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                                                                  EXHIBIT 10.14

                           MEMORANDUM OF UNDERSTANDING

This Memorandum of Understanding is entered into this 29th day of October 2001
between Hisense Electric Co. Ltd of 11 Jianxi Road, Qingdao, China and IRICO
Group Corp of 1 Caihing road, Xianyang, Shaanxi, China and SpatiaLight Inc.
("SpatiaLight") of 9 Commercial Blvd, Suite 200, Novato, California 94949,
United States of America together "the parties"

                                     WHEREAS

     1. Hisense and IRICO are leading Chinese Electronics manufacturers which
        propose to enter into the market for manufacturing LCOS television sets.

     2. Hisense and IRICO recognize that SpatiaLight has commercial and
        technical expertise of value to its business.

     3. Hisense and IRICO have entered into a full Non-disclosure Agreement with
        SpatiaLight and are fully aware of the confidential nature of these
        discussions.

     4. SpatiaLight is a leading LCOS chip design and manufacturing company and
        wishes to strengthen its relationship with Hisense and IRICO to assist
        in the development of the Chinese market.

     5. The parties recently had friendly and constructive meetings and have
        recognized that each could benefit in important ways by working
        together.

     6. To help further discussions and co-operation the parties have agreed
        this memorandum to clarify their intentions.

NOW IT IS AGREED

     The parties agree to co-operate in developing Hisense and IRICO's
manufacture of LCOS television sets.

     1. Business Scope: The purchase by Hisense and IRICO of Display Units
        manufactured by SpatiaLight. A Display Unit is defined as a light engine
        inclusive of lamp and ballast manufactured exclusively for SpatiaLight
        by Fuji fitted with SpatiaLight's chips.

     2. SpatiaLight will supply two prototype Display Units for Hisense and
        IRICO to promote SpatiaLight's technology in China and Hisense and
        IRICO's product development. Hisense and IRICO undertake to return these
        prototypes plus any other materials SpatiaLight provides within an
        agreed time period should Hisense and IRICO not proceed to enter into a
        purchase contract.

     3. SpatiaLight will provide technical assistance to Hisense and IRICO to
        make and test mock LCOS TV using SpatiaLight's chips and optical engines
        to ensure relevant technical criteria are satisfied.

     4. Given that SpatiaLight's products and quality suit the Chinese market
        Hisense and IRICO will either build new or transform existing production
        capacity into a production line.

        Hisense and IRCO's target output will be:

        First Year        12,000 sets

     5. In relation to its planned production ramp-up and following satisfactory
        technical testing of SpatiaLight's Display Units, Hisense and IRICO
        agree to enter into a contract with SpatiaLight for the purchase of its
        Display Units. The actual quantity of orders will be by the parties in
        due time.

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     6. Under the current market condition, the price of each display unit is
        estimated to be USD 1600.00 (excluding import tariff and VAT). The
        actual price will be discussed by the parties in due time.

     7. The method of payment will accord to international practice acceptable
        to SpatiaLight, Hisense and IRICO.

OTHER ISSUES

In relation to the desire of both Hisense and IRICO and SpatiaLight to develop
their commercial relationship beyond the foregoing the following is also agreed.

     8. The parties agree to use this Memorandum of Understanding as a basis to
        advance their future co-operation.

     9. Hisense and IRICO undertake not to disclose trade secrets, technical and
        other assistance provided by SpatiaLight. If Hisense and IRICO want to
        co-operate with SpatiaLight's competitors, they must return the
        prototypes provided by SpatiaLight in advance.

Signed on behalf of Hisense                Signed on behalf of SpatiaLight

Name:    \s\XIAODONG XIA                   Name:    \s\ROBERT OLINS
      ------------------------------             -----------------------------
         Xiaodong Xia                                Robert OLINS

Title:   Vice President                             Title: Chief Executive

Signed on behalf of IRICO

Name:    \s\YINGZHONG WU
         ---------------------------
         Yingzhong Wu

                                       51<PAGE>
                                                                  EXHIBIT 10.15

                          AGREEMENT OF PRINCIPAL TERMS

         This Agreement of Principal Terms is entered into this 2nd day of
November, 2001, between Skyworth Display Ltd. ("Skyworth"), a Hong Kong
corporation whose registered address is Westlands Centre, 20 Westlands Road,
Quarry Bay, Hong Kong and SpatiaLight, Inc. ("SpatiaLight"), a New York
corporation having a principal place of business at 9 Commercial Blvd, Suite 200
Novato, California 94949, United States of America (Skyworth and SpatiaLight are
sometimes referred to individually as a "party" and jointly as the "parties").

WHEREAS

         (a) SpatiaLight is the creator, developer and manufacturer of an active
         matrix liquid crystal on silicon microdisplay device having an active
         matrix of 1280 pixels by 1024 pixels (or 5 by 4 format) or 1280 pixels
         by 720 pixels (or 16 by 9 format) ("LCOS chip"). When the LCOS chips
         are fitted onto a light engine, it may be utilized in display
         application products such as high definition televisions and home
         screen projection systems. As used elsewhere in this Agreement, the
         term "Display Unit(s)" refers to three (3) SpatiaLight LCOS chips
         fitted onto a light engine designed by SpatiaLight and Fuji Photo
         Optical Company ("Fuji") and manufactured by Fuji.

         (b) Skyworth is a leading Hong Kong electronics manufacturer who may
         enter the market of LCOS television sets using SpatiaLight's
         proprietary LCOS chips fitted in the Display Unit.

         (c) Skyworth will enter into a full Non-disclosure Agreement with
         SpatiaLight dated ("Non-disclosure Agreement") and will be fully bound
         by the terms and conditions set forth in that agreement.

         (d) SpatiaLight wishes to enter into this Agreement and assist Skyworth
         in developing the Chinese market for LCOS televisions using
         SpatiaLight's proprietary technology.

         (e) The parties recently had friendly and constructive meetings between
         their representatives in Hong Kong and have recognized that each could
         benefit in important ways by working together.

         (f) To help further discussions and co-operation, the parties have
         agreed to the following principal terms.

         NOW, THEREFORE, the parties hereto agree, as follows:

         1.  Representations: Each of Skyworth and SpatiaLight, hereby warrants
             and represents to the other, as follows:

             (a) that it is a legal person validly existing in its jurisdiction
                 of establishment;

             (b) that it has the full power and authority to enter into this
                 Agreement and perform its contractual obligations; that its
                 representative who is signing this Agreement has been
                 authorized to do so pursuant to a valid power of attorney; and

             (c) that Skyworth has obtained the necessary license to establish
                 production in China from Appropriate Chinese authorities,
                 attached hereto as Exhibit A.

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         2.  SpatiaLight will make available to Skyworth at a location in
             Shenzhen, a prototype rear projection TV fitted with SpatiaLight's
             Display Unit. Skyworth will have unlimited access to this facility
             for a period of 15 days ("Test Period") from the date this facility
             is made available. During the Test Period, Skyworth will use its
             best efforts to develop prototype projection TVs using the Display
             Units.

             (a) During the Test Period, SpatiaLight will provide technical
                 assistance to Skyworth to make and test prototype LCOS
                 televisions using the Display Units to meet the technical
                 criteria established by Skyworth and SpatiaLight, jointly.

             (b) If the prototype LCOS televisions meet the specified technical
                 criteria at the end of the Test Period, Skyworth may enter into
                 commercial negotiations with SpatiaLight on a mutually
                 agreeable form for the following number of Display Units: (i)
                 in calendar year 2002, orders for a minimum of 30,000 Display
                 Units. (ii) in calendar year 2003 Skyworth estimates orders to
                 be in the range of 50,000 to 60,000 Display Units. The terms of
                 payment shall be internationally acceptable methods of payment
                 acceptable to SpatiaLight.

             (c) If the prototype LCOS televisions do not meet the specified
                 technical criteria at the end of the Test Period, Skyworth
                 shall return all confidential technology and data and know-how
                 shall be either destroyed or kept confidential in accordance
                 with the terms of the Non-disclosure Agreement.

         OTHER ISSUES

     In relation to the desire of both Skyworth and SpatiaLight to develop their
commercial relationship beyond the foregoing the following is also agreed:

         3.  During the period that SpatiaLight is working with Skyworth and
             providing it with trade secrets, technical and other assistance for
             the development of LCOS TVs, Skyworth, its officer, directors,
             principals, owners and employees shall undertake not to, directly
             or indirectly, communicate any confidential information nor allow
             access to the LCOS prototype TV to any competitor of SpatiaLight.

         4.  The Governing law for this Agreement of Principal Terms shall be
             that of the People's Republic of China.

Signed on behalf of Skyworth                Signed on behalf of SpatiaLight

Name:    \s\ FRANCO HUANG                   Name: \s\ROBERT A. OLINS
         ------------------                       ------------------
         Franco Huang                             Robert A. Olins

Title:   Chief Executive Officer            Title:   Chief Executive Officer

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