Document:

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                                                                     EXHIBIT 4.4

                   [Letterhead of Gottbetter & Partners, LLP]

September 16, 2003

Mr. Gary F. McNear Hy-Tech Technology Group, Inc. 1840 Boy Scout Drive
Fort Myers, FL 33907

         RE:      MODIFIED RETAINER AGREEMENT

Dear Mr. McNear:

         Please  accept  this letter as  confirmation  that  Hy-Tech  Technology
Group, Inc. (the "Company"),  has agreed to modify the retainer  agreement dated
May 15,  2003 (the  "Retainer")  between the  Company  and Kaplan  Gottbetter  &
Levenson,  LLP.  ("KGL"),  the successor  firm of which is Gottbetter & Parners,
LLP. ("G&P").  The modification is to take effect as of even date herewith.  The
modification,  which  we  understand  was  approved  by the  Company's  Board of
Directors,  is for the  Company  to pay part of its  outstanding  bill for legal
services with shares of the Company's common stock, $.001 par value.

         We understand  that part of the  outstanding  bill will be satisfied by
the issuance of 2,106,000 shares valued at $124,254.  The board of directors has
approved the filing of a registration  on Form S-8 for these  2,106,000  shares.
The legal services for which these shares are being  registered and subsequently
issued to Adam S. Gottbetter,  a partner of G&P, did not include any services in
connection   with  the  offer  or  sale  of  securities  in  a  capital  raising
transaction, and did not directly or indirectly promote or maintain a market for
the Company's securities.

         Please  note that this  letter  may be filed as an  exhibit to the Form
S-8. In order to effectuate the  modification of the Retainer,  please sign this
letter and return it to my office. If you have any questions, please call me.

Sincerely,

/S/ GOTTBETTER & PARTNERS, LLP

GOTTBETTER & PARTNERS, LLP

ACCEPTED AND AGREED:

HY-TECH TECHNOLOGY GROUP, INC.

By: /s/ GARY F. MCNEAR
    --------------------------------
Name: Gary F. McNear
Title: CEO<PAGE>

                                                                     EXHIBIT 4.2

                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

                              OF TEGAL CORPORATION

It is hereby certified that:

1. The name of the Corporation  (hereinafter  called the "Corporation") is Tegal
Corporation.

2. The Certificate of  Incorporation is hereby amended by striking out the first
sentence of Article FOURTH thereof and by  substituting in lieu of said sentence
the following new sentence:

                  "FOURTH:  The total number of shares of all classes of capital
                  stock which the  Corporation  shall have authority to issue is
                  One Hundred  Five  Million  shares,  comprised  of One Hundred
                  Million (100,000,000) shares of Common Stock, with a par value
                  of  One  Cent  (U.S.   $0.01)  per  share,  and  Five  Million
                  (5,000,000) shares of Preferred Stock, with a par value of One
                  Cent (U.S. $0.01) per share.

3. The  amendment of the  Certificate  of  Incorporation  herein  certified  was
submitted to the  stockholders  of the  Corporation and was duly approved by the
required  vote  of  stockholders  of the  Corporation  in  accordance  with  the
provisions of Sections 222 and 242 of the General  Corporation  Law of the State
of Delaware.  The total number of outstanding shares entitled to vote or consent
to this  Amendment  was  16,099,949  shares of Common  Stock.  A majority of the
outstanding shares of Common Stock,  voting together as a single class, voted in
favor of this Certificate of Amendment.  The vote required was a majority of the
outstanding shares of Common Stock, voting together as a single class.

     IN WITNESS  WHEREOF,  Tegal  Corporation  has caused  this  Certificate  of
Amendment to be signed by its Chief Executive Officer as of September 9, 2003.

                                        /s/ Michael L. Parodi
                                        ------------------------------------
                                        Michael L. Parodi
                                        President and Chief Executive OfficerSECURITIES PURCHASE AGREEMENT

         This Securities  Purchase  Agreement (this  "Agreement") is dated as of
August 8, 2003, among SpatiaLight, Inc., a New York corporation (the "Company"),
and the purchasers  identified on the signature pages hereto (each a "Purchaser"
and collectively the "Purchasers"); and

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined below),
and Rule 506  promulgated  thereunder,  the Company desires to issue and sell to
the  Purchasers,  and each  Purchaser,  severally  and not  jointly,  desires to
purchase  from the Company in the  aggregate,  up to $2,850,000 of the Company's
Common Stock and certain  Warrants,  as more fully  described in this Agreement;
provided that such  aggregate  purchase price shall be reduced to the extent the
aggregate  number of Shares and  Warrant  Shares  does not  exceed  19.9% of the
Company's issued and outstanding Common Stock on the Closing Date.

         NOW,  THEREFORE,  IN CONSIDERATION of the mutual covenants contained in
this Agreement,  and for other good and valuable  consideration  the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

                                   ARTICLE I.
                                   DEFINITIONS

         1.1  Definitions.  In addition to the terms  defined  elsewhere in this
Agreement,  for all purposes of this  Agreement,  the  following  terms have the
meanings indicated in this Section 1.1:

                  "Action"  shall  have the  meaning  ascribed  to such  term in
         Section 3.1(j).

                  "Affiliate"  means any Person  that,  directly  or  indirectly
         through one or more intermediaries,  controls or is controlled by or is
         under  common  control  with a  Person  as such  terms  are used in and
         construed  under Rule 144. With respect to a Purchaser,  any investment
         fund or managed account that is managed on a discretionary basis by the
         same  investment  manager  as such  Purchaser  will be  deemed to be an
         Affiliate of such Purchaser.

                  "Business Day" means any day except  Saturday,  Sunday and any
         day which shall be a federal  legal  holiday or a day on which  banking
         institutions in the State of New York are authorized or required by law
         or other governmental action to close.

                  "Closing"  means the closing of the  purchase  and sale of the
         Common Stock and Warrant pursuant to Section 2.1(a).

                  "Closing Date" means the date of the Closing.

                  "Closing  Price"  means  on any  particular  date (a) the last
         reported  closing  price per share of Common  Stock on such date on the
         Trading  Market (as  reported  by  Bloomberg  L.P. at 4:15 PM (New York
         time),  or (b) if there is no such price on such date, then the closing
         price on the Trading Market on the date nearest preceding such date

<PAGE>

         (as  reported  by  Bloomberg  L.P.  at 4:15 PM (New York  time) for the
         closing price for regular  session  trading on such day), or (c) if the
         Common Stock is not then listed or quoted on the Trading  Market and if
         prices  for the Common  Stock are then  reported  in the "pink  sheets"
         published by the National  Quotation Bureau  Incorporated (or a similar
         organization  or  agency  succeeding  to  its  functions  of  reporting
         prices),  the most  recent bid price per share of the  Common  Stock so
         reported,  or (d) if the shares of Common  Stock are not then  publicly
         traded the fair market value of a share of Common  Stock as  determined
         by an appraiser  selected in good faith by the Purchasers of a majority
         in interest of the Shares then outstanding.

                  "Commission" means the Securities and Exchange Commission.

                  "Common  Stock" means the common  stock of the Company,  $0.01
         par value per share,  and any  securities  into which such common stock
         may hereafter be reclassified.

                  "Common Stock Equivalents" means any securities of the Company
         or the  Subsidiaries  which would entitle the holder thereof to acquire
         at any time  Common  Stock,  including  without  limitation,  any debt,
         preferred stock, rights, options,  warrants or other instrument that is
         at any time convertible into or exchangeable for, or otherwise entitles
         the holder thereof to receive, Common Stock.

                  "Disclosure Schedules" means the Disclosure Schedules attached
         as Annex I hereto.

                  "Effective   Date"  means  the  date  that  the   Registration
         Statement is first declared effective by the Commission.

                  "Escrow  Agent" shall have the meaning set forth in the Escrow
         Agreement.

                  "Escrow   Agreement"   shall  mean  the  Escrow  Agreement  in
         substantially  the form of  Exhibit  A hereto  executed  and  delivered
         contemporaneously with this Agreement.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
         amended.

                  "Intellectual Property Rights" shall have the meaning ascribed
         to such term in Section 3.1(o).

                  "Liens" means a lien, charge, security interest,  encumbrance,
         right of first refusal or other restriction.

                  "Material  Adverse Effect" shall have the meaning  ascribed to
         such term in Section 3.1(b).

                  "Material  Permits"  shall have the  meaning  ascribed to such
         term in Section 3.1(m).

                  "Per Share Purchase Price" equals $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 this Agreement.

<PAGE>

                  "Person"  means an  individual  or  corporation,  partnership,
         trust,  incorporated  or  unincorporated  association,  joint  venture,
         limited  liability  company,  joint stock  company,  government  (or an
         agency or subdivision thereof) or other entity of any kind.

                  "Purchase  Agreement"  shall have the meaning ascribed to such
         term in Section 3.1(g).

                  "Registration   Statement"  means  a  registration   statement
         meeting the requirements set forth in the Registration Rights Agreement
         and covering the resale by the Purchasers of the Shares and the Warrant
         Shares.

                  "Registration  Rights Agreement" means the Registration Rights
         Agreement,  dated as of the date of this  Agreement,  among the Company
         and each Purchaser, in the form of Exhibit B hereto.

                  "Rule  144,"  means  Rule 144  promulgated  by the  Commission
         pursuant to the Securities  Act, as such Rules 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.

                  "SEC Reports" shall have the meaning  ascribed to such term in
         Section 3.1(h).

                  "Securities"  means the Shares,  the  Warrants and the Warrant
         Shares.

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

                  "Shares"  means the shares of Common  Stock issued or issuable
         to each Purchaser  pursuant to this Agreement  other than the shares of
         Common Stock issuable pursuant to Section 4.9.

                  "Subscription  Amount"  means,  as to each  Purchaser  and the
         Closing,  the amounts set forth below such Purchaser's  signature block
         on  the  signature  page  hereto,  in  United  States  dollars  and  in
         immediately available funds.

                  "Subsidiary"  shall have the meaning  ascribed to such term in
         Section 3.1(a).

                  "Trading  Day"  means (i) a day on which the  Common  Stock is
         traded on a Trading  Market,  or (ii) if the Common Stock is not listed
         on a Trading  Market,  a day on which the Common Stock is traded on the
         over-the-counter  market,  as reported by the OTC  Bulletin  Board,  or
         (iii) if the Common  Stock is not quoted on the OTC Bulletin  Board,  a
         day on which the Common Stock is quoted in the over-the-counter  market
         as reported  by the  National  Quotation  Bureau  Incorporated  (or any
         similar  organization  or agency  succeeding its functions of reporting
         prices);  provided,  that in the  event  that the  Common  Stock is not
         listed  or quoted as set  forth in (i),  (ii) and  (iii)  hereof,  then
         Trading Day shall mean a Business Day.

                  "Trading  Market" means the following  markets or exchanges on
         which the Common  Stock is listed or quoted for  trading on the date in
         question: the American Stock

<PAGE>

         Exchange,  the New York Stock  Exchange,  the Nasdaq National Market or
         the Nasdaq SmallCap Market.

                  "Transaction Documents" means this Agreement, the Registration
         Rights  Agreement,  the Escrow  Agreement,  the  Warrants and any other
         documents or agreements  executed in connection  with the  transactions
         contemplated hereunder.

                  "Warrants"  means the Common Stock Purchase  Warrants,  in the
         form of Exhibit C, issuable to the  Purchasers  at the Closing,  with a
         term of  exercise  of 5 years  and an  exercise  price  equal to $3.29,
         subject to adjustment therein.

                  "Warrant  Shares"  means the shares of Common  Stock  issuable
         upon exercise of the Warrants.

                                  ARTICLE II.
                                PURCHASE AND SALE

         2.1 Closing. At the Closing,  the Purchasers shall purchase,  severally
and not jointly,  and the Company shall issue and sell, in the aggregate,  up to
$2,850,000 of Common Stock, together with the Warrants;  provided, however, that
such  aggregate  purchase  price  shall be reduced  to the extent the  aggregate
number of Shares  and  Warrant  Shares  does not exceed  19.9% of the  Company's
issued and  outstanding  Common  Stock on the  Closing  Date.  If the  aggregate
purchase price is reduced on account of the preceding sentence, each Purchaser's
Subscription Amount shall be reduced ratably with the other Purchasers.  Subject
to the preceding sentence,  each Purchaser shall purchase from the Company,  and
the Company shall issue and sell to each Purchaser, (a) a number of Shares equal
to such Purchaser's  Subscription Amount divided by the Per Share Purchase Price
and (b) the Warrants as determined pursuant to Section 2.2(a). Upon satisfaction
of the  conditions  set forth in Section  2.2,  the  Closing  shall occur at the
offices of the  Escrow  Agent,  or such  other  location  as the  parties  shall
mutually agree.

         2.2 Closing Conditions.

                  (a) At the Closing the  Company  shall  deliver or cause to be
         delivered  to  the  Escrow  Agent  on  behalf  of  each  Purchaser  the
         following:

                           (i) this Agreement duly executed by the Company;

                           (ii) a  certificate  evidencing  a number  of  Shares
                  equal to such Purchaser's  Subscription  Amount divided by the
                  Per  Share  Purchase  Price,  registered  in the  name of such
                  Purchaser;

                           (iii) the Registration Rights Agreement duly executed
                  by the Company;

                           (iv)  the  Escrow  Agreement,  duly  executed  by the
                  Company; and

                           (v)  a  Warrant,  registered  in  the  name  of  such
                  Purchaser,  pursuant  to which such  Purchaser  shall have the
                  right to acquire  up to the  number of shares of Common  Stock
                  equal to 25% of the Shares to be issued to such  Purchaser  at
                  the Closing.

<PAGE>

                  (b) At the Closing each Purchaser shall deliver or cause to be
         delivered to the Escrow Agent the following:

                           (i) this Agreement duly executed by such;

                           (ii) such Purchaser's  Subscription Amount as to such
                  Closing by wire transfer to the account of the Escrow Agent;

                           (iii) the Escrow  Agreement,  duly  executed  by such
                  Purchaser; and

                           (iv) the Registration  Rights Agreement duly executed
                  by such Purchaser.

                  (c) All  representations  and  warranties  of the other  party
         contained herein shall remain true and correct as of the Closing Date.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

         3.1 Representations and Warranties of the Company.  Except as set forth
in the  SEC  Reports  or  under  the  corresponding  section  of the  Disclosure
Schedules  delivered   concurrently  herewith,  the  Company  hereby  makes  the
following  representations  and  warranties  as of the date hereof and as of the
Closing Date to each Purchaser:

                  (a) Subsidiaries.  Other than SpatiaLight Technologies,  Inc.,
         the Company has no direct or indirect  subsidiaries.  The Company owns,
         directly or  indirectly,  all of the capital  stock of each  Subsidiary
         free and clear of any lien,  charge,  security  interest,  encumbrance,
         right of first refusal or other  restriction  (collectively,  "Liens"),
         and all the issued  and  outstanding  shares of  capital  stock of each
         Subsidiary  are validly issued and are fully paid,  non-assessable  and
         free  of  preemptive  and  similar  rights.   If  the  Company  has  no
         subsidiaries,  then  references  in the  Transaction  Documents  to the
         Subsidiaries will be disregarded.

                  (b)  Organization and  Qualification.  Each of the Company and
         the Subsidiaries is an entity duly incorporated or otherwise organized,
         validly   existing  and  in  good  standing   under  the  laws  of  the
         jurisdiction of its incorporation or organization (as applicable), with
         the  requisite  power and authority to own and use its  properties  and
         assets and to carry on its business as currently conducted. Neither the
         Company nor any  Subsidiary is in violation of any of the provisions of
         its  respective  certificate  or articles of  incorporation,  bylaws or
         other organizational or charter documents.  Each of the Company and the
         Subsidiaries  is duly  qualified  to  conduct  business  and is in good
         standing as a foreign  corporation or other entity in each jurisdiction
         in which the nature of the business  conducted or property  owned by it
         makes such qualification  necessary,  except where the failure to be so
         qualified  or in good  standing,  as the case may be, would not have or
         reasonably  be expected to result in (i) a material  adverse  effect on
         the legality,  validity or enforceability of any Transaction  Document,
         (ii) a material  adverse effect on the results of  operations,  assets,
         business or financial  condition  of the Company and the  Subsidiaries,
         taken as a whole,  or (iii) adversely  impair the Company's  ability to

<PAGE>

         perform in any material respect on a timely basis its obligations under
         any  Transaction  Document  (any of (i),  (ii) or  (iii),  a  "Material
         Adverse Effect").

                  (c) Authorization;  Enforcement. The Company has the requisite
         corporate  power and  authority  to enter  into and to  consummate  the
         transactions  contemplated  by each of the  Transaction  Documents  and
         otherwise to carry out its  obligations  thereunder.  The execution and
         delivery of each of the  Transaction  Documents  by the Company and the
         consummation by it of the transactions  contemplated  thereby have been
         duly authorized by all necessary  action on the part of the Company and
         no further  action is required by the Company in connection  therewith.
         Each  Transaction  Document has been (or upon  delivery will have been)
         duly executed by the Company and, when delivered in accordance with the
         terms hereof,  will constitute the valid and binding  obligation of the
         Company  enforceable  against the Company in accordance  with its terms
         except   (i)  as   limited  by   applicable   bankruptcy,   insolvency,
         reorganization,  moratorium  and  other  laws  of  general  application
         affecting  enforcement  of  creditors'  rights  generally  and  (ii) as
         limited by laws relating to the  availability of specific  performance,
         injunctive relief or other equitable remedies.

                  (d) No Conflicts.  The execution,  delivery and performance of
         the  Transaction  Documents by the Company and the  consummation by the
         Company of the  transactions  contemplated  thereby do not and will not
         (i)  conflict  with or violate any  provision  of the  Company's or any
         Subsidiary's certificate or articles of incorporation,  bylaws or other
         organizational  or  charter  documents,   or  (ii)  conflict  with,  or
         constitute  a default (or an event that with notice or lapse of time or
         both  would  become a default)  under,  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  Company  or  Subsidiary  debt or
         otherwise)  or  other   understanding  to  which  the  Company  or  any
         Subsidiary  is a party or by which any property or asset of the Company
         or any Subsidiary is bound or affected,  or (iii) result in a violation
         of any law, rule, regulation,  order, judgment,  injunction,  decree or
         other  restriction of any court or governmental  authority to which the
         Company  or a  Subsidiary  is  subject  (including  federal  and  state
         securities laws and regulations),  or by which any property or asset of
         the Company or a Subsidiary is bound or affected; except in the case of
         each of clauses (ii) and (iii), such as would not have or reasonably be
         expected to result in a Material Adverse Effect.

                  (e)  Filings,  Consents  and  Approvals.  The  Company  is not
         required to obtain any consent, waiver, authorization or order of, give
         any notice to, or make any filing or  registration  with,  any court or
         other federal,  state, local or other  governmental  authority or other
         Person in connection  with the execution,  delivery and  performance by
         the  Company of the  Transaction  Documents,  other than (a) the filing
         with the Commission of the Registration  Statement,  the application(s)
         to each Trading Market for the listing of the Shares and Warrant Shares
         for  trading  thereon  in the time and  manner  required  thereby,  and
         applicable Blue Sky filings,  (b) such as have already been obtained or
         such  exemptive  filings as are  required  to be made under  applicable
         securities  laws,  (c) such other filings as may be required  following
         the  Closing  Date  under the  Securities  Act,  the  Exchange  Act and
         corporate law.

<PAGE>

                  (f)  Issuance  of the  Securities.  The  Securities  are  duly
         authorized  and,  when  issued  and  paid  for in  accordance  with the
         Transaction Documents,  will be duly and validly issued, fully paid and
         nonassessable,  free and clear of all Liens.  The Company has  reserved
         from its duly authorized  capital stock the maximum number of shares of
         Common Stock issuable pursuant to this Agreement and the Warrants.

                  (g)  Capitalization.  Since  the  date of the  Company's  most
         recent periodic  report filed with the Commission,  the Company has not
         issued  any  capital  stock  other than  pursuant  to the  exercise  of
         employee  stock  options under the  Company's  stock option plans,  the
         issuance  of shares  of  capital  stock to  employees  pursuant  to the
         Company's  employee  stock purchase plan, the issuance of capital stock
         pursuant to grants under time accelerated restricted stock award plans,
         pursuant to the  conversion  or exercise of  outstanding  Common  Stock
         Equivalents,  and in connection with the Securities Purchase Agreement,
         dated as of May 14, 2003, among the Company and the purchasers  thereto
         (the "Purchase Agreement"). No Person has ------------------- any right
         of first refusal,  preemptive  right,  right of  participation,  or any
         similar right to participate in the  transactions  contemplated  by the
         Transaction  Documents.  Except as a result of the purchase and sale of
         the  Securities,  there are no outstanding  options,  warrants,  script
         rights  to  subscribe  to,  calls  or   commitments  of  any  character
         whatsoever   relating  to,  or   securities,   rights  or   obligations
         convertible into or exchangeable for, or giving any Person any right to
         subscribe  for or acquire,  any shares of Common  Stock,  or contracts,
         commitments, understandings or arrangements by which the Company or any
         Subsidiary is or may become bound to issue additional  shares of Common
         Stock, or securities or rights  convertible or exchangeable into shares
         of Common Stock,  other than in connection with the Purchase  Agreement
         and the  Company's  stock  option  plans.  The  issue  and  sale of the
         Securities  will not  obligate  the  Company to issue  shares of Common
         Stock or other securities to any Person (other than the Purchasers) and
         will not  result in a right of any  holder  of  Company  securities  to
         adjust the  exercise,  conversion,  exchange  or reset price under such
         securities.

                  (h) SEC Reports;  Financial Statements.  The Company has filed
         all reports required to be filed by it under the Securities Act and the
         Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for
         the two years  preceding the date hereof (or such shorter period as the
         Company  was  required  by law to file such  material)  (the  foregoing
         materials,  including the exhibits thereto, being collectively referred
         to  herein  as the "SEC  Reports"  and,  together  with the  Disclosure
         Schedules to this Agreement,  the  "Disclosure  Materials") on a timely
         basis or has received a valid  extension of such time of filing and has
         filed  any  such  SEC  Reports  prior  to the  expiration  of any  such
         extension.  As of their  respective  dates, the SEC Reports complied in
         all material  respects with the  requirements of the Securities Act and
         the  Exchange  Act and the  rules  and  regulations  of the  Commission
         promulgated  thereunder,  and  none of the  SEC  Reports,  when  filed,
         contained any untrue statement of a material fact or omitted to state a
         material  fact  required to be stated  therein or necessary in order to
         make the statements  therein, in light of the circumstances under which
         they were made, not misleading. The financial statements of the Company
         included  in the SEC  Reports  comply  in all  material  respects  with
         applicable accounting requirements and the rules and regulations of the
         Commission  with  respect  thereto  as in effect at the time of filing.
         Such  financial  statements  have  been  prepared  in  accordance  with
         generally accepted accounting  principles applied on a

<PAGE>

         consistent basis during the periods involved ("GAAP"), except as may be
         otherwise  specified in such financial  statements or the notes thereto
         and except  that  unaudited  financial  statements  may not contain all
         footnotes required by GAAP, and fairly present in all material respects
         the financial position of the Company and its consolidated subsidiaries
         as of and for the dates thereof and the results of operations  and cash
         flows for the periods  then ended,  subject,  in the case of  unaudited
         statements, to normal, immaterial, year-end audit adjustments.

                  (i)  Material  Changes.  Since the date of the latest  audited
         financial  statements  included  within  the  SEC  Reports,  except  as
         disclosed in the SEC Reports,  (i) there has been no event,  occurrence
         or  development  that has had or that could  reasonably  be expected to
         result in a Material Adverse Effect,  (ii) the Company has not incurred
         any liabilities (contingent or otherwise) other than (A) trade payables
         and  accrued  expenses  incurred  in the  ordinary  course of  business
         consistent  with past practice and (B)  liabilities  not required to be
         reflected in the  Company's  financial  statements  pursuant to GAAP or
         required to be disclosed in filings made with the Commission, and (iii)
         the Company has not altered its method of accounting,  (iv) the Company
         has not declared or made any dividend or  distribution of cash or other
         property  to its  stockholders  or  purchased,  redeemed  or  made  any
         agreements  to purchase  or redeem any shares of its capital  stock and
         (v) the Company has not issued any equity  securities  to any  officer,
         director or Affiliate, except pursuant to existing Company stock option
         plans and in connection with the Purchase  Agreement.  The Company does
         not have pending  before the  Commission  any request for  confidential
         treatment of information.

                  (j) Litigation.  Except as disclosed in the SEC Reports, there
         is no  action,  suit,  inquiry,  notice  of  violation,  proceeding  or
         investigation  pending or, to the knowledge of the Company,  threatened
         against  or  affecting  the  Company,  any  Subsidiary  or any of their
         respective properties before or by any court, arbitrator,  governmental
         or  administrative  agency or  regulatory  authority  (federal,  state,
         county,  local  or  foreign)  (collectively,  an  "Action")  which  (i)
         adversely  affects  or  challenges  the  legality,  validity  ------ or
         enforceability of any of the Transaction Documents or the Securities or
         (ii) could, if there were an unfavorable  decision,  have or reasonably
         be expected to result in a Material Adverse Effect. Neither the Company
         nor any Subsidiary, nor any director or officer thereof, is or has been
         the  subject  of any  Action  involving  a  claim  of  violation  of or
         liability  under federal or state  securities laws or a claim of breach
         of  fiduciary  duty.  There has not been,  and to the  knowledge of the
         Company, there is not pending or contemplated, any investigation by the
         Commission  involving the Company or any current or former  director or
         officer of the Company. The Commission has not issued any stop order or
         other order suspending the effectiveness of any registration  statement
         filed by the Company or any  Subsidiary  under the  Exchange Act or the
         Securities Act.

                  (k) Labor  Relations.  No material labor dispute exists or, to
         the  knowledge of the Company,  is imminent  with respect to any of the
         employees of the Company  which could  reasonably be expected to result
         in a Material Adverse Effect.

                  (l)  Compliance.  Except  as  disclosed  in the  SEC  Reports,
         neither the Company nor any  Subsidiary  (i) is in default  under or in
         violation of (and no event has occurred  that has not been waived that,
         with notice or lapse of time or both,  would result

<PAGE>

         in a default  by the  Company  or any  Subsidiary  under),  nor has the
         Company  or any  Subsidiary  received  notice of a claim  that it is in
         default  under or that it is in violation  of, any  indenture,  loan or
         credit  agreement or any other agreement or instrument to which it is a
         party or by which it or any of its  properties is bound (whether or not
         such default or violation has been waived), (ii) is in violation of any
         order of any court, arbitrator or governmental body, or (iii) is or has
         been  in  violation  of  any  statute,   rule  or   regulation  of  any
         governmental  authority,  including  without  limitation  all  foreign,
         federal, state and local laws applicable to its business, except in the
         case of clauses (i),  (ii) and (iii) as would not have or reasonably be
         expected to result in a Material Adverse Effect.

                  (m)  Regulatory  Permits.  The  Company  and the  Subsidiaries
         possess all  certificates,  authorizations  and  permits  issued by the
         appropriate  federal,  state, local or foreign  regulatory  authorities
         necessary to conduct  their  respective  businesses as described in the
         SEC Reports, except where the failure to possess such permits would not
         have or reasonably be expected to result in a Material  Adverse  Effect
         ("Material  Permits"),  and neither the Company nor any  Subsidiary has
         received  any  notice of  proceedings  relating  to the  revocation  or
         modification of any Material Permit.

                  (n) Title to Assets.  The  Company and the  Subsidiaries  have
         good and  marketable  title in fee simple to all real property owned by
         them  that  is  material  to  the  business  of  the  Company  and  the
         Subsidiaries  and good and  marketable  title in all personal  property
         owned by them that is material  to the  business of the Company and the
         Subsidiaries,  in each  case free and clear of all  Liens,  except  for
         Liens as do not materially affect the value of such property and do not
         materially  interfere with the use made and proposed to be made of such
         property by the Company and the  Subsidiaries and Liens for the payment
         of  federal,  state or other  taxes,  the  payment  of which is neither
         delinquent  nor subject to penalties.  Any real property and facilities
         held under lease by the Company and the  Subsidiaries  are held by them
         under valid, subsisting and enforceable leases of which the Company and
         the Subsidiaries are in compliance.

                  (o) Patents and  Trademarks.  To the  knowledge of the Company
         and each  Subsidiary,  the Company and the  Subsidiaries  have, or have
         rights to use, all patents, patent applications,  trademarks, trademark
         applications,  service  marks,  trade names,  copyrights,  licenses and
         other  similar  rights  that  are  necessary  or  material  for  use in
         connection  with their  respective  businesses  as described in the SEC
         Reports  and which the failure to so have could have or  reasonably  be
         expected  to result in a Material  Adverse  Effect  (collectively,  the
         "Intellectual Property Rights"). Neither the Company nor any Subsidiary
         has received a written  notice that the  Intellectual  Property  Rights
         used by the Company or any  Subsidiary  violates or infringes  upon the
         rights  of any  Person.  To the  knowledge  of the  Company,  all  such
         Intellectual Property Rights are enforceable.

                  (p) Insurance. The Company and the Subsidiaries are insured by
         insurers of recognized financial responsibility against such losses and
         risks  and  in  such  amounts  as  are  prudent  and  customary  in the
         businesses  in which the  Company  and the  Subsidiaries  are  engaged.
         Neither the Company nor any  Subsidiary  has any reason to believe that
         it will not be able to renew its  existing  insurance  coverage  as and
         when such coverage  expires or to obtain similar  coverage from similar
         insurers  as may be  necessary  to  continue  its  business  without  a
         significant increase in cost.

<PAGE>

                  (q) Transactions With Affiliates and Employees.  Except as set
         forth in the SEC Reports  and except in  connection  with the  Purchase
         Agreement, none of the officers or directors of the Company and, to the
         knowledge  of the  Company,  none of the  employees  of the  Company is
         presently a party to any transaction with the Company or any Subsidiary
         (other  than  for  services  as  employees,  officers  and  directors),
         including any contract,  agreement or other  arrangement  providing for
         the  furnishing  of services to or by,  providing for rental of real or
         personal  property to or from,  or otherwise  requiring  payments to or
         from any officer, director or such employee or, to the knowledge of the
         Company,  any  entity  in  which  any  officer,  director,  or any such
         employee has a substantial interest or is an officer, director, trustee
         or  partner,  in each  case in  excess of  $60,000  other  than (a) for
         payment  of  salary  or  consulting  fees for  services  rendered,  (b)
         reimbursement  for  expenses  incurred on behalf of the Company and (c)
         for other employee  benefits,  including stock option  agreements under
         any stock option plan of the Company.

                  (r) Internal Accounting Controls.  The Company and each of its
         subsidiaries   maintains  a  system  of  internal  accounting  controls
         sufficient to provide  reasonable  assurance that (i)  transactions are
         executed  in   accordance   with   management's   general  or  specific
         authorizations,  (ii)  transactions are recorded as necessary to permit
         preparation  of financial  statements  in  conformity  with GAAP and to
         maintain asset accountability, (iii) access to assets is permitted only
         in accordance with management's general or specific authorization,  and
         (iv) the  recorded  accountability  for  assets  is  compared  with the
         existing assets at reasonable intervals and appropriate action is taken
         with respect to any differences. The Company has established disclosure
         controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
         15d-15(e)) for the Company and designed such  disclosures  controls and
         procedures to ensure that material information relating to the Company,
         including its subsidiaries, is made known to the certifying officers by
         others within those entities,  particularly  during the period in which
         the Company's Form 10-K or 10-Q, as the case may be, is being prepared.
         The Company's  certifying  officers have evaluated the effectiveness of
         the Company's controls and procedures as of a date within 90 days prior
         to the filing date of the Form 10-Q for the quarter ended June 30, 2003
         (such date, the "Evaluation  Date").  The Company presented in its most
         recently filed Form 10-K or Form 10-Q the ----------------- conclusions
         of the certifying  officers about the  effectiveness  of the disclosure
         controls and procedures based on their evaluations as of the Evaluation
         Date. Since the Evaluation Date, there have been no significant changes
         in the Company's internal controls or, to the Company's  knowledge,  in
         other factors that could  significantly  affect the Company's  internal
         controls.

                  (s) Private Placement. Assuming the accuracy of the Purchasers
         representations   and   warranties   set  forth  in  Section   3.2,  no
         registration  under the  Securities  Act is required  for the offer and
         sale of the Securities by the Company to the Purchasers as contemplated
         hereby.

                  (t) Listing and Maintenance Requirements. The Company has not,
         in the 12 months  preceding the date hereof,  received  notice from any
         Trading  Market  on which  the  Common  Stock is or has been  listed or
         quoted to the effect  that the  Company is not in  compliance  with the
         listing or maintenance requirements of such Trading Market.

<PAGE>

                  (u) No Integrated Offering.  Other than in connection with the
         Purchase Agreement, neither the Company, nor any of its affiliates, nor
         any Person acting on its or their behalf has,  directly or  indirectly,
         made any offers or sales of any security or solicited any offers to buy
         any security, under circumstances that would cause this offering of the
         Securities  to be  integrated  with prior  offerings by the Company for
         purposes of the Securities Act or any applicable  shareholder  approval
         provisions,   including,   without  limitation,  under  the  rules  and
         regulations of any exchange or automated  quotation system on which any
         of the securities of the Company are listed or designated.

         3.2  Representations  and Warranties of the Purchasers.  Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

                  (a) Organization;  Authority. Such Purchaser is an entity duly
         organized,  validly existing and in good standing under the laws of the
         jurisdiction  of  its  organization  with  full  right,   corporate  or
         partnership  power and  authority to enter into and to  consummate  the
         transactions contemplated by the Transaction Documents and otherwise to
         carry out its  obligations  thereunder.  The  execution,  delivery  and
         performance by such Purchaser of the transactions  contemplated by this
         Agreement has been duly authorized by all necessary corporate action on
         the part of such Purchaser.  Each  Transaction  Document to which it is
         party has been duly executed by such  Purchaser,  and when delivered by
         such  Purchaser in accordance  with terms hereof,  will  constitute the
         valid and legally  binding  obligation of such  Purchaser,  enforceable
         against it in accordance with its terms.

                  (b) Investment  Intent.  Such Purchaser  understands  that the
         Securities are  "restricted  securities"  and have not been  registered
         under the Securities Act or any applicable  state securities law and is
         acquiring  the   Securities  as  principal  for  its  own  account  for
         investment  purposes only and not with a view to or for distributing or
         reselling such Securities or any part thereof, has no present intention
         of  distributing  any of  such  Securities  and has no  arrangement  or
         understanding with any other persons regarding the distribution of such
         Securities  (this   representation   and  warranty  not  limiting  such
         Purchaser's  right to sell the Securities  pursuant to the Registration
         Statement or otherwise in compliance with applicable  federal and state
         securities laws). Such Purchaser is acquiring the Securities  hereunder
         in the ordinary  course of its business.  Such  Purchaser does not have
         any agreement or understanding, directly or indirectly, with any Person
         to distribute any of the Securities.

                  (c) Purchaser  Status.  At the time such Purchaser was offered
         the  Securities,  it was,  and at the date hereof it is an  "accredited
         investor"  as defined in Rule 501(a)  under the  Securities  Act.  Such
         Purchaser is not required to be  registered  as a  broker-dealer  under
         Section 15 of the Exchange Act.

                  (d) Experience of such Purchaser. Such Purchaser, either alone
         or   together   with   its   representatives,   has   such   knowledge,
         sophistication  and experience in business and financial  matters so as
         to be capable  of  evaluating  the merits and risks of the  prospective
         investment in the Securities, and has so evaluated the merits and risks
         of such

<PAGE>

         investment.  Such  Purchaser  is able to bear the  economic  risk of an
         investment  in the  Securities  and,  at the present  time,  is able to
         afford a complete loss of such investment.

                  (e) General Solicitation. Such Purchaser is not purchasing the
         Securities as a result of any advertisement,  article,  notice or other
         communication  regarding  the  Securities  published in any  newspaper,
         magazine or similar  media or  broadcast  over  television  or radio or
         presented at any seminar or any other general  solicitation  or general
         advertisement.

                  (f) Access to Information. Such Purchaser acknowledges that it
         has reviewed the  Disclosure  Materials  and has been  afforded (i) the
         opportunity to ask such questions as it has deemed necessary of, and to
         receive  answers from,  representatives  of the Company  concerning the
         terms and  conditions of the offering of the  Securities and the merits
         and risks of investing in the  Securities;  (ii) access to  information
         about the Company and the Subsidiaries  and their respective  financial
         condition, results of operations, business, properties,  management and
         prospects sufficient to enable it to evaluate its investment; and (iii)
         the opportunity to obtain such additional  information that the Company
         possesses or can acquire without unreasonable effort or expense that is
         necessary to make an informed  investment  decision with respect to the
         investment.   Neither  such  inquiries  nor  any  other   investigation
         conducted by or on behalf of such Purchaser or its  representatives  or
         counsel shall modify, amend or affect such Purchaser's right to rely on
         the truth,  accuracy and  completeness of the Disclosure  Materials and
         the  Company's   representations   and  warranties   contained  in  the
         Transaction Documents.

                  (g)  International   Actions.  Such  Purchaser   acknowledges,
         represents  and agrees  that no action has been or will be taken in any
         jurisdiction  outside  the  United  States by the  Company or any other
         agent on behalf of such  Purchaser that would permit an offering of the
         Securities,  or possession  or  distribution  of offering  materials in
         connection  with  the  issue  of the  Securities,  in any  jurisdiction
         outside the United  States.  If such  Purchaser is located  outside the
         United States,  it has or will take all actions  necessary for the sale
         of the Securities to comply with all applicable laws and regulations in
         each  foreign  jurisdiction  in which it  purchases,  offers,  sells or
         delivers  Securities  or has  in  its  possession  or  distributes  any
         offering material, in all cases at its own expense.

                  (h)  Registration  Required.  Such Purchaser  hereby covenants
         with the Company not to make any sale of the Shares, the Warrant Shares
         and the  Anti-Dilution  Shares  without  complying  with the provisions
         hereof  and  of  the  Registration   Rights   Agreement,   and  without
         effectively  causing  the  prospectus  delivery  requirement  under the
         Securities  Act to be satisfied  (unless such Purchaser is selling such
         Shares,  Warrant Shares or  Anti-Dilution  Shares in a transaction  not
         subject to the  prospectus  delivery  requirement),  and such Purchaser
         acknowledges   that  the   certificates   evidencing   the  Shares  and
         Anti-Dilution  Shares will be  imprinted  with a legend that  prohibits
         their transfer except in accordance therewith.

                  (i) No Tax or Legal Advice.  Such Purchaser  understands  that
         nothing in this Agreement,  any other Transaction Document or any other
         materials  presented to such Purchaser in connection  with the purchase
         and sale of the Securities constitutes legal, tax or investment advice.
         Such Purchaser has consulted such legal, tax and investment

<PAGE>

         advisors  as it,  in its  sole  discretion,  has  deemed  necessary  or
         appropriate in connection with its purchase of Securities.

         The Company  acknowledges  and agrees that each Purchaser does not make
or  has  not  made  any  representations  or  warranties  with  respect  to  the
transactions contemplated hereby other than those specifically set forth in this
Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

4.1      Transfer Restrictions.

                  (a) The Securities may only be disposed of in compliance  with
         state and federal  securities  laws. In connection with any transfer of
         Securities other than pursuant to an effective registration  statement,
         to the Company,  to an Affiliate of a Purchaser or in connection with a
         pledge as contemplated  in Section 4.1(b),  the Company may require the
         transferor  thereof  to  provide  to the  Company an opinion of counsel
         selected by the  transferor,  the form and  substance of which  opinion
         shall be  reasonably  satisfactory  to the Company,  to the effect that
         such  transfer  does  not  require  registration  of  such  transferred
         Securities  under the Securities  Act. As a condition of transfer,  any
         such transferee shall agree in writing to be bound by the terms of this
         Agreement and shall have the rights of a Purchaser under this Agreement
         and the Registration Rights Agreement.

                  (b) The  Purchasers  agree  to the  imprinting,  so long as is
         required by this Section  4.1(b),  of a legend on any of the Securities
         in the following form:

                  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.

                  The Company  acknowledges and agrees that a Purchaser may from
         time to time pledge  pursuant to a bona fide  margin  agreement  with a
         registered broker-dealer or grant a security interest in some or all of
         the  Securities  to a  financial  institution  that  is an  "accredited
         investor"  as defined in Rule 501(a) under the  Securities  Act and, if
         required

<PAGE>

         under  the  terms of such  arrangement,  such  Purchaser  may  transfer
         pledged or secured Securities to the pledgees or secured parties.  Such
         a pledge or  transfer  would not be subject to  approval of the Company
         and no legal opinion of legal counsel of the pledgee,  secured party or
         pledgor shall be required in connection  therewith.  Further, no notice
         shall  be  required  of such  pledge.  At the  appropriate  Purchaser's
         expense,   the  Company  will  execute  and  deliver  such   reasonable
         documentation   as  a  pledgee  or  secured  party  of  Securities  may
         reasonably  request  in  connection  with a pledge or  transfer  of the
         Securities,  including  the  preparation  and  filing  of any  required
         prospectus  supplement  under Rule  424(b)(3) of the  Securities Act or
         other applicable provision of the Securities Act to appropriately amend
         the list of Selling Stockholders thereunder.

                  (c)  Certificates  evidencing  the Shares and  Warrant  Shares
         shall not contain any legend (including the legend set forth in Section
         4.1(b)), (i) while a registration statement (including the Registration
         Statement)  covering the resale of such security is effective under the
         Securities  Act, or (ii)  following  any sale of such Shares or Warrant
         Shares  pursuant to Rule 144, or (iii) if such Shares or Warrant Shares
         are eligible for sale under Rule 144(k),  or (iv) if such legend is not
         required under applicable requirements of the Securities Act (including
         judicial  interpretations and pronouncements issued by the Staff of the
         Commission).  The  Company  shall  cause its  counsel  to issue a legal
         opinion to the Company's  transfer  agent  promptly after the Effective
         Date if required by the Company's  transfer agent to effect the removal
         of  the  legend  hereunder.  If  all or any  portion  of a  Warrant  is
         exercised at a time when there is an effective  registration  statement
         to cover the resale of the Warrant Shares, such Warrant Shares shall be
         issued free of all  legends.  The Company  agrees  that  following  the
         Effective  Date or at such time as such  legend  is no longer  required
         under this  Section  4.1(c),  it will,  no later than nine Trading Days
         following  the delivery by a Purchaser to the Company or the  Company's
         transfer agent of a certificate  representing Shares or Warrant Shares,
         as the case may be, issued with a restrictive legend,  deliver or cause
         to be  delivered  to such  Purchaser a  certificate  representing  such
         Securities  that is free from all  restrictive  and other legends.  The
         Company may not make any  notation on its records or give  instructions
         to any transfer agent of the Company that enlarge the  restrictions  on
         transfer set forth in this Section.

         4.2  Furnishing  of   Information.   As  long  as  any  Purchaser  owns
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the  Company  after  the date  hereof  pursuant  to the
Exchange  Act.  Upon the request of any such holder of  Securities,  the Company
shall  deliver  to such  holder a  written  certification  of a duly  authorized
officer as to whether it has complied  with the preceding  sentence.  As long as
any Purchaser  owns  Securities,  if the Company is not required to file reports
pursuant to such laws,  it will prepare and furnish to the  Purchasers  and make
publicly  available in accordance  with Rule  144(c)(2)  such  information as is
required for the Purchasers to sell the  Securities  under Rule 144. The Company
further  covenants  that it will  take  such  further  action  as any  holder of
Securities may reasonably request,  all to the extent required from time to time
to enable such Person to sell such  Securities  without  registration  under the
Securities Act within the limitation of the exemptions provided by Rule 144.

         4.3 Integration.  The Company shall not sell, offer for sale or solicit
offers to buy or  otherwise  negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that

<PAGE>

would be  integrated  with the offer or sale of the  Securities in a manner that
would  require  the  registration  under the  Securities  Act of the sale of the
Securities to the Purchasers.

         4.4 Securities Laws Disclosure;  Publicity. The Company shall, within 3
Trading Days of the Closing Date, issue a press release or file a Current Report
on Form 8-K, in each case reasonably acceptable to each Purchaser disclosing the
transactions  contemplated hereby and make such other filings and notices in the
manner and time required by the Commission. The Company and each Purchaser shall
consult  with each  other in  issuing  any press  releases  with  respect to the
transactions  contemplated  hereby,  and neither  the Company nor any  Purchaser
shall issue any such press release or otherwise  make any such public  statement
without the prior  consent of the Company,  with respect to any press release of
any Purchaser,  or without the prior consent of each Purchaser,  with respect to
any press  release of the  Company,  which  consent  shall not  unreasonably  be
withheld,  except if such  disclosure  is  required  by law,  in which  case the
disclosing  party shall  promptly  provide the other party with prior  notice of
such public  statement or  communication.  Notwithstanding  the  foregoing,  the
Company shall not publicly  disclose the name of any  Purchaser,  or include the
name of any Purchaser in any filing with the Commission or any regulatory agency
or Trading Market,  without the prior written consent of such Purchaser,  except
(i) as required by federal  securities law in connection  with the  registration
statement  contemplated  by the  Registration  Rights  Agreement and (ii) to the
extent such  disclosure  is required by law or Trading  Market  regulations,  in
which case the Company  shall provide the  Purchasers  with prior notice of such
disclosure permitted under subclause (i) or (ii).

         4.5  Non-Public  Information.  The  Company  covenants  and agrees that
neither it nor any other Person  acting on its behalf will provide any Purchaser
or its  agents  or  counsel  with  any  information  that the  Company  believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be  relying  on the  foregoing  representations  in  effecting  transactions  in
securities of the Company.

         4.6 Use of Proceeds.  The Company  shall use the net proceeds  from the
sale of the Securities  hereunder for working  capital  purposes and not for the
satisfaction  of any portion of the Company's  debt (other than payment of trade
payables in the ordinary course of the Company's  business and prior practices),
to redeem any Company  equity or  equity-equivalent  securities or to settle any
outstanding litigation.

         4.7 Reservation of Common Stock. As of the date hereof, the Company has
reserved  and the Company  shall  continue to reserve and keep  available at all
times, free of preemptive  rights, a sufficient number of shares of Common Stock
for the  purpose of  enabling  the  Company  to issue  Shares  pursuant  to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.

         4.8  Listing  of  Common  Stock.  The  Company  hereby  agrees  to  use
commercially  reasonably  efforts to maintain the listing of the Common Stock on
the Trading Market, and as soon as reasonably  practicable following the Closing
(but not later than the earlier of the Effective Date and the first  anniversary
of the Closing  Date) to list the  applicable  Shares and Warrant  Shares on the
Trading Market.  The Company further agrees,  if the Company applies to have the
Common  Stock  traded on any  other  Trading  Market,  it will  include  in such
application the Shares and the Warrant  Shares,  and will take such other action
as is necessary or desirable in

<PAGE>

the opinion of the Investors to cause the Shares and Warrant Shares to be listed
on such other Trading Market as promptly as possible.  The Company will take all
action  reasonably  necessary  to continue the listing and trading of its Common
Stock on a Trading  Market and will comply in all  respects  with the  Company's
reporting, filing and other obligations under the bylaws or rules of the Trading
Market.

         4.9 No Short  Sales.  The  Purchasers  and their  Affiliates  shall not
engage in short sales of the Common Stock (as defined in applicable SEC and NASD
rules) during the term of this Agreement.

                                   ARTICLE V.
                                  MISCELLANEOUS

         5.1 Fees and Expenses. Except as otherwise set forth in this Agreement,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and  other  experts,  if any,  and all other  expenses  incurred  by such  party
incident to the negotiation, preparation, execution, delivery and performance of
this  Agreement.  The  Company  shall pay all stamp and other  taxes and  duties
levied in connection with the sale of the Securities.

         5.2 Entire  Agreement.  The  Transaction  Documents,  together with the
exhibits and schedules thereto,  contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

         5.3 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 (a) the date of  transmission,  if
such notice or  communication is delivered via facsimile at the facsimile number
specified in this Section  prior to 6:30 p.m.  (New York City time) on a Trading
Day, (b) the next Trading Day after the date of transmission,  if such notice or
communication  is delivered via facsimile at the facsimile  number  specified in
this  Section on a day that is not a Trading  Day or later  than 6:30 p.m.  (New
York City time) on any Trading  Day, (c) the Trading Day  following  the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon  actual  receipt by the party to whom such  notice is required to be given.
The address for such  notices  and  communications  shall be as set forth on the
signature pages attached hereto.

         5.3 Amendments;  Waivers.  No provision of this Agreement may be waived
or amended except in a written  instrument  signed, in the case of an amendment,
by the  Company  and each  Purchaser  or, in the case of a waiver,  by the party
against whom enforcement of any such waiver is sought.  No waiver of any default
with respect to any provision,  condition or requirement of this Agreement shall
be deemed to be a continuing  waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise  any right  hereunder in
any manner impair the exercise of any such right.

         5.4 Construction.  The headings herein are for convenience only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof.

<PAGE>

The language used in this Agreement will be deemed to be the language  chosen by
the parties to express their mutual intent, and no rules of strict  construction
will be applied against any party.

         5.5  Successors and Assigns.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their successors and permitted  assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written  consent of each  Purchaser.  Any Purchaser may assign
any or all of its  rights  under  this  Agreement  to any  Person  to whom  such
Purchaser  assigns or transfers any Securities,  provided such transferee agrees
in  writing to be bound,  with  respect to the  transferred  Securities,  by the
provisions hereof that apply to the "Purchasers".

         5.6 No  Third-Party  Beneficiaries.  This Agreement is intended for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person.

         5.7 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents 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 and
any other Transaction  Documents  (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. 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 herein (including with
respect to the enforcement of the any of the Transaction Documents),  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  (including its affiliates,  agents,  officers,  directors and
employees)  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 a Transaction  Document,  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.

         5.8 Survival. The representations, warranties, agreements and covenants
contained herein shall survive for one year after the Closing.

         5.9  Execution.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  all of which when taken  together shall be considered one and the
same agreement and shall become

<PAGE>

effective when  counterparts have been signed by each party and delivered to the
other  party,  it being  understood  that  both  parties  need not sign the same
counterpart.  In  the  event  that  any  signature  is  delivered  by  facsimile
transmission,  such signature shall create a valid and binding obligation of the
party  executing (or on whose behalf such  signature is executed)  with the same
force and effect as if such facsimile signature page were an original thereof.

         5.10  Severability.  If any  provision of this  Agreement is held to be
invalid or unenforceable in any respect,  the validity and enforceability of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         5.11  Replacement  of  Securities.  If any  certificate  or  instrument
evidencing any Securities is mutilated,  lost, stolen or destroyed,  the Company
shall  issue or cause to be issued in  exchange  and  substitution  for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument,  but only upon receipt of evidence reasonably satisfactory to the
Company  of such  loss,  theft  or  destruction  and  customary  and  reasonable
indemnity,  if requested.  The  applicants  for a new  certificate or instrument
under  such  circumstances  shall  also  pay any  reasonable  third-party  costs
associated with the issuance of such replacement Securities.

         5.12  Remedies.  In addition to being  entitled to exercise  all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Purchasers  and the Company will be entitled to specific  performance  under the
Transaction  Documents.  The  parties  agree that  monetary  damages  may not be
adequate  compensation  for  any  loss  incurred  by  reason  of any  breach  of
obligations  described in the  foregoing  sentence and hereby agrees to waive in
any action for specific  performance  of any such  obligation the defense that a
remedy at law would be adequate.

         5.13 Payment Set Aside.  To the extent that the Company makes a payment
or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such  enforcement  or exercise or any part thereof are  subsequently
invalidated,  declared to be fraudulent or  preferential,  set aside,  recovered
from, disgorged by or are required to be refunded,  repaid or otherwise restored
to the  Company,  a  trustee,  receiver  or  any  other  person  under  any  law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

         5.14  Independent  Nature of Purchasers'  Obligations  and Rights.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  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 or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction

<PAGE>

Document.  Each Purchaser shall be entitled to independently protect and enforce
its  rights,  including  without  limitation,  the  rights  arising  out of this
Agreement  or  out of the  other  Transaction  Documents,  and it  shall  not be
necessary  for any other  Purchaser to be joined as an  additional  party in any
proceeding  for such purpose.  Each  Purchaser has been  represented  by its own
separate  legal  counsel in their  review  and  negotiation  of the  Transaction
Documents. The Company has elected to provide all Purchasers with the same terms
and Transaction  Documents for the convenience of the Company and not because it
was required or requested to do so by the Purchasers.

                            (Signature Page Follows)

<PAGE>

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

SPATIALIGHT, INC.                                          Address for Notice:
                                                           -------------------

By:_____________________________________
      Name:
      Title:

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

[PURCHASER] Address for Notice:

By:  __________________________

        Name:                                                 Fax:
        Title:                                                Attn:

Subscription Amount: $

With a copy to:

                           [SIGNATURE PAGE CONTINUES]

<PAGE>

          [PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

[PURCHASER] Address for Notice:

By:_____________________________________             Attn:
         Name:                                       Tel:
         Title:

Subscription Amount:  $

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