upon
         surrender  of this  Warrant  at the  principal  office of the  Company,
         together with a written assignment of this Warrant substantially in the
         form  attached  hereto  duly  executed  by the  Holder  or its agent or
         attorney and funds  sufficient  to pay any transfer  taxes payable upon
         the making of such transfer. Upon such surrender and, if required, such
         payment,  the  Company  shall  execute  and  deliver a new  Warrant  or
         Warrants  in  the  name  of  the  assignee  or  assignees  and  in  the
         denomination   or   denominations   specified  in  such  instrument  of
         assignment,  and shall issue to the  assignor a new Warrant  evidencing
         the portion of this  Warrant not so assigned,  and this  Warrant  shall
         promptly  be  cancelled.  A  Warrant,  if  properly  assigned,  may  be
         exercised  by a new holder for the purchase of Warrant  Shares  without
         having a new Warrant issued.

                  (b)  This  Warrant  may be  divided  or  combined  with  other
         Warrants  of like  tenor  and  terms  upon  presentation  hereof at the
         aforesaid  office  of  the  Company,  together  with a  written  notice
         specifying the names and  denominations in which new Warrants are to be
         issued,  signed  by the  Holder or its agent or  attorney.  Subject  to
         compliance  with Section 7(a), as to any transfer which may be involved
         in such division or combination,  the Company shall execute and deliver
         a new Warrant or Warrants in exchange for the Warrant or Warrants to be
         divided or combined in accordance with such notice.

                  (c) The Company  shall  prepare,  issue and deliver at its own
         expense  (other than transfer  taxes) the new Warrant or Warrants under
         this Section 7.

                  (d) The Company agrees to maintain,  at its aforesaid  office,
         books for the  registration  and the  registration  of  transfer of the
         Warrants.

                                       5
<PAGE>

                  (e) If,  at the  time of the  surrender  of  this  Warrant  in
         connection  with any  transfer of this  Warrant,  the  transfer of this
         Warrant shall not be registered  pursuant to an effective  registration
         statement  under  the  Securities  Act  and  under   applicable   state
         securities or blue sky laws, the Company may require, as a condition of
         allowing  such  transfer  (i) that the  Holder  or  transferee  of this
         Warrant,  as the case may be, furnish to the Company a written  opinion
         of  counsel  (which  opinion  shall be in  form,  substance  and  scope
         customary  for opinions of counsel in comparable  transactions)  to the
         effect that such  transfer may be made without  registration  under the
         Securities Act and under  applicable state securities or blue sky laws,
         (ii) that the holder or  transferee  execute and deliver to the Company
         an investment  letter in form and  substance  acceptable to the Company
         and (iii) that the transferee be an "accredited investor" as defined in
         Rule 501(a) promulgated under the Securities Act.

         8. No Rights as  Shareholder  until  Exercise.  This  Warrant  does not
entitle the Holder to any voting rights or other rights as a shareholder  of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate  Exercise Price,  the Warrant Shares so purchased shall
be and be deemed to be issued to such Holder as the record  owner of such shares
as of the  close of  business  on the  later of the  date of such  surrender  or
payment.

         9. Loss,  Theft,  Destruction  or  Mutilation  of Warrant.  The Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate  relating  to the  Warrant  Shares,  and in case of  loss,  theft or
destruction,  of indemnity or security reasonably  satisfactory to it (which, in
the case of the  Warrant,  shall not include the posting of any bond),  and upon
surrender and cancellation of such Warrant or stock  certificate,  if mutilated,
the Company  will make and deliver a new  Warrant or stock  certificate  of like
tenor  and  dated  as of such  cancellation,  in lieu of such  Warrant  or stock
certificate.

         10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the  taking of any action or the  expiration  of any right  required  or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.

         11. Adjustments of Exercise Price and Number of Warrant Shares;

                  (a) Stock  Splits,  etc.  The  number  and kind of  securities
         purchasable  upon the exercise of this  Warrant and the Exercise  Price
         shall be subject to adjustment  from time to time upon the happening of
         any of the  following.  In case the Company shall (i) pay a dividend in
         shares of Common Stock or make a distribution in shares of Common Stock
         to  holders  of  its  outstanding  Common  Stock,  (ii)  subdivide  its
         outstanding  shares of Common  Stock  into a greater  number of shares,
         (iii)  combine its  outstanding  shares of Common  Stock into a smaller
         number  of  shares of Common  Stock,  or (iv)  issue any  shares of its
         capital  stock in a  reclassification  of the  Common  Stock,  then the
         number of Warrant  Shares  purchasable  upon  exercise of this  Warrant
         immediately prior thereto shall be adjusted so that the Holder shall be
         entitled  to receive  the kind and  number of  Warrant  Shares or other
         securities  of the  Company  which it  would  have  owned or have  been

                                       6
<PAGE>

         entitled to receive had such Warrant been exercised in advance thereof.
         Upon each such  adjustment of the kind and number of Warrant  Shares or
         other  securities of the Company which are purchasable  hereunder,  the
         Holder shall  thereafter  be entitled to purchase the number of Warrant
         Shares  or  other  securities  resulting  from  such  adjustment  at an
         Exercise  Price  per  Warrant  Share  or  other  security  obtained  by
         multiplying  the  Exercise  Price in effect  immediately  prior to such
         adjustment by the number of Warrant Shares purchasable  pursuant hereto
         immediately  prior to such  adjustment  and  dividing  by the number of
         Warrant Shares or other  securities of the Company  resulting from such
         adjustment.  An adjustment made pursuant to this paragraph shall become
         effective   immediately   after  the  effective   date  of  such  event
         retroactive to the record date, if any, for such event.

                  (b)  Adjustment at One Year  Anniversary.  If, on the one year
         anniversary  date of the Purchase  Agreement,  the Company's  aggregate
         revenues  (including account  receivables) during the period commencing
         on the  Closing  Date and  ending on the  one-year  anniversary  of the
         Closing is less than $15  million,  then the  Exercise  Price  shall be
         reduced to equal $2.28,  subject to adjustment  for reverse and forward
         stock splits,  stock  dividends,  stock  combinations and other similar
         transactions  of the  Common  Stock  that  occur  after the date of the
         Purchase Agreement.

         12.   Reorganization,   Reclassification,   Merger,   Consolidation  or
Disposition  of  Assets.  In case the  Company  shall  reorganize  its  capital,
reclassify  its  capital  stock,  consolidate  or  merge  with or  into  another
corporation  (where the Company is not the surviving  corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business  to another  corporation  and,  pursuant to the terms of such
reorganization,   reclassification,  merger,  consolidation  or  disposition  of
assets, shares of common stock of the successor or acquiring corporation, or any
cash,  shares of stock or other securities or property of any nature  whatsoever
(including  warrants or other subscription or purchase rights) in addition to or
in lieu of  common  stock of the  successor  or  acquiring  corporation  ("Other
Property"),  are to be received by or distributed to the holders of Common Stock
of the Company,  then the Holder shall have the right thereafter to receive upon
exercise of this Warrant,  the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving  corporation,
and  Other  Property  receivable  upon or as a  result  of such  reorganization,
reclassification,  merger, consolidation or disposition of assets by a Holder of
the  number of shares of Common  Stock for which  this  Warrant  is  exercisable
immediately   prior  to  such  event.  In  case  of  any  such   reorganization,
reclassification,  merger, consolidation or disposition of assets, the successor
or acquiring  corporation (if other than the Company) shall expressly assume the
due and  punctual  observance  and  performance  of each and every  covenant and
condition of this  Warrant to be  performed  and observed by the Company and all
the obligations and liabilities hereunder,  subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for  adjustments of Warrant Shares
for which this Warrant is  exercisable  which shall be as nearly  equivalent  as
practicable to the adjustments  provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring  corporation" shall
include  stock of such  corporation  of any class which is not  preferred  as to
dividends or assets over any other class of stock of such  corporation and which
is  not  subject  to  redemption   and  shall  also  include  any  evidences  of
indebtedness,  shares of stock or other securities which are convertible into or
exchangeable  for any such stock,

                                       7
<PAGE>

either immediately or upon the arrival of a specified date or the happening of a
specified  event and any warrants or other  rights to subscribe  for or purchase
any such stock.  The  foregoing  provisions  of this Section 12 shall  similarly
apply to successive reorganizations,  reclassifications, mergers, consolidations
or disposition of assets.

         13.  Voluntary  Adjustment by the Company.  The Company may at any time
during the term of this Warrant  reduce the then current  Exercise  Price to any
amount and for any period of time deemed  appropriate  by the Board of Directors
of the Company.

         14.  Notice of  Adjustment.  Whenever  the number of Warrant  Shares or
number or kind of securities or other property  purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided,  the Company
shall give notice thereof to the Holder,  which notice shall state the number of
Warrant Shares (and other securities or property)  purchasable upon the exercise
of this  Warrant  and the  Exercise  Price of such  Warrant  Shares  (and  other
securities or property) after such  adjustment,  setting forth a brief statement
of the facts  requiring  such  adjustment  and setting forth the  computation by
which such adjustment was made.

         15. Notice of Corporate Action. If at any time:

                  (a) the  Company  shall  take a record of the  holders  of its
         Common Stock for the purpose of entitling them to receive a dividend or
         other  distribution,  or any right to  subscribe  for or  purchase  any
         evidences of its indebtedness,  any shares of stock of any class or any
         other securities or property, or to receive any other right, or

                  (b) there shall be any capital  reorganization of the Company,
         any  reclassification  or  recapitalization of the capital stock of the
         Company or any  consolidation  or merger of the  Company  with,  or any
         sale,  transfer or other  disposition of all or  substantially  all the
         property, assets or business of the Company to, another corporation or,

                  (c) there shall be a  voluntary  or  involuntary  dissolution,
         liquidation or winding up of the Company;

then, in any one or more of such cases,  the Company shall give to Holder (i) at
least 20 days' prior written  notice of the date on which a record date shall be
selected for such dividend,  distribution or right or for determining  rights to
vote  in  respect  of  any  such   reorganization,   reclassification,   merger,
consolidation, sale, transfer, disposition,  liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days'  prior  written  notice of the date when the same shall take  place.  Such
notice in accordance  with the foregoing  clause also shall specify (i) the date
on which  any such  record  is to be taken  for the  purpose  of such  dividend,
distribution  or right,  the date on which the holders of Common  Stock shall be
entitled  to any such  dividend,  distribution  or  right,  and the  amount  and
character  thereof,  and  (ii)  the  date  on  which  any  such  reorganization,
reclassification,    merger,   consolidation,   sale,   transfer,   disposition,
dissolution,  liquidation  or winding  up is to take place and the time,  if any
such  time is to be fixed,  as of which the  holders  of Common  Stock  shall be
entitled to exchange  their  Warrant  Shares for  securities  or other  property
deliverable upon such disposition,  dissolution,

                                       8
<PAGE>

liquidation or winding up. Each such written notice shall be sufficiently  given
if addressed  to Holder at the last address of Holder  appearing on the books of
the Company and delivered in accordance with Section 17(d).

         16. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding,  it will reserve from its authorized and unissued Common
Stock a  sufficient  number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant.  The Company
further  covenants  that its  issuance of this  Warrant  shall  constitute  full
authority  to its  officers  who are charged  with the duty of  executing  stock
certificates  to execute and issue the  necessary  certificates  for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such  reasonable  action as may be  necessary  to assure that such
Warrant  Shares  may be issued  as  provided  herein  without  violation  of any
applicable law or regulation,  or of any requirements of the Trading Market upon
which the Common Stock may be listed.

            Except and to the extent as waived or  consented  to by the  Holder,
the Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization,  transfer of assets,
consolidation,  merger,  dissolution,  issue or sale of  securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this  Warrant,  but will at all times in good  faith  assist in the
carrying  out of all such terms and in the taking of all such  actions as may be
necessary  or  appropriate  to protect the rights of Holder as set forth in this
Warrant against  impairment.  Without  limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant  Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value,  (b) take all such action as may be necessary or appropriate in order
that the Company may  validly  and  legally  issue fully paid and  nonassessable
Warrant  Shares upon the  exercise  of this  Warrant,  and (c) use  commercially
reasonable  efforts to obtain all such  authorizations,  exemptions  or consents
from any public regulatory body having jurisdiction  thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

            Before  taking any action which would result in an adjustment in the
number of Warrant

Shares for which this  Warrant is  exercisable  or in the  Exercise  Price,  the
Company shall obtain all such  authorizations or exemptions thereof, or consents
thereto,  as may be necessary from any public  regulatory  body or bodies having
jurisdiction thereof.

         17. Miscellaneous.

                  (a)  Jurisdiction.  This Warrant  shall  constitute a contract
         under the laws of New York,  without  regard  to its  conflict  of law,
         principles or rules.

                  (b)  Restrictions.  The Holder  acknowledges  that the Warrant
         Shares  acquired upon the exercise of this Warrant,  if not registered,
         will  have  restrictions  upon  resale  imposed  by state  and  federal
         securities laws.

                  (c) Nonwaiver and Expenses.  No course of dealing or any delay
         or failure to exercise any right  hereunder on the part of Holder shall
         operate  as a waiver  of such

                                       9
<PAGE>

         right or  otherwise  prejudice  Holder's  rights,  powers or  remedies,
         notwithstanding all rights hereunder terminate on the Termination Date.
         If the  Company  willfully  and  knowingly  fails  to  comply  with any
         provision of this Warrant, which results in any material damages to the
         Holder,  the  Company  shall pay to  Holder  such  amounts  as shall be
         sufficient to cover any costs and expenses  including,  but not limited
         to,   reasonable   attorneys'   fees,   including  those  of  appellate
         proceedings,  incurred by Holder in collecting any amounts due pursuant
         hereto or in otherwise enforcing any of its rights,  powers or remedies
         hereunder.

                  (d) Notices. Any notice, request or other document required or
         permitted to be given or  delivered to the Holder by the Company  shall
         be delivered in accordance  with the notice  provisions of the Purchase
         Agreement.

                  (e) Successors and Assigns.  Subject to applicable  securities
         laws,  this  Warrant and the rights and  obligations  evidenced  hereby
         shall inure to the benefit of and be binding upon the successors of the
         Company  and the  successors  and  permitted  assigns  of  Holder.  The
         provisions  of this  Warrant are  intended to be for the benefit of all
         Holders from time to time of this Warrant and shall be  enforceable  by
         any such Holder or holder of Warrant Shares.

                  (f) Amendment.  This Warrant may be modified or amended or the
         provisions  hereof  waived with the written  consent of the Company and
         the Holder.

                  (g) Severability.  Wherever  possible,  each provision of this
         Warrant  shall be  interpreted  in such manner as to be  effective  and
         valid under  applicable law, but if any provision of this Warrant shall
         be prohibited by or invalid under  applicable law, such provision shall
         be ineffective to the extent of such prohibition or invalidity, without
         invalidating   the  remainder  of  such  provisions  or  the  remaining
         provisions of this Warrant.

                  (h)  Headings.  The headings  used in this Warrant are for the
         convenience of reference only and shall not, for any purpose, be deemed
         a part of this Warrant.

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

                                       10
<PAGE>

                  IN WITNESS WHEREOF,  the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated:  August 8, 2003

                                            SPATIALIGHT, INC.

                                            By:_________________________________
                                                  Name:
                                                  Title:

                                       11
<PAGE>

                               NOTICE OF EXERCISE

To:      SpatiaLight, Inc.

         (1)______The  undersigned  hereby elects to purchase  ________  Warrant
Shares of SpatiaLight,  Inc. pursuant to the terms of the attached Warrant,  and
tenders  herewith  such  Warrant  and  payment  of the  exercise  price in full,
together with all applicable transfer taxes, if any.

         (2)______Please  issue a certificate or certificates  representing said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

----------------------------------------

The Warrant Shares shall be delivered to the following:

----------------------------------------

----------------------------------------

----------------------------------------

         (3) Accredited Investor. The undersigned is an "accredited investor" as
defined  in  Regulation  D  promulgated  under the  Securities  Act of 1933,  as
amended.

                              [PURCHASER]

                              By: ______________________________
                                    Name:
                                    Title:

                              Dated:  ________________________

                                       12
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

                  FOR  VALUE  RECEIVED,  subject  to  receipt  of the  Company's
consent,  the  foregoing  Warrant  and all rights  evidenced  thereby are hereby
assigned to

_______________________________________________ whose address is

-----------------------------------------------

                           Dated:  ______________, ____________

                           Holder's Signature: ________________

                           Holder's Address:___________________

Signature Guaranteed:  ________________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

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