SpatiaLight, Inc. today announced that it has signed an agreement with Shanghai China Display Co., Ltd. (China Display), a Chinese television manufacturer, for the purchase by China Display of 1000 sets of three SpatiaLight imagEngine liquid crystal on silicon (LCoS) microdisplays.

This purchase order agreement is the result of a memorandum of understanding entered into in August 2002.

Pursuant to the purchase order, SpatiaLight completed an initial delivery of 100 microdisplay sets to China Display in December 2003. A second delivery of 300 sets and a third delivery of 600 sets are to follow. The entire order is scheduled to be completed within a three-month period. Pursuant to the terms of the purchase order, the obligations of China Display will be backed by three letters of credit, the first of which has been issued in SpatiaLight's favor. The purchase order is subject to customary terms and conditions pertaining to the purchase by China Display of the 1000 microdisplay sets.