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WAIVER
This Waiver (the "Agreement"), is made and
entered into as of February 23, 2007 by and between Spatialight,
Inc., a New York corporation (the "Seller"), and Southshore Capital
Fund, Ltd. (the "Purchaser").
WITNESSETH
WHEREAS , the Seller and the
Purchaser are parties to a Securities Purchase Agreement dated
November 29, 2006 (the "Securities Purchase Agreement");
and
WHEREAS , Section 4.19 of the
Securities Purchase Agreement prohibits the issuance of shares of
the Seller’s common stock at a purchase price of less than
$1.30 per share until the earlier of (i) 90 days from the effective
date of the registration statement covering the Registrable
Securities, as defined in the Securities Purchase Agreement or (ii)
12 months from the date of the Securities Purchase Agreement;
and
WHEREAS , Seller desires to sell
an aggregate of 3,333,333 shares of its common stock, at a purchase
price of $1.05 per share (the "February Offering"), and Purchaser
desires to waive the provisions of Section 4.19 of the Securities
Purchase Agreement in connection with the February Offering on the
terms provided herein.
NOW, THEREFORE , in
consideration of the mutual covenants and undertakings contained
herein the parties hereto agree as follows:
1. Waiver Shares
. Subject to the terms and conditions of this
Agreement, Seller hereby agrees to issue to Purchaser and Purchaser
hereby agrees to waive the provisions of Section 4.19 of the
Securities Purchase Agreement in connection with the February
Offering in consideration of the issuance to Purchaser of 30,000
shares of the Seller’s common stock (the "Waiver Shares"). On
the date hereof the Seller shall transfer the Waiver Shares to the
Purchaser by crediting the account of the Purchaser’s broker
(the "Prime Broker") with the Depository Trust Company through its
Deposit Withdrawal Agent Commission system in accordance with
instructions annexed hereto. The issuance of the Waiver Shares to
the Purchaser is solely in connection with the waiver by the
Purchase of its rights under Section 4.19 in connection with the
February Offering and such waiver does not constitute a waiver of
(i) the Purchaser’s rights under Section 4.19 in connection
with any other issuance of the Seller’s securities or (ii)
any other rights of Purchaser pursuant to the Securities Purchase
Agreement. Except as otherwise provided herein, the Securities
Purchase Agreement is unmodified and in full force and
effect.
2. Conditions . This Agreement shall not be effective and Seller shall have
no obligation to issue the Waiver Shares unless Seller shall have
received a waiver on the same terms as set forth in this Agreement
from the holders of at least 1,200,001 shares of common stock
issued pursuant to the Securities Purchase Agreement.
3. Representations of
Seller . Seller represents and warrants to
Purchaser that:
(a) The Waiver Shares shall be freely
transferable by the Purchaser without restriction. The Waiver
Shares shall not bear a restricted legend under applicable Federal
and state securities laws.
(b) This Agreement has been duly authorized,
executed and delivered by Seller and constitutes a legal, valid and
binding obligation of Seller, enforceable in accordance with its
terms (subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization or other similar laws and to general
principles of equity).
(c) Seller's execution, delivery and performance
of this Agreement does not (i) violate or conflict with, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of
any lien upon any of the properties or assets of Seller, or give to
others any rights of termination, amendment, acceleration, or
cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing a debt of Seller or otherwise) or other understanding
to which the Seller is a party or by which any property or asset of
Seller is bound or affected, (ii) conflict with the Seller’s
certificate of incorporation or bylaws, (iii) conflict with, or
result in a violation of any law, rule or regulation applicable to
Seller, or any order or judgment of any court or other agency of
government applicable to, or affecting Seller.
(d) The Seller has filed all forms, reports and
documents (the "SEC Documents") required to be filed with the
Securities and Exchange Commission (the "Commission") pursuant to
the Securities At of 1933, as amended (the "Securities Act") or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as the case may be, and the rules and regulations of the Commission
thereunder during the 12 month period ending on the date of this
Agreement. Except as corrected by subsequent amendment, as of their
respective filing dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of
the Commission thereunder applicable to such SEC Documents, and
none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to
stated therein or necessary in order to make statements therein, in
light of the circumstances under which they were made, not
misleading. Except as corrected by subsequent amendment, as of
their respective filing dates, the financial statements of the
Seller included in the SEC Documents complied as to form in all
material respects with the applicable accounting requirements and
the rules and regulations of the Commission thereunder and were
prepared in accordance with generally accepted accounting
principles and fairly presented, in all material respects, the
financial position of the Seller as at the dates thereof and the
results of operations and cash flows of the Seller for the periods
then ended (subject, in the case of unaudited statements, to
normal, recurring audit adjustments not material in scope or
amount).
(e) The Waiver Shares are included in the
Seller's registration statement filed with the Commission
Registration No. 333-137100 (the "Registration Statement."). The
Registration Statement covering the issuance of the Waiver Shares
was declared effective on February 14, 2007 by the Commission and
neither the Commission nor any state regulatory authority has
issued, or threatened to issue, any order preventing or suspending
the use of the Registration Statement or the prospectus contained
therein or has instituted or, to the Seller’s knowledge,
threatened to institute any proceedings with respect to such an
order.
(f) No consent, approval, authorization or order
of, or filing or registration with, any court, regulatory authority
or other governmental agency or body or third party is required in
connection with the transactions contemplated herein.
(g) The Seller hereby confirms that neither it
nor, to its knowledge, any other person acting on its behalf has
provided the Purchaser or its agents or counsel with any
information that it believes constitutes or might constitute
material, non-public information.
4. Representations of
Purchaser . Purchaser represents and
warrants to Seller that:
(a) Purchaser is duly organized, validly existing
and in good standing under the laws of its jurisdiction of
organization and it has full right, power and authority to enter
into this Agreement and to perform its obligations hereunder in
accordance with the terms of this Agreement and has taken all
necessary action to authorize the execution, delivery and
performance of this Agreement.
(b) This Agreement has been duly authorized,
executed and delivered by it and constitutes a legal, valid and
binding obligation of it, enforceable in accordance with its terms
(subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization or other similar laws and to general
principles of equity).
(c) Purchaser's execution, delivery and
performance of this Agreement does not violate or conflict with the
Purchaser’s governing documents or any law, rule or
regulation applicable to Purchaser, or any order or judgment of any
court or other agency of government applicable to or affecting
Purchaser.
5. Indemnification
.
(a) Seller shall indemnify and hold harmless
Purchaser, the officers, directors, agents, investment advisors and
employees of Purchaser, each person who controls any such person
(within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling person, to the fullest extent
permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation,
reasonable costs of preparation and reasonable attorneys' fees) and
expenses (collectively, "Losses"), as incurred, arising out of or
relating to (i) any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any
prospectus contained therein or in any amendment or supplement
thereto or arising out of or relating to any om
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