OPTION AGREEMENT

 EXHIBIT 10.8

                                                                       EXHIBIT C

                                OPTION AGREEMENT

     THIS OPTION AGREEMENT (this "Agreement") is made as of the 5th day of
August 1996, by and between VIDEOLAN TECHNOLOGIES, INC., a Delaware corporation
(the "Company") and VIDEO NETWORKS, INC., a New York corporation (the
"Optionee").

     WHEREAS, pursuant to that certain Consulting Agreement dated August 5, 1996
between the Company and Optionee (the "Consulting Agreement"), Optionee was
granted options (the "Options") to purchase up to 40,000 shares of the Company's
common stock (the "Shares") over a certain period of time;

     WHEREAS, Optionee and the Company desire to set forth the terms and
conditions of the Options;

     NOW, THEREFORE, in consideration of the promises and other good and
valuable consideration, the receipt, mutuality and sufficiency of which is
acknowledged, the parties hereto agree as follows:

     1. Option. On the terms and subject to the conditions of this Agreement,
Optionee shall have the right to purchase up to 40,000 Shares, subject to
adjustment in accordance with Section 6 of this Agreement and subject to the
exercise requirements set forth in Sections 4(a), (b), (c) and (d) of this
Agreement.

     2. Option Exercise Price. The exercise price of the Option (the "Exercise
Price") shall be $15.50 per Share, subject to adjustment in accordance with
Section 6 of this Agreement.

     3. Duration of Option. The Option shall expire five years from the date
hereof.

     4. Exercise of Option.

          (a) Options with respect to 14,000 Shares shall vest and be
exercisable six months after the Company has notified the Optionee that it has
determined the Optionee has achieved the First Milestone (as defined on Exhibit
B of the Consulting Agreement);

          (b) Options with respect to an additional 13,000 Shares shall vest and
be exercisable six months after the Company has notified the Optionee that it
has determined the Optionee has achieved the Second Milestone (as defined on
Exhibit B of the Consulting Agreement); and

                                      -10-

          (c) Options with respect to the remaining 13,000 Shares shall vest and
be exercisable six months after the Company has notified the Optionee that it
has determined the Optionee has achieved the Third Milestone (as defined on
Exhibit B of the Consulting Agreement).

          (d) Upon termination of this Agreement for any reason, all unvested
Options shall be canceled effective upon the date of such termination and all
vested Options shall terminate thirty (30) days after the date of such
termination.

          (e) This Option may be exercised by delivery of written notice to the
Company at its executive offices, addressed to the attention of the Chief
Financial Officer. Such notice: (i) shall be accompanied by all necessary
corporate authorization and signed by the president of Optionee or its legal
representatives; (ii) shall specify the number of full Shares then elected to be
purchased with respect to the Option; and (iii) shall be accompanied by payment
in full of the Exercise Price of the Shares to be purchased.

          (f) The Exercise Price upon exercise of this Option shall be payable
to the Company in cash or its equivalent.

          (g) As promptly as practicable after the receipt of notice and payment
upon exercise, the Company shall cause to be delivered to Optionee certificates
for the Shares so purchased. If the Option shall have been exercised in full,
this Agreement shall be returned to the Company and canceled.

     5. Registration of Shares. In the event that Optionee should acquire any
Shares which, at the time of acquisition, are not duly registered under the Act
and, as necessary, applicable state securities law, certificates evidencing the
unregistered Shares shall bear the following legends:

          THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
          SECURITIES LAWS OF ANY STATE. THEY MAY NOT BE OFFERED FOR SALE, SOLD,
          TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, AND WILL
          NOT BE TRANSFERRED ON THE BOOKS AND RECORDS OF THE COMPANY, UNLESS (i)
          THEY HAVE BEEN REGISTERED UNDER THE ACT AND UNDER APPLICABLE STATE
          SECURITIES LAWS, OR (ii) REGISTRATION UNDER THE ACT AND APPLICABLE
          STATE SECURITIES LAWS IS NOT REQUIRED.

Upon the registration of any shares represented by a certificate bearing this
legend, the Company shall issue replacement certificates free of this legend.

                                      -11-

     6. Adjustments in Authorized Shares and the Option. In the event of a
merger, reorganization, consolidation, recapitalization, reclassification,
split-up, spin-off, separation, liquidation, share dividend, share split,
reverse share split, share combination, share exchange or other change in the
capital structure of the Company affecting the Shares, the Board of Directors of
the Company may substitute or adjust the total number and class of Shares or

other securities that may be issued hereunder, and the Exercise Price, as it
determines to be appropriate and equitable to prevent dilution or enlargement of
the rights of Optionee and to preserve, without diluting or exceeding, the value
of the Option, provided, however, that such adjustments shall be equivalent to
that imposed equally upon all other option holders and/or shareholders in the
Company.

     7. Miscellaneous.

          (a) Tax Withholding. The parties acknowledge and agree that any and
all compensation received by Optionee pursuant to any exercise of the Option
will be self-employment income, and that Optionee shall bear the sole
responsibility with respect to withholding and estimated tax payments on such
compensation.

          (b) Amendment. This Agreement may not be changed or terminated except
by written instrument signed by the parties.

          (c) Successors; Binding Agreement. The Company agrees that:

               (i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to Optionee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no succession had taken place; and

               (ii) This Agreement and all rights of Optionee hereunder shall
inure to the benefit of and be enforceable by Optionee or its successors or
assignees.

          (d) Severability. In the event any provision of this Agreement shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of this Agreement, and this Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included.

          (e) Entire Agreement. This Agreement, including the preambles and
exhibits, together with the Consulting Agreement, sets forth the entire
agreement between the parties as to the subject matter hereof and merges all
prior discussions between them, and neither of the parties shall be bound by any
conditions, definitions, understandings, or representations with respect to such
subject matter other than as expressly provided herein and in the Consulting
Agreement, or as duly set forth subsequent to the effective date hereof in
writing and signed by the duly authorized representatives of both parties.
Without limiting the generality of the foregoing, that certain Letter

                                      -12-

of Intent dated June 7, 1996 between Video Network and the Company shall be and
is null, void and of no further force and effect.

               (f) Governing Law. This Agreement, and the application or
interpretation thereof, shall be governed by the laws of the Commonwealth of
Kentucky.

     IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first above written.

                                       VIDEOLAN TECHNOLOGIES, INC.
                                       (the "Company")

                                       By: /s/ Steven Rothenberg
                                           -------------------------------------
                                       Title:  Vice President Finance

                                       VIDEO NETWORK, INC.
                                       ("Optionee")

                                       By: /s/ Edward Weston
                                           -------------------------------------
                                       Title:  President

                                      -13-

                                   EXHIBIT D

                              VideoLAN Technologies
                         Software Resource Requirements
                        prepared by: Ed Weston, VNS, Inc.

Requirements:

VideoLAN Technologies, Inc. has requested Video Network Services, Inc. to
manage, develop and enhance the current VL2000 videoconferencing application.
The immediate goal is to release the first version of VL2000 to the marketplace
with several enhancements within a very short time frame (target 30 day
release). In order to accomplish this goal, we have identified programming and
design expertise that is necessary and required immediately to support current
resources in this development effort.

Resources:

System design and programming resources are required for short term efforts as
well as for longer periods of time (12 months maximum).

o  Gateway Communications
     ImageLink API expertise
     T1/ISDN experience
     C++ programming

     Visual Basic/Delphi development

          1 Senior Software Engineer            6 Months         Budget:  $58K

o  Communications Port Design
     Data Channel Splitting
     C++ programming
     Senior Communications Port Designer

          2 Senior Software Engineers           2 Months (each)  Budget:  $27K

o  Tools and Administration
     Setup Procedures
     C++/Visual Basic
     Systems Integration
     T1/ISDN experience
     Installation
     Documentation

          1 Senior Software Engineer           12 Months         Budget:  $60K

o  Graphical User Interface
     GUI Design Front-ends 
     Videoconferencing experience 
     C++ programming
     Visual Basic/Delphi experience 
     Gateway Integration into VL2000

          1 Senior Software Engineer            6 Months         Budget:  $35K

Total Estimated Funding:

             Total: Software Engineers (2.3 Person years)                $180K
                    Management, Facilities & Equipment Costs**             27K
                                                                         =====
                                  Total Budget Requirements:             $207K

** See attached Addendum

Recommendations:

It is recommended that Video Network Services, Inc. hire and/or subcontract the
above available resources for the short term efforts. These resources will be
supplied space and equipment in the Scarsdale, NY office to complete their
tasks, as well as having access to the Bluegrass and Milford facilities as
required above and ultimately replaced by VideoLAN with in-house talent as
required during the course of this development effort.

Approvals:
- ---------

 
VideoLAN Technologies, Inc.                 Video Network Services, Inc.

/s/ Steven Rothenberg                       /s/ Edward E. Weston   Date: 7/15/96
- -------------------------  Date:  /  / 96   ---------------------- 
                            July 15, 1996    

Addendum
- --------

Management, Facilities & Equipment Costs Breakdown

Facilities Overhead:          Office Space and Furniture                 $14,500
                              Utilities (Electric)

Administrative Support:       General Accounting                           6,000
                              Legal
                              Payroll
                              Clerical

Equipment:                    PC Development Class Machines                6,500
                                Quantity 3, configured as follows:

                                  166 MHZ Pentium 
                                  32 MB RAM 
                                  X6 CD-ROM Drive 
                                  2 GB Hard Drive 
                                  17" Color Monitor 
                                  Network via Ethernet 
                                  28.8 Modem support
                                                                  Total: $27,000
                                                                  --------------

                    Data Channel Communications Requirements

The following is a description of two (2) Data Channel Handlers required for the
Gateway and Standalone Desktop for the VideoLAN 2000 system. These products will
provide seamless, bi-directional communications for third-party applications
over an ISDN or T1 data channel.

The following has already been achieved and verified:

o    Second party produced software (such as Proshare, Face2Face, terminal,
     PC-Anywhere) require bidirectional communication over COM ports.

o    The Videolan Hub allows communication over COM3 or COM4 between two
     machines looped through the HUB.

o    The ImageLink hardware allows sending of data packets across a connection

     for specific Kernels.

o    Video Network Service has written software to send and receive data packets
     across the ImageLink hardware. The interface is a simple windows messaging
     scheme.

VideoLAN requires the following two product capabilities:

1) On a VL Gateway the data channel handler needs the capability to do the
following two things:

o    Read data off a COM port, packetize it and send it to the VNS software
     controlling the ImageLink Software.

o    Receive Data Packets from the VNS software, queue and Write it to the COM
     port.

2) On a Standalone Desktop the data channel handler needs the capability to do
the following things:

o    Create a virtual Comm Port driver to replace a COM port for 2nd Party
     software to connect to.

o    Read data sent to COM port driver, packetize it and send it to the VNS
     software controlling the ImageLink Software.

o    Receive Data Packets from the VNS software, queue and Write it to the COM
     port driver for the 2nd Party Software to read.

The goal is to have a seamless bidirectional communications going on for the
following three scenarios: 

o    Two standalone machines with 2nd Party Applications talking back to back
     over ISDN or T1 kernels

o    A Desktop machine with 2nd Party Application talking to Gateway to
     Standalone with a 2nd Party Application over ISDN or T1 kernels

o    A Desktop machine with 2nd Party Application talking to Gateway to A
     Gateway (over ISDN or T1 kernels) attached to Desktop machine with 2nd
     Party Application.

The remaining list of requirements for the two products:

1)   All configuration info will be maintained in an .INI file called
     [Illegible] found in the windows directory.
2)   The product can be brought up with (for debug purposes) or without a user
     interface (including icon).
3)   All activity can be recorded (configuration switch) to a log file, and/or
     screen trace without running in a debugger.
4)   Full installation write up (one page step-by-step of how-to setup)
5)   Written for 16-bit windows without Win32s
6)   The code will be commented with function and file headers
7)   Written in one of the following 4 languages MS C, Visual C++, Delphi, or

     Visual Basic
8)   Product will run on Windows 3.x, 95 and NT 3.51.
9)   One Header for external Interface or Constants.
10)  No software which requires a distribution license may be used in final
     products.
11)  Software rights will belong to VNS and/or VideoLAN.
12)  All source code, makes will be delivered and shown to compile on VNS
     equipment. 

Basic Info X:

Name: OPTION AGREEMENT
Type: Option Agreement
Date: Aug. 14, 1996
Company: VIDEOLAN TECHNOLOGIES INC /DE/
State: Delaware

Other info:

Date:

  • August 1996
  • August 5 , 1996
  • June 7 , 1996
  • July 15 , 1996

Organization:

  • Chief Financial Officer
  • Exercise Price of the Shares
  • Board of Directors
  • Commonwealth of Kentucky
  • VideoLAN Technologies Software Resource Requirements
  • Gateway Communications ImageLink API
  • o Communications Port Design Data Channel Splitting C++
  • Management , Facilities & Equipment Costs** 27K ===== Total Budget Requirements
  • VideoLAN Technologies , Inc. Video Network Services , Inc.
  • Facilities & Equipment Costs Breakdown Facilities
  • General Accounting 6,000 Legal Payroll Clerical Equipment
  • PC Development Class Machines
  • Data Channel Communications Requirements
  • Data Channel Handlers
  • 2nd Party Software
  • 2nd Party Applications

Location:

  • Delaware
  • New York
  • Optionee
  • Scarsdale
  • Milford
  • Comm Port

Money:

  • $ 15.50
  • $ 58K
  • $ 27K
  • $ 60K
  • $ 35K
  • $ 180K
  • $ 207K
  • $ 14,500
  • $ 27,000

Person:

  • Optionee
  • Edward Weston
  • Ed Weston
  • Steven Rothenberg
  • Edward E. Weston