SPATIALIGHT INC
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>10
<FILENAME>v09467_ex99-9.txt
<TEXT>
                                                                    Exhibit 10.9

                           ADDITIONAL INVESTMENT RIGHT

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
NOR THE  SECURITIES  INTO  WHICH  THESE  SECURITIES  ARE  EXERCISABLE  HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT"),
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD,   TRANSFERRED  OR  ASSIGNED  (I)  IN  THE  ABSENCE  OF  (A)  AN  EFFECTIVE
REGISTRATION  STATEMENT FOR THE  SECURITIES  UNDER THE  SECURITIES ACT OR (B) AN
OPINION OF COUNSEL,  IN A GENERALLY  ACCEPTABLE  FORM, THAT  REGISTRATION IS NOT
REQUIRED  UNDER SAID ACT OR (II) UNLESS  SOLD  PURSUANT TO RULE 144 OR RULE 144A
UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT.

                                SPATIALIGHT, INC.

                           ADDITIONAL INVESTMENT RIGHT

Additional Investment Right No.: 2
Principal Amount of Additional Notes: $2,250,000
Date of Issuance:  November 30, 2004 ("ISSUANCE DATE")

SpatiaLight,  Inc., a New York  corporation  (the  "COMPANY"),  hereby certifies
that,  for value  received,  the  receipt  and  sufficiency  of which are hereby
acknowledged,  SMITHFIELD  FIDUCIARY  LLC, the  registered  holder hereof or its
permitted  assigns (the "HOLDER"),  is entitled,  subject to the terms set forth
below to purchase  from the Company,  at the Exercise  Price (as defined  below)
then in effect, at any time or times on or after the date hereof,  but not after
11:59 P.M., New York Time, on the Expiration  Date (as defined  below),  up to a
total of $2,250,000,  in principal amount of Additional Notes (as defined in the
Securities  Purchase Agreement (as defined below)).  Except as otherwise defined
herein,  capitalized  terms in this Additional  Investment  Right shall have the
meanings  set  forth  in  Section  15 or in  that  certain  Securities  Purchase
Agreement,  dated as of  November  30,  2004,  by and among the  Company and the
buyers  referred to therein,  including  the Holder  (the  "SECURITIES  PURCHASE
AGREEMENT").   This  Additional   Investment  Right  (including  all  Additional
Investment Rights issued in exchange,  transfer or replacement  hereof,  each an
"AIR", such other AIRs, the "OTHER AIRS" and collectively, the "AIRS") is one of
the  Additional  Investment  Rights  (as  defined  in  the  Securities  Purchase
Agreement) issued pursuant to Section 1 of the Securities Purchase Agreement.


<PAGE>

      1.    EXERCISE OF AIR.

            (a)   Mechanics  of  Exercise.  Subject to the terms and  conditions
hereof,  this AIR may be  exercised  by the Holder  hereof on any day  beginning
after  the date  hereof  and  ending on and  including  November  30,  2005 (the
"EXPIRATION DATE"), in whole or in part (but in no event for an amount less than
$500,000;  except  that if the  amount  of this AIR is less than  $500,000,  the
Holder may exercise for such lesser amount if the AIR is exercised in whole), by
(i) delivery of a written notice,  in the form attached hereto as Exhibit A (the
"EXERCISE  NOTICE"),  by facsimile and by a reputable overnight courier, of such
Holder's  election  to exercise  this AIR and (ii)  payment to the Company of an
amount equal to $1.00 for each $1.00 of principal  amount of Additional Notes as
to which  this AIR is being  exercised  (the  "EXERCISE  PRICE") in cash or wire
transfer of immediately  available  funds.  The date the Exercise Notice and the
Exercise  Price are delivered to the Company (as  determined in accordance  with
the notice  provisions  hereof) is an "EXERCISE DATE." Execution and delivery of
the Exercise Notice with respect to less than all of the Additional  Notes shall
have the same effect as  cancellation  of the original AIR and issuance of a new
AIR evidencing the right to purchase the remaining  number of Additional  Notes.
On or before the third  Business Day  following the Exercise  Date,  the Company
shall transmit by facsimile an  acknowledgment of confirmation of receipt of the
Exercise  Notice and the Exercise Price to the Holder  hereof.  On or before the
third  Business Day  following  the Exercise  Date,  the Company shall issue and
deliver to the address as specified in the Exercise  Notice an Additional  Note,
registered  in the  name of the  Holder  of  this  AIR or its  designee,  in the
principal amount as to which the Holder of this AIR is entitled pursuant to such
exercise.  On the Exercise  Date, the Holder of this AIR shall be deemed for all
corporate  purposes to have become the Holder of record of the  Additional  Note
with respect to which this AIR has been  exercised,  irrespective of the date of
delivery of such  Additional  Note.  Upon  surrender  of this AIR to the Company
following  one  or  more  partial  exercises,  the  Company  shall  as  soon  as
practicable  and in no event later than three Business Days after receipt of the
AIR and at its own expense,  issue a new AIR (in  accordance  with Section 5(d))
representing  the right to purchase the number of Additional  Notes  purchasable
immediately  prior to such exercise under this AIR, less the principal amount of
Additional Notes with respect to which this AIR is exercised.  The Company shall
pay any and all taxes  which may be payable  with  respect to the  issuance  and
delivery of Additional Notes upon exercise of this AIR.

            (b)   Absolute   and   Unconditional   Obligation.   The   Company's
obligations to issue and deliver  Additional  Notes in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by
the Holder to enforce the same, the recovery of any judgment  against any Person
or any action to enforce  the same,  or any  setoff,  counterclaim,  recoupment,
limitation or termination,  or any breach or alleged breach by the Holder or any
other  Person of any  obligation  to the  Company  or any  violation  or alleged
violation of law by the Holder or any other Person.  Nothing  herein shall limit
the 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 Additional Notes upon exercise of the AIR as required pursuant to
the terms hereof.


                                       2
<PAGE>


      2.    PURCHASE RIGHTS; FUNDAMENTAL TRANSACTION.

            (a)   Purchase Rights. If at any time the Company grants,  issues or
sells pro rata to the record  holders of any class of Common  Stock any  Options
(as defined in the Additional Notes),  Convertible Securities (as defined in the
Additional  Notes) or rights to purchase  stock,  warrants,  securities or other
property (the "PURCHASE  RIGHTS"),  then the Holder of this AIR will be entitled
to acquire,  upon the terms  applicable to such Purchase  Rights,  the aggregate
Purchase  Rights which such Holder  could have  acquired if such Holder had held
the number of shares of Common Stock  acquirable  upon  conversion of all of the
Additional Notes issuable upon complete  exercise of this AIR (without regard to
any  limitations on the exercise of this AIR or the conversion of the Additional
Notes)  immediately  before  the date on which a record is taken for the  grant,
issuance or sale of such Purchase  Rights,  or, if no such record is taken,  the
date as of which the record holders of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

            (b)   Change of Control Transactions.  The Company shall give notice
to the Holder of this AIR at least 10 Business Days prior to the occurrence of a
Change of Control.  This AIR shall automatically expire and become null and void
10 Business Days after such notice is received by the Holder of this AIR.

                  (i)   "CHANGE OF CONTROL"  means any  Fundamental  Transaction
with an  unaffiliated  third party other than (A) a Fundamental  Transaction  in
which holders of the Company's voting power immediately prior to the Fundamental
Transaction  continue after the Fundamental  Transaction to hold publicly traded
securities and, directly or indirectly, the voting power of the surviving entity
or  entities  necessary  to elect a  majority  of the  members  of the  board of
directors (or their  equivalent if other than a  corporation)  of such entity or
entities,  or (B) pursuant to a migratory merger effected solely for the purpose
of changing the jurisdiction of incorporation of the Company.

                  (ii)  "FUNDAMENTAL  TRANSACTION" means that the Company shall,
directly or indirectly, in one or more related transactions,  (i) consolidate or
merge with or into  (whether  or not the Company is the  surviving  corporation)
another Person, or (ii) sell, assign,  transfer,  convey or otherwise dispose of
all or  substantially  all of the properties or assets of the Company to another
Person,  or (iii) allow  another  Person to make a purchase,  tender or exchange
offer that is accepted  by the  holders of more than the 50% of the  outstanding
shares of Common  Stock (not  including  any shares of Common  Stock held by the
Person or  Persons  making or party to, or  associated  or  affiliated  with the
Persons making or party to, such purchase,  tender or exchange  offer),  or (iv)
consummate a stock purchase agreement or other business combination  (including,
without limitation,  a reorganization,  recapitalization,  spin-off or scheme of
arrangement)  with another Person  whereby such other Person  acquires more than
the 50% of the  outstanding  shares of Common Stock (not including any shares of
Common  Stock held by the other Person or other  Persons  making or party to, or
associated or affiliated  with the other Persons  making or party to, such stock
purchase   agreement  or  other  business   combination),   or  (v)  reorganize,
recapitalize or reclassify its Common Stock.

            (c)   Fundamental Transactions.  The Company shall not enter into or
be party to a Fundamental  Transaction  that is not a Change of Control,  unless
(i) the Person formed by or surviving any such Fundamental Transaction (if other
than the Company) or the Person to which such Fundamental Transaction shall have
been made  assumes all the  obligations  of the  Company  under this AIR and the


                                       3
<PAGE>


other Transaction  Documents (as defined in the Securities  Purchase  Agreement)
pursuant  to  written  agreements  in form  and  substance  satisfactory  to the
Required  Holders and approved by the Required Holders prior to such Fundamental
Transaction,  and  including  agreements  to deliver  to each  holder of AIRs in
exchange for such AIRs, a security of the Person formed by or surviving any such
Fundamental  Transaction (if other than the Company) or the Person to which such
Fundamental  Transaction shall have been made evidenced by a written  instrument
substantially  similar in form and  substance  to this AIR,  including,  without
limitation, a right to exercise for Additional Notes that have been adjusted and
approved  as set forth in  Sections 5 and 6 of the  Additional  Notes as if such
Additional Notes were  outstanding at the time of such  Fundamental  Transaction
and (ii) the Company or the Person formed by or surviving  any such  Fundamental
Transaction or to which such Fundamental  Transaction  shall have been made is a
publicly  traded  entity  whose common stock or  equivalent  equity  security is
quoted on or listed for trading on an Eligible Market (as defined in the Notes).
Upon any  Fundamental  Transaction,  the  successor  entity to such  Fundamental
Transaction shall succeed to, and be substituted for (so that from and after the
date of such  Fundamental  Transaction,  the provisions of this AIR referring to
such "Company" shall refer instead to the successor  entity or, if so elected by
the Required Holders, by the entity that, directly or indirectly,  controls such
successor  entity),  and may  exercise  every right and power of the Company and
shall assume all of the  obligations of the Company under this AIR with the same
effect  as if such  successor  Person  had  been  named as the  Company  herein;
provided,  however,  that the predecessor Company shall not be relieved from its
obligations under the Transaction  Documents except in the case of a Fundamental
Transaction that meets the requirements of this section.  The provisions of this
Section   shall  apply   similarly   and  equally  to   successive   Fundamental
Transactions.

      3.    COMPANY'S RIGHT OF MANDATORY FUNDING.

            (a)   Mandatory Funding. If at any time from and after the Effective
Date (as defined in the Registration  Rights  Agreement) until November 30, 2005
(the "MANDATORY FUNDING  ELIGIBILITY  DATE"), (i) the Weighted Average Price (as
defined in the Notes) of the Common Stock equals or exceeds  $14.58  (subject to
appropriate  adjustments for stock splits,  stock dividends,  stock combinations
and other similar  transactions  after the Issuance Date) for each of any twenty
(20) consecutive  Trading Days (as defined in the Notes) following the Mandatory
Funding Eligibility Date (the "MANDATORY FUNDING MEASURING PERIOD") and (ii) the
AIR Equity  Conditions (as defined below) shall have been satisfied or waived in
writing by the Holder during the period  commencing  with the Mandatory  Funding
Notice Date and ending with the Mandatory Funding Date (each, as defined below),
the Company  shall have the right to require  the Holder to exercise  all or any
designated  portion of the AIR and purchase  from the  Company,  at the Exercise
Price then in effect,  all or any designated  portion of the Additional Notes in
accordance  with  Section  1(a)  hereof  as of the  Mandatory  Funding  Date  (a
"MANDATORY FUNDING").  The Company may exercise its right to require purchase of
Additional  Notes under this  Section  3(a) by  delivering  within not more than
three Trading Days  following the end of any such  Mandatory  Funding  Measuring
Period a written notice  thereof by facsimile and overnight  courier to all, but
not less than all, of the holders of AIRs (the  "MANDATORY  FUNDING  NOTICE" and
the  date  all of  the  holders  received  such  notice  is  referred  to as the
"MANDATORY  FUNDING  NOTICE  DATE").  The  Mandatory  Funding  Notice  shall  be
irrevocable.  The  Mandatory  Funding  Notice  shall  state (i) the  Trading Day
selected  for the  Mandatory  Funding in  accordance  with Section  3(a),  which
Trading  Day shall be at least 20  Business  Days but not more than 60  Business
Days following the Mandatory Funding Notice Date (the "MANDATORY FUNDING DATE"),
(ii) the aggregate  amount of the  Additional  Notes to be issued upon mandatory
exercise  from all of the holders of the AIRs  pursuant  to this  Section 3 (and
analogous  provisions  under the Other AIRS) and (iii) the  principal  amount of
Additional  Notes to be issued.  The Company may only deliver one (1)  Mandatory
Funding Notice pursuant hereto.


                                       4
<PAGE>


      As used herein,  "AIR EQUITY  CONDITIONS" means that each of the following
conditions  is  satisfied:  (i) on each day during the period  beginning  on the
earlier of the Effective Date and the Effectiveness  Deadline (as defined in the
Registration  Rights  Agreement) and ending on and including the applicable date
of  determination   (the  "AIR  EQUITY  CONDITIONS   MEASURING   PERIOD"),   the
Registration Statement filed pursuant to the Registration Rights Agreement shall
be  effective  and  available  for  the  resale  of  all  remaining  Registrable
Securities in accordance with the terms of the Registration Rights Agreement and
there  shall not have been any Grace  Periods  (as  defined in the  Registration
Rights Agreement);  (ii) on each day during the AIR Equity Conditions  Measuring
Period, the Common Stock is designated for quotation on the Principal Market and
shall not have been  suspended  from trading on such  exchange or market  (other
than  suspensions  of not more  than two (2)  days  and  occurring  prior to the
applicable date of determination  due to business  announcements by the Company)
nor shall  delisting or suspension by such exchange or market been threatened or
pending either (A) in writing by such exchange or market or (B) by falling below
the minimum listing maintenance  requirements of such exchange or market;  (iii)
during the period beginning on the Issuance Date and ending on and including the
date  immediately  preceding the applicable date of  determination,  the Company
shall have delivered  Additional  Notes upon exercise of the AIRs and Conversion
Shares upon  conversion of the Notes to the holders thereof on a timely basis as
set forth in Section 1(a) of the AIRs (and analogous  provisions under the Other
AIRs) and Section 2(c)(ii) of the Notes, respectively; (iv) all shares of Common
Stock issuable  pursuant to Additional Notes to be issued in connection with the
proposed  Mandatory  Funding may be converted in full without  violating Section
3(d) of the Notes or the  rules or  regulations  of the  Principal  Market;  (v)
during the AIR Equity Conditions  Measuring  Period,  the Company shall not have
failed to timely make any payments  within five (5)  Business  Days of when such
payment is due pursuant to any Transaction Document;  (vi) during the AIR Equity
Conditions Measuring Period, there shall not have occurred either (A) the public
announcement of a pending,  proposed or intended  Fundamental  Transaction which
has not been abandoned,  terminated or consummated or (B) an Event of Default or
an event that with the passage of time or giving of notice would  constitute  an
Event of Default;  (vii) the Company  shall have no  knowledge  of any fact that
would cause the Registration  Statements  required  pursuant to the Registration
Rights  Agreement  not to be  effective  and  available  for the  resale  of all
remaining   Registrable   Securities  in  accordance   with  the  terms  of  the
Registration Rights Agreement;  and (viii) the Company otherwise shall have been
in  material  compliance  with  and  shall  not  have  materially  breached  any
provision, covenant, representation or warranty of any Transaction Document.

            (b)   Pro Rata Funding  Requirement.  If the Company elects to cause
an exercise of this AIR pursuant to Section  3(a),  then it must  simultaneously
take the same action in the same  proportion with respect to the Other AIRs. All
AIRs  exercised  by the Holder  after the  Mandatory  Funding  Notice Date shall
reduce the amount of  Additional  Notes  required to be issued on the  Mandatory
Funding Date. If the Company has elected a Mandatory  Funding,  the mechanics of
exercise set forth in Section 1(a) shall apply, to the extent applicable,  as if
the  Company  had  received  from the Holder on the  Mandatory  Funding  Date an
Exercise  Notice with respect to the Additional  Notes being issued  pursuant to
the Mandatory Funding.


                                       5
<PAGE>


      4.    NONCIRCUMVENTION.

            (a)   The Company hereby  covenants and agrees that the Company will
not,  by  amendment  of its  Certificate  of  Incorporation,  issue  or  sale of
securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms under this AIR, and will at all times in good
faith  carry out all the  provisions  of this AIR and take all  action as may be
required to protect the rights of the Holder of this AIR.

            (b)   Under this AIR, the Holder  hereby  covenants  and agrees that
the Holder will not,  through any voluntary  action,  avoid or seek to avoid the
observance or performance of any of the terms of this AIR, and will at all times
in good faith  carry out all the  provisions  of this AIR and take all action as
may be required to protect the rights of the Company.

      5.    REISSUANCE OF AIRS.

            (a)   Transfer of AIR. If this AIR is to be transferred,  the Holder
shall  surrender  this AIR to the Company,  whereupon the Company will forthwith
issue  and  deliver  upon  the  order  of the  Holder  of this AIR a new AIR (in
accordance with Section 5(d)), registered as the Holder of this AIR may request,
representing  the right to purchase the  principal  amount of  Additional  Notes
being transferred by the Holder and, if less then the total number of Additional
Notes then  underlying this AIR is being  transferred,  a new AIR (in accordance
with Section 5(d)) to the Holder of this AIR  representing the right to purchase
the principal amount of Additional Notes not being transferred.  Notwithstanding
the foregoing,  the Holder may only transfer this AIR if it is also transferring
a pro rata portion of Notes.

            (b)   Lost,  Stolen or Mutilated AIR. Upon receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft,  destruction
or mutilation of this AIR, and, in the case of loss,  theft or  destruction,  of
any  indemnification  undertaking  by the  Holder of this AIR to the  Company in
customary form and, in the case of mutilation,  upon surrender and  cancellation
of this AIR, the Company  shall  execute and deliver to the Holder a new AIR (in
accordance with Section 5(d))  representing  the right to purchase the principal
amount of Additional Notes then underlying this AIR.

            (c)   AIR  Exchangeable for Multiple AIRs. This AIR is exchangeable,
upon the surrender  hereof by the Holder at the principal office of the Company,
for a new AIR or AIR (in  accordance  with  Section  5(d))  representing  in the
aggregate  the right to purchase the principal  amount of Additional  Notes then
underlying  this AIR, and each such new AIR will represent the right to purchase
such portion of such Additional Notes as is designated by the Holder of this AIR
at the time of such surrender.

            (d)   Issuance of New AIR. Whenever the Company is required to issue
a new AIR  pursuant to the terms of this AIR,  such new AIR (i) shall be of like
tenor with this AIR, (ii) shall represent,  as indicated on the face of such new
AIR,  the right to  purchase  the  principal  amount of  Additional  Notes  then
underlying  this  AIR (or in the  case of a new AIR  being  issued  pursuant  to


                                       6
<PAGE>


Section  5(a)  or  Section  5(c),  the  principal  amount  of  Additional  Notes
designated by the Holder of this AIR which,  when added to the principal  amount
of Additional  Notes underlying the other new AIR issued in connection with such
issuance,  does not  exceed  the  principal  amount  of  Additional  Notes  then
underlying  this AIR),  (iii) shall have an issuance  date,  as indicated on the
face of such new AIR which is the same as the Issuance Date, and (iv) shall have
the same rights and conditions as this AIR.

      6.    COVENANTS.   Disclosure   of   Transactions   and   Other   Material
Information.  On or before 8:30 a.m.,  New York Time, on the first  Business Day
following  each Exercise  Date,  the Company shall file a Current Report on Form
8-K describing  the terms of the  transactions  contemplated  by the exercise of
this AIR in the form required by the 1934 Act. On the Exercise Date, the Company
shall confirm that the  representations  and warranties of the Company set forth
in the  Securities  Purchase  Agreement are true and correct as of such Exercise
Date as though made at that time (except for representations and warranties that
speak as of a  specific  date)  and  that  the  Company  shall  have  performed,
satisfied  and  complied in all  respects  with the  covenants,  agreements  and
conditions  required by the Transaction  Documents (as defined in the Securities
Purchase  Agreement) to be performed,  satisfied or complied with by the Company
at or prior to such Exercise Date.

      7.    NOTICES.  Whenever  notice is  required  to be given under this AIR,
unless otherwise provided herein,  such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide the
Holder of this AIR with prompt  written  notice of all actions taken pursuant to
this AIR,  including in reasonable  detail a description  of such action and the
reason therefore.  Without limiting the generality of the foregoing, the Company
will give written notice to the Holder of this AIR no sooner than 15 days but no
later  than 10 days prior to the date on which the  Company  closes its books or
takes a record (A) with respect to any dividend or distribution  upon the Common
Stock,  or (B) for  determining  rights to vote with respect to any  Fundamental
Transaction,  dissolution  or  liquidation,  provided  in each  case  that  such
information  shall be made known to the public prior to or in  conjunction  with
such notice being provided to such Holder;  provided,  however, that the Company
shall not be obligated to provide  multiple notices to the Holder if such Holder
is entitled to receive such notice pursuant to another Transaction Document.

      8.    AMENDMENT  AND WAIVER.  Except as  otherwise  provided  herein,  the
provisions of this AIR may be amended and the Company may take any action herein
prohibited,  or omit to perform any act herein  required to be  performed by it,
only if the Company has  obtained the written  consent of the Required  Holders;
provided  that no such action may  increase  the  exercise  price of any AIRs or
decrease the principal  amount of Additional  Notes  obtainable upon exercise of
any AIRs  without  the  written  consent  of the  Holder  of this  AIR.  No such
amendment  shall be  effective to the extent that it applies to less than all of
the Holders of the AIRs then outstanding.

      9.    GOVERNING   LAW.  This  AIR  shall  be  construed  and  enforced  in
accordance  with,  and all  questions  concerning  the  construction,  validity,
interpretation  and  performance  of this AIR shall be governed by, the internal
laws of the State of New York,  without  giving  effect to any  choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York.


                                       7
<PAGE>


      10.   CONSTRUCTION;  HEADINGS.  This AIR  shall be  deemed  to be  jointly
drafted by the  Company  and the Holder and shall not be  construed  against any
person as the drafter  hereof.  The headings of this AIR are for  convenience of
reference and shall not form part of, or affect the interpretation of, this AIR.

      11.   REMEDIES,  OTHER  OBLIGATIONS,  BREACHES AND INJUNCTIVE  RELIEF. The
remedies  provided in this AIR shall be cumulative  and in addition to all other
remedies  available  under this AIR, the Securities  Purchase  Agreement and the
other Transaction  Documents (as defined in the Securities Purchase  Agreement),
at law or in equity  (including  a decree of specific  performance  and/or other
injunctive  relief),  and nothing  herein shall limit the right of the Holder of
this AIR or the Company,  as the case may be, to pursue  actual  damages for any
failure by the  Company or the  Holder,  as the case may be, to comply  with the
terms of this AIR. The Company and the Holder acknowledge that a breach by it of
its obligations  hereunder will cause irreparable harm to the Holder of this AIR
or the  Company,  as the case may be,  and that the  remedy  at law for any such
breach may be inadequate.  The Company and the Holder  therefore  agree that, in
the event of any such breach or threatened breach, the Holder of this AIR or the
Company,  as the case may be,  shall  be  entitled,  in  addition  to all  other
available  remedies,  to an  injunction  restraining  any  breach,  without  the
necessity of showing  economic loss and without any bond or other security being
required.

      12.   CERTAIN  DEFINITIONS.  For purposes of this AIR, the following terms
shall have the following meanings:

            (a)   "BUSINESS  DAY" means any day other than  Saturday,  Sunday or
other day on which  commercial  banks in The City of New York are  authorized or
required by law to remain closed.

            (b)   "COMMON STOCK" means (i) the Company's common stock, par value
$.01 per share,  and (ii) any capital  stock into which such Common  Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.

            (c)   "PERSON" means an individual,  a limited liability  company, a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization,  any other entity and a  government  or any  department  or agency
thereof.

            (d)   "REGISTRATION    RIGHTS    AGREEMENT"   means   that   certain
registration  rights  agreement  dated as of the Closing Date (as defined in the
Securities Purchase Agreement) by and among the Company and the Purchasers.

            (e)   "REQUIRED  HOLDERS" means the holders of AIRs representing the
right to acquire at least a majority of the principal amount of Additional Notes
underlying the AIRs then outstanding.

                            [SIGNATURE PAGE FOLLOWS]



                                       8
<PAGE>


      IN WITNESS WHEREOF, the Company has caused this AIR to be duly executed as
of the Issuance Date set out above.


                                             SPATIALIGHT, INC.


                                             By: /s/ Robert A. Olins
                                                 ---------------------------
                                                 Name:  Robert A. Olins
                                                 Title: Chief Executive Officer

<PAGE>


                                                                       EXHIBIT A

                                 EXERCISE NOTICE

            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                           ADDITIONAL INVESTMENT RIGHT

                                SPATIALIGHT, INC.

To:   SpatiaLight, Inc.

      The  undersigned  is the holder of Additional  Investment  Right No. _____
(the "AIR") issued by SpatiaLight, Inc., a Delaware corporation (the "COMPANY").
Capitalized  terms  used  herein  and  not  otherwise  defined  shall  have  the
respective meanings set forth in the AIR.

      1.    The AIR is  currently  exercisable  to  purchase a total of $_______
principal amount of Additional Notes.

      2.    The  undersigned  holder  hereby  exercises  its  right to  purchase
$_______ principal amount of Additional Notes pursuant to the AIR.

      3.    The holder shall pay the sum of  $___________________ to the Company
in accordance with the terms of the AIR.

      4.    Pursuant to this  exercise,  the Company shall deliver to the holder
$_______  principal  amount of Additional  Notes in accordance with the terms of
the AIR.

      5.    Following this exercise,  the AIR shall be exercisable to purchase a
total of $_______ principal amount of Additional Notes.

      Please  issue  the  Additional  Notes  in the  following  name  and to the
following address:

      Issue to:_________________________________________________________________

               _________________________________________________________________

               _________________________________________________________________




Date: _______________ __, ______



________________________________
   Name of Registered Holder


By:_____________________________
   Name:
   Title:



<PAGE>


                               FORM OF ASSIGNMENT

             [To be completed and signed only upon transfer of AIR]

      FOR VALUE RECEIVED,  the undersigned  hereby sells,  assigns and transfers
unto ________________________________ the right represented by the within AIR to
purchase $________ principal amount of Additional Notes of SpatiaLight, Inc., to
which the within AIR relates and appoints  ________________ attorney to transfer
said right on the books of SpatiaLight,  Inc. with full power of substitution in
the premises.



Dated:_____________________,_____


                                          ______________________________________
                                         (Signature must conform in all respects
                                          to name of holder as specified on the
                                          face of the AIR)


                                          ______________________________________
                                          Address of Transferee


                                          ______________________________________

                                          ______________________________________

In the presence of:


_________________________________


</TEXT>
</DOCUMENT>
