Asure Software Inc – ‘8-K’ for 1/6/97 – EX-99

As of:  Wednesday, 1/15/97   ·   For:  1/6/97   ·   Accession #:  899078-97-4   ·   File #:  0-20008

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Vtel Corporation 8-K Filing                            4     14K 
 2: EX-99       Exh. 99.1 - Agrmt and Plan of Merger and Acq.         69    364K 
 3: EX-99       Exh. 99.2 - Stock Option Agreement                    15     56K 
 4: EX-99       Exh. 99.3 - Press Release                              3     13K 

EX-99   —   Exh. 99.2 – Stock Option Agreement

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    EXHIBIT 99.2

STOCK OPTION AGREEMENT

THE TRANSFER OF THIS AGREEMENT IS SUBJECT TO
CERTAIN PROVISIONS CONTAINED HEREIN AND TO
 RESALE RESTRICTIONS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED

         STOCK OPTION  AGREEMENT,  dated  January 6, 1997,  between  Compression
Labs, Incorporated,  a Delaware corporation ("Issuer"),  and VTEL Corporation, a
Delaware corporation ("Grantee").                                               

W I T N E S S E T H:

         WHEREAS,  Grantee and Issuer have entered into an Agreement and Plan of
Merger and Reorganization of even date herewith (the "Merger Agreement"),  which
agreement  has been  executed by the parties  hereto  immediately  prior to this
Stock Option Agreement (the "Agreement"); and                                   

         WHEREAS, as a condition to Grantee's entering into the Merger Agreement
and in consideration therefor, Issuer has agreed to grant Grantee the Option (as
hereinafter defined):                                                           

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
covenants  and  agreements  set forth  herein and in the Merger  Agreement,  the
parties hereto agree as follows:                                                

         1. (a) Issuer  hereby grants to Grantee an  unconditional,  irrevocable
option (the "Option") to purchase,  subject to the terms hereof, up to 3,120,500
fully paid and  nonassessable  shares of Issuer's Common Stock,  par value $.001
per  share  ("Common  Stock"),  at a price of  $4.6575  per share  (the  "Option
Price");  provided,  however,  that in no event  shall  the  number of shares of
Common Stock for which this Option is  exercisable  exceed 19.9% of the Issuer's
issued and  outstanding  shares of Common  Stock  without  giving  effect to any
shares  subject to or issued  pursuant  to the  Option.  The number of shares of
Common Stock that may be received upon the exercise of the Option and the Option
Price are subject to adjustment as herein set forth.                            

                  (b) In the event that any  additional  shares of Common  Stock
are either (i) issued or  otherwise  become  outstanding  after the date of this
Agreement (other than pursuant to this Agreement) or (ii) redeemed, repurchased,
retired or otherwise  cease to be  outstanding  after the date of the Agreement,
the number of shares of Common Stock subject to the Option shall be increased or
decreased,  as  appropriate,  so that,  after such issuance,  such number equals
19.9% of the  number of  shares of Common  Stock  then  issued  and  outstanding
without  giving effect to any shares  subject or issued  pursuant to the Option.
Nothing contained in this Section l(b) or                                       

CORPDAL:59868.4 22768-00022                                                     
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elsewhere in this  Agreement  shall be deemed to authorize  Issuer or Grantee to
breach any provision of the Merger Agreement.                                   

         2. (a) The Holder (as hereinafter  defined) may exercise the Option, in
whole  or part,  and  from  time to time,  if,  but  only  if,  both an  Initial
Triggering Event (as hereinafter defined) and a Subsequent  Triggering Event (as
hereinafter  defined) shall have occurred prior to the occurrence of an Exercise
Termination Event (as hereinafter defined),  provided that the Holder shall have
sent the written  notice of such exercise (as provided in subsection (e) of this
Section 2) within 90 days following such Subsequent  Triggering  Event.  Each of
the following shall be an Exercise Termination Event: (i) the Effective Time (as
defined in the Merger  Agreement) of the Merger;  (ii) termination of the Merger
Agreement in accordance  with the terms  thereof  prior to the  occurrence of an
Initial Triggering Event except a termination of the Merger Agreement by Grantee
pursuant to Section 8.01(b) of the Merger Agreement;  or (iii) the passage of 12
months after termination of the Merger Agreement if such termination follows the
occurrence  of an Initial  Triggering  Event or is a  termination  of the Merger
Agreement  by  Grantee  pursuant  to Section  8.01(b)  of the  Merger  Agreement
provided  that if an Initial  Triggering  Event  continues or occurs beyond such
termination  and prior to the  passage of such  12-month  period,  the  Exercise
Termination  Event shall be 12 months from the expiration of the Last Triggering
Event but in no event  more than 18 months  after  such  termination.  The "Last
Triggering  Event" shall mean the last Initial  Triggering Event to expire.  The
term "Holder" shall mean the holder or holders of the Option.                   

                  (b) The term "Initial  Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:               

                         (i)      Issuer or any of its Subsidiaries (each an
"Issuer  Subsidiary"),  without having received Grantee's prior written consent,
shall have entered into an agreement to engage in an Acquisition Transaction (as
hereinafter  defined)  with any person (the term  "person"  for purposes of this
Agreement  having the meaning  assigned thereto in Sections 3(a)(9) and 13(d)(3)
of the  Securities  Exchange Act of 1934,  as amended (the "1934 Act"),  and the
rules and regulations  thereunder) other than Grantee or any of its Subsidiaries
(each a "Grantee  Subsidiary")  or the Board of  Directors  of Issuer shall have
recommended  that the  stockholders  of Issuer approve or accept any Acquisition
Transaction.  For purposes of this Agreement,  "Acquisition  Transaction"  shall
mean (w) a merger or consolidation, or any similar transaction, involving Issuer
or any  Significant  Subsidiary  (as  defined  in Rule  1-02 of  Regulation  S-X
promulgated by the Securities  and Exchange  Commission  (the "SEC")) of Issuer,
(x) a purchase, lease or other acquisition or assumption of all or a substantial
portion of the assets of Issuer or any Significant  Subsidiary of Issuer,  (y) a
purchase or other acquisition (including by way of merger, consolidation,  share
exchange or  otherwise)  of  securities  representing  10% or more of the voting
power of Issuer, or (z) any substantially similar transaction;                  

                       (ii)     Issuer or any Issuer Subsidiary, without
having  received  Grantee's  prior  written  consent,   shall  have  authorized,
recommended,   proposed  or  publicly  announced  its  intention  to  authorize,
recommend or propose,  to engage in an Acquisition  Transaction  with any person
other than Grantee or a Grantee Subsidiary,  or the Board of Directors of Issuer
shall have                                                                      

CORPDAL:59868.4 22768-00022                                                     
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publicly  withdrawn or modified,  or publicly announced its interest to withdraw
or  modify,  in any manner  adverse  to  Grantee,  its  recommendation  that the
stockholders  of Issuer  approve  the  transactions  contemplated  by the Merger
Agreement;                                                                      

                           (iii)    Any person other than Grantee or any Grantee
Subsidiary  shall have  acquired  beneficial  ownership  or the right to acquire
beneficial  ownership of 10% or more of the  outstanding  shares of Common Stock
(the term  "beneficial  ownership"  for  purposes of this  Agreement  having the
meaning  assigned  thereto in Section  13(d) of the 1934 Act,  and the rules and
regulations thereunder);                                                        

                           (iv)     Any person other than Grantee or any Grantee
Subsidiary shall have made a bona fide proposal to Issuer or its stockholders by
public  announcement or written  communication that is or becomes the subject of
public disclosure to engage in an Acquisition Transaction; or                   

                         (v)      After an overture is made by a third party
to Issuer or its  stockholders to engage in an Acquisition  Transaction,  Issuer
shall have breached any covenant or obligation contained in the Merger Agreement
and such breach (x) would entitle Grantee to terminate the Merger  Agreement and
(y) shall not have been cured prior to the Notice Date (as defined below).      

                  (c) The term "Subsequent  Triggering  Event" shall mean either
of the following events or transactions occurring after the date hereof:        

                          (i)      The acquisition by any person of beneficial
ownership of 20% or more of the then outstanding Common Stock; or               

                       (ii)     The occurrence of the Initial Triggering
Event described in paragraph (i) of subsection (b) of this Section 2, except    
that the percentage  referred to in clause (y) shall be 20%.                    

                  (d) Issuer  shall  notify  Grantee  promptly in writing of the
occurrence of any Initial  Triggering  Event or Subsequent  Triggering  Event of
which it has notice (together,  a "Triggering  Event"), it being understood that
the giving of such notice by Issuer shall not be a condition to the right of the
Holder to exercise the Option.                                                  

                  (e) In the  event  the  Holder is  entitled  to and  wishes to
exercise the Option, it shall send to Issuer a written notice (the date of which
being herein  referred to as the "Notice Date")  specifying (i) the total number
of shares it will  purchase  pursuant to such exercise and (ii) a place and date
not earlier than three  business  days nor later than 60 business  days from the
Notice Date for the closing of such purchase (the "Closing Date"); provided that
if prior  notification  to or approval of any  regulatory  agency is required in
connection  with such  purchase,  the Holder  shall  promptly  file the required
notice or application for approval and shall expeditiously  process the same and
the period of time that otherwise  would run pursuant to this sentence shall run
instead from the date on which any required notification periods have expired   

CORPDAL:59868.4 22768-00022                                                     
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or been  terminated  or such  approvals  have been  obtained  and any  requisite
waiting period or periods shall have passed. Any exercise of the Option shall be
deemed to occur on the Notice Date relating thereto.                            

                  (f) At the  closing  referred  to in  subsection  (e) of  this
Section 2, the Holder shall pay to Issuer the aggregate  purchase  price for the
shares of Common  Stock  purchased  pursuant  to the  exercise  of the Option in
immediately  available  funds by wire  transfer to a bank account  designated by
Issuer,  provided  that  failure or refusal of Issuer to  designate  such a bank
account shall not preclude the Holder from exercising the Option.               

                  (g) At such  closing,  simultaneously  with  the  delivery  of
immediately  available  funds as provided in  subsection  (f) of this Section 2,
Issuer shall deliver to the Holder a certificate  or  certificates  representing
the number of shares of Common Stock  purchased by the Holder and, if the Option
should be  exercised  in part only,  a new Option  evidencing  the rights of the
Holder thereof to purchase the balance of the shares purchasable hereunder,  and
the  Holder  shall  deliver  to  Issuer  a copy of this  Agreement  and a letter
agreeing  that the Holder  will not offer to sell or  otherwise  dispose of such
shares in violation of applicable law or the provisions of this Agreement.      

                  (h)  Certificates  for  Common  Stock  delivered  at a closing
hereunder  may  be  endorsed   with  a   restrictive   legend  that  shall  read
substantially as follows:                                                       

                  "The transfer of the shares represented by this certificate is
                  subject to certain  provisions  of an  agreement  between  the
                  registered holder hereof and Issuer and to resale restrictions
                  arising under the Securities  Act of 1933, as amended.  A copy
                  of such agreement is on file at the principal office of Issuer
                  and will be provided to the holder hereof  without charge upon
     receipt by Issuer of a written request therefor."

It is understood and agreed that:  (i) the reference to the resale  restrictions
of the Securities Act of 1933, as amended (the "1933 Act"),  in the above legend
shall be removed by delivery of substitute  certificates) without such reference
if the Holder  shall have  delivered to Issuer a copy of a letter from the staff
of the  SEC,  or an  opinion  of  counsel,  in  form  and  substance  reasonably
satisfactory  to Issuer,  to the effect  that such  legend is not  required  for
purposes of the 1933 Act; (ii) the reference to the provisions to this Agreement
in the above  legend shall be removed by delivery of  substitute  certificate(s)
without such reference if the shares have been sold or transferred in compliance
with the  provisions  of this  Agreement  and  under  circumstances  that do not
require the retention of such  reference;  and (iii) the legend shall be removed
in its entirety if the conditions in the preceding clauses (i) and (ii) are both
satisfied.  In addition, such certificates shall bear any other legend as may be
required by law.                                                                

                  (i) Upon the  giving by the  Holder  to Issuer of the  written
notice of  exercise  of the Option  provided  for under  subsection  (e) of this
Section  2 and the  tender  of the  applicable  purchase  price  in  immediately
available funds, the Holder shall be deemed to be the holder of                 

CORPDAL:59868.4 22768-00022                                                     
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record  of  the   shares  of  Common   Stock   issuable   upon  such   exercise,
notwithstanding  that the stock transfer books of Issuer shall then be closed or
that  certificates  representing  such shares of Common  Stock shall not then be
actually delivered to the Holder. Issuer shall pay all expenses, and any and all
United  States  federal,  state and local  taxes and other  charges  that may be
payable  in  connection  with  the  preparation,  issue  and  delivery  of stock
certificates  under this  Section 2 in the name of the  Holder or its  assignee,
transferee or designee.                                                         

         3. Issuer agrees:  (i) that it shall at all times  maintain,  free from
preemptive  rights,  sufficient  authorized  but unissued or treasury  shares of
Common   Stock  so  that  the  Option  may  be  exercised   without   additional
authorization  of  Common  Stock  after  giving  effect  to all  other  options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger,  dissolution or sale of assets,  or by any other voluntary act, avoid or
seek  to  avoid  the   observance  or  performance  of  any  of  the  covenants,
stipulations  or  conditions  to be observed or  performed  hereunder by Issuer;
(iii)  promptly  to take  all  action  as may  from  time  to  time be  required
(including  complying  with all  premerger  notification,  reporting and waiting
period requirements  specified in 15 U.S.C.  ss.18a and regulations  promulgated
thereunder) in order to permit the Holder to exercise the Option and Issuer duly
and  effectively  to issue  shares of Common  Stock  pursuant  hereto;  and (iv)
promptly to take all action  provided herein to protect the rights of the Holder
against dilution.                                                               

         4. This  Agreement (and the Option  granted  hereby) are  exchangeable,
without expense, at the option of the Holder, upon presentation and surrender of
this Agreement at the principal office of Issuer, for other Agreements providing
for Options of different denominations entitling the holder thereof to purchase,
on the same terms and subject to the same conditions as are set forth herein, in
the aggregate the same number of shares of Common Stock  purchasable  hereunder.
The terms  "Agreement"  and  "Option"  as used herein  include any Stock  Option
Agreements and related  Options for which this Agreement (and the Option granted
hereby)  may be  exchanged.  Upon  receipt  by  Issuer  of  evidence  reasonably
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Agreement,  and (in the  case of  loss,  theft  or  destruction)  of  reasonably
satisfactory  indemnification,  and  upon  surrender  and  cancellation  of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement  executed and delivered shall  constitute
an additional  contractual  obligation on the part of Issuer, whether or not the
Agreement  so  lost,  stolen,  destroyed  or  mutilated  shall  at any  time  be
enforceable by anyone.                                                          

         5. In  addition  to the  adjustment  in the  number of shares of Common
Stock that are purchasable  upon exercise of the Option pursuant to Section 1 of
this  Agreement,  the  number of shares of  Common  Stock  purchasable  upon the
exercise of the Option and the Option Price shall be subject to adjustment  from
time to time as  provided  in this  Section 5. In the event of any change in, or
distributions  in respect  of, the  Common  Stock by reason of stock  dividends,
split-ups, mergers, recapitalizations,  combinations, subdivisions, conversions,
exchanges  of shares,  distributions  on or in respect of the Common  Stock that
would be prohibited  under the terms of the Merger  Agreement,  or the like, the
type and number of shares of Common Stock  purchasable  upon exercise hereof and
the Option Price shall be  appropriately  adjusted in such manner as shall fully
preserve the economic benefits provided  hereunder and proper provision shall be
made in                                                                         

CORPDAL:59868.4 22768-00022                                                     
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any  agreement  governing  any such  transaction  to  provide  for  such  proper
adjustment and the full satisfaction of the Issuer's obligations hereunder.     

         6. Upon the  occurrence  of a Subsequent  Triggering  Event that occurs
prior to an Exercise  Termination Event, Issuer shall, at the request of Grantee
delivered within 90 days of such Subsequent Triggering Event (whether on its own
behalf or on behalf of any subsequent holder of this Option (or part thereof) or
any of the shares of Common Stock issued  pursuant  hereto),  promptly  prepare,
file and keep current a shelf registration statement under the 1933 Act covering
this Option and any shares issued and issuable pursuant to this Option and shall
use its reasonable best efforts to cause such  registration  statement to become
effective and remain current in order to permit the sale or other disposition of
this Option and any shares of Common Stock issued upon total or partial exercise
of this Option  ("Option  Shares") in  accordance  with any plan of  disposition
requested by Grantee.  Issuer will use its reasonable best efforts to cause such
registration  statement first to become  effective and then to remain  effective
for  such  period  not in  excess  of 180 days  from  the day such  registration
statement  first  becomes  effective or such  shorter time as may be  reasonably
necessary  to effect such sales or other  dispositions.  Grantee  shall have the
right to demand two such registrations.  The foregoing  notwithstanding,  if, at
the time of any  request by  Grantee  for  registration  of the Option or Option
Shares  as  provided  above,  Issuer  is  in  registration  with  respect  to an
underwritten public offering of shares of Common Stock, and if in the good faith
judgment of the managing underwriter or managing underwriters,  or, if none, the
sole underwriter or underwriters, of such offering the inclusion of the Holder's
Option or Option Shares would  interfere  with the  successful  marketing of the
shares of Common Stock offered by Issuer,  the number of Option Shares otherwise
to be covered in the registration  statement contemplated hereby may be reduced;
and  provided,  however,  that after any such  required  reduction the number of
Option  Shares to be  included  in such  offering  for the account of the Holder
shall  constitute  at least 25% of the total  number of shares to be sold by the
Holder and Issuer in the aggregate; and provided further,  however, that if such
reduction  occurs,  then the Issuer shall file a registration  statement for the
balance as promptly as practical and no reduction shall thereafter  occur.  Each
such Holder shall  provide all  information  reasonably  requested by Issuer for
inclusion in any registration  statement to be filed hereunder.  If requested by
any such Holder in  connection  with such  registration,  Issuer  shall become a
party to any  underwriting  agreement  relating to the sale of such shares,  but
only  to  the  extent  of  obligating  itself  in  respect  of  representations,
warranties,  indemnities and other agreements  customarily included in secondary
offering  underwriting  agreements  for the Issuer.  Upon  receiving any request
under this  Section 6 from any Holder,  Issuer  agrees to send a copy thereof to
any other  person  known to Issuer to be entitled to  registration  rights under
this Section 6, in each case by promptly mailing the same,  postage prepaid,  to
the  address  of  record  of  the  persons  entitled  to  receive  such  copies.
Notwithstanding  anything to the contrary  contained  herein,  in no event shall
Issuer be  obligated  to effect  more than two  registrations  pursuant  to this
Section 6 by reason of the fact that there  shall be more than one  Grantee as a
result of any assignment or division of this Agreement.                         

         7. (a)  Immediately  prior to the occurrence of a Repurchase  Event (as
defined  below),  (i) following a request of the Holder,  delivered  prior to an
Exercise  Termination  Event (or such later  period as provided in Section  10),
Issuer (or any successor thereto) shall repurchase the Option from the Holder at
a price (the "Option Repurchase Price") equal to the amount by which            

CORPDAL:59868.4 22768-00022                                                     
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(A) the  Market/Offer  Price (as defined  below)  exceeds (B) the Option  Price,
multiplied  by the number of shares for which this Option may then be  exercised
and (ii) at the  request  of the owner of Option  Shares  from time to time (the
"Owner"),  delivered  within 90 days of such occurrence (or such later period as
provided  in Section  10),  Issuer  shall  repurchase  such number of the Option
Shares from the Owner as the owner shall designate at a price (the "Option Share
Repurchase  Price") equal to the Market/Offer  Price multiplied by the number of
Option  Shares so  designated.  The term  "Market/Offer  Price"  shall  mean the
highest  of (i) the price per share of Common  Stock at which a tender  offer or
exchange offer therefor has been made,  (ii) the price per share of Common Stock
to be paid by any third party  pursuant to an agreement with Issuer entered into
subsequent  to the date hereof,  (iii) the highest  closing  price for shares of
Common Stock within the  six-month  period  immediately  preceding  the date the
Holder gives notice of the required repurchase of this Option or the Owner gives
notice of the required  repurchase of Option Shares, as the case may be, or (iv)
in the event of a sale of all or a substantial  portion of Issuer's assets,  the
sum of the price paid in such sale for such assets and the current  market value
of the  remaining  assets of Issuer as  determined  by a  nationally  recognized
investment  banking firm  mutually  selected by the Holder or the Owner,  as the
case may be, on the one hand,  and the  Issuer,  on the  other,  divided  by the
number of shares of Common Stock of Issuer outstanding at the time of such sale.
In determining the Market/Offer  Price,  the value of  consideration  other than
cash shall be  determined  by a nationally  recognized  investment  banking firm
mutually  selected by the Holder or Owner,  as the case may be, on the one hand,
and the Issuer, on the other.                                                   

                  (b) The Holder and the Owner, as the case may be, may exercise
its right to require  Issuer to  repurchase  the  Option  and any Option  Shares
pursuant to this Section 7 by  surrendering  for such purpose to Issuer,  at its
principal office, a copy of this Agreement or certificates for Option Shares, as
applicable,  accompanied by a written notice or notices  stating that the Holder
or the Owner,  as the case may be, elects to require  Issuer to repurchase  this
Option  and/or the  Option  Shares in  accordance  with the  provisions  of this
Section  7.  Within  the  latter to occur of (x) five  business  days  after the
surrender of the Option and/or  certificates  representing Option Shares and the
receipt of such  notice or  notices  relating  thereto  and (y) the time that is
immediately prior to the occurrence of a Repurchase Event,  Issuer shall deliver
or cause to be delivered to the Holder the Option Repurchase Price and/or to the
Owner the Option Share  Repurchase  Price  therefor or the portion  thereof that
issuer  is not then  prohibited  under  applicable  law and  regulation  from so
delivering.                                                                     

                  (c) To the extent that Issuer is prohibited  under  applicable
law or regulation from repurchasing the Option and/or the Option Shares in full,
Issuer shall  immediately  so notify the Holder and/or the Owner and  thereafter
deliver or cause to be  delivered,  from time to time,  to the Holder and/or the
Owner, as appropriate, the portion of the Option Repurchase Price and the Option
Share  Repurchase  Price,  respectively,  that it is no longer  prohibited  from
delivering,  within  five  business  days  after the date on which  Issuer is no
longer so  prohibited;  provided,  however,  that if  Issuer  at any time  after
delivery of a notice of  repurchase  pursuant to paragraph (b) of this Section 7
is prohibited  under  applicable law or regulation from delivering to the Holder
and/or the Owner, as  appropriate,  the Option  Repurchase  Price and the Option
Share Repurchase Price,  respectively,  in full (and Issuer hereby undertakes to
use its best efforts to obtain all required  regulatory and legal  approvals and
to file any required notices as promptly as practicable                         

CORPDAL:59868.4 22768-00022                                                     
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in order to  accomplish  such  repurchase),  the  Holder or Owner may revoke its
notice of  repurchase  of the Option or the Option  Shares either in whole or to
the extent of the  prohibition,  whereupon,  in the latter  case,  Issuer  shall
promptly  (i)  deliver to the Holder  and/or the  Owner,  as  appropriate,  that
portion of the Option Repurchase Price or the Option Share Repurchase Price that
Issuer is not prohibited  from  delivering;  and (ii) deliver,  as  appropriate,
either (A) to the Holder, a new Stock Option  Agreement  evidencing the right of
the  Holder to  purchase  that  number of shares  of Common  Stock  obtained  by
multiplying the number of shares of Common Stock for which the surrendered Stock
Option  Agreement  was  exercisable  at the time of  delivery  of the  notice of
repurchase by a fraction,  the numerator of which is the Option Repurchase Price
less the portion thereof theretofore delivered to the Holder and the denominator
of which is the Option  Repurchase Price, or (B) to the Owner, a certificate for
the Option Shares it is then so prohibited from repurchasing.                   

                  (d) For purposes of this  Section 7, a Repurchase  Event shall
be  deemed  to  have  occurred  (i)  upon  the   consummation   of  any  merger,
consolidation or similar transaction involving Issuer or any purchase,  lease or
other  acquisition  of all or a  substantial  portion of the assets of Issuer or
(ii) upon the  acquisition by any person of beneficial  ownership of 50% or more
of the then  outstanding  shares of Common  Stock,  provided  that no such event
shall constitute a Repurchase  Event unless a Subsequent  Triggering Event shall
have occurred prior to an Exercise  Termination  Event. The parties hereto agree
that Issuer's  obligations  to repurchase the Option or Option Shares under this
Section 7 shall not terminate  upon the  occurrence  of an Exercise  Termination
Event unless no Subsequent  Triggering  Event shall have  occurred  prior to the
occurrence of an Exercise Termination Event.                                    

         8. (a) In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate  with or merge into any person,
other than Grantee or one of its  Subsidiaries,  and shall not be the continuing
or surviving  corporation of such  consolidation  or merger,  (ii) to permit any
person, other than Grantee or one of its Subsidiaries,  to merge into Issuer and
Issuer  shall be the  continuing  or  surviving  corporation,  but, in with such
merger,  the then outstanding shares of Common Stock shall into or exchanged for
stock or other  securities  of any other  person any other  property or the then
outstanding  shares of Common Stock shall after such merger  represent less than
50% of the outstanding  voting shares and voting share equivalents of the merged
company,  or (iii) to sell or otherwise transfer all or substantially all of its
assets to any person,  other than Grantee or one of its Subsidiaries,  then, and
in each such case, the agreement  governing such  transaction  shall make proper
provision  so  that  the  Option  shall,  upon  the  consummation  of  any  such
transaction  and upon the terms and  conditions  set forth herein,  be converted
into, or exchanged for, an Option (the "Substitute  Option"), at the election of
the Holder, of either (x) the Acquiring  Corporation (as hereinafter defined) or
(y) any person that controls the Acquiring Corporation.                         

             (b)      The following terms have the meanings indicated:

                         (1)      "Acquiring Corporation" shall mean (i) the
continuing or surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (ii) Issuer in a merger                                     

CORPDAL:59868.4 22768-00022                                                     
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in which Issuer is the continuing or surviving person,  and (iii) the transferee
of all or substantially all of Issuer's assets.                                 

                       (2)      "Substitute Common Stock" shall mean the
common stock issued by the issuer of the Substitute Option upon exercise of the 
Substitute Option.                                                              

                           (3)      "Assigned Value" shall mean the Market/Offer
Price, as defined in Section 7.                                                 

                     (4)      "Average Price" shall mean the average
closing  price  of a share  of the  Substitute  Common  Stock  for the one  year
immediately preceding the consolidation,  merger or sale in question,  but in no
event higher than the closing price of the shares of Substitute  Common Stock on
the day preceding such consolidation, merger or sale; provided that if Issuer is
the issuer of the  Substitute  Option,  the Average Price shall be computed with
respect to a share of common stock  issued by the person  merging into Issuer or
by any company which controls or is controlled by such person, as the Holder may
elect.                                                                          

                  (c) The  Substitute  Option  shall  have the same terms as the
Option,  provided,  that if the terms of the Substitute Option cannot, for legal
reasons,  be the same as the Option,  such terms shall be as similar as possible
and in no event less  advantageous  to the Holder.  The issuer of the Substitute
Option shall also enter into an agreement with the then Holder or Holders of the
Substitute Option in substantially the same form as this Agreement,  which shall
be applicable to the Substitute Option.                                         

                  (d) The Substitute Option shall be exercisable for such number
of  shares  of  Substitute  Common  Stock  as is  equal  to the  Assigned  Value
multiplied  by the number of shares of Common Stock for which the Option is then
exercisable,  divided by the Average Price. The exercise price of the Substitute
Option per share of  Substitute  Common  Stock shall then be equal to the Option
Price  multiplied  by a fraction,  the numerator of which shall be the number of
shares  of  Common  Stock for  which  the  Option  is then  exercisable  and the
denominator  of which shall be the number of shares of  Substitute  Common Stock
for which the Substitute Option is exercisable.                                 

                  (e) In no event,  pursuant to any of the foregoing paragraphs,
shall the Substitute  Option be exercisable for more than 19.9% of the shares of
Substitute Common Stock outstanding prior to exercise of the Substitute  Option.
In the event that the Substitute Option would be exercisable for more than 19.9%
of the shares of Substitute  Common Stock  outstanding prior to exercise but for
this clause (e), the issuer of the  Substitute  Option (the  "Substitute  Option
Issuer")  shall  make a cash  payment  to Holder  equal to the excess of (i) the
value of the  Substitute  Option without giving effect to the limitation in this
clause (e) over (ii) the value of the  Substitute  Option after giving effect to
the limitation in this clause (e). This  difference in value shall be determined
by a nationally recognized investment banking firm selected by the Holder or the
Owner,  as  the  case  may  be,  and  reasonably  acceptable  to  the  Acquiring
Corporation.                                                                    

CORPDAL:59868.4 22768-00022                                                     
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                  (f) Issuer shall not enter into any  transaction  described in
subsection (a) of this Section 8 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder.                                                               

         9. (a) At the  request  of the  holder of the  Substitute  Option  (the
"Substitute  Option Holder"),  the Substitute Option Issuer shall repurchase the
Substitute  Option from the Substitute Option Holder at a price (the "Substitute
Option  Repurchase  Price")  equal to (x) the  amount by which  (i) the  Highest
Closing Price (as  hereinafter  defined)  exceeds (ii) the exercise price of the
Substitute Option, multiplied by the number of shares of Substitute Common Stock
for  which  the  Substitute  Option  may then be  exercised  plus (y)  Grantee's
reasonable out-of-pocket expenses (to the extent not previously reimbursed), and
at the  request  of the  owner  (the  "Substitute  Share  Owner")  of  shares of
Substitute Common Stock (the "Substitute Shares"),  the Substitute Option Issuer
shall  repurchase  the  Substitute  Shares  at a price  (the  "Substitute  Share
Repurchase  Price")  equal to (x) the Highest  Closing  Price  multiplied by the
number  of  Substitute  Shares  so  designated  plus  (y)  Grantee's  reasonable
out-of-pocket  expenses  (to the extent  not  previously  reimbursed).  The term
"Highest  Closing  Price"  shall mean the  highest  closing  price for shares of
Substitute  Common Stock within the six-month period  immediately  preceding the
date the Substitute Option Holder gives notice of the required repurchase of the
Substitute  Option or the  Substitute  Share Owner gives  notice of the required
repurchase of the Substitute Shares, as applicable.                             

                  (b) The  Substitute  Option  Holder and the  Substitute  Share
Owner,  as the case may be, may  exercise  its  respective  right to require the
Substitute  Option Issuer to repurchase the Substitute Option and the Substitute
Shares  pursuant  to this  Section 9 by  surrendering  for such  purpose  to the
Substitute  Option  Issuer,  at its  principal  office,  the  agreement for such
Substitute  Option  (or,  in the  absence of such an  agreement,  a copy of this
Agreement)  and  certificates  for  Substitute  Shares  accompanied by a written
notice or notices  stating that the  Substitute  Option Holder or the Substitute
Share Owner, as the case may be, elects to require the Substitute  Option Issuer
to repurchase the Substitute  Option and/or the Substitute  Shares in accordance
with the  provisions of this Section 9. As promptly as  practicable,  and in any
event within five  business days after the  surrender of the  Substitute  Option
and/or  certificates  representing  Substitute  Shares  and the  receipt of such
notice or notices relating  thereto,  the Substitute Option Issuer shall deliver
or cause to be delivered to the Substitute  Option Holder the Substitute  Option
Repurchase  Price  and/or to the  Substitute  Share Owner the  Substitute  Share
Repurchase  Price  therefor or, in either case,  the portion  thereof  which the
Substitute  Option  Issuer  is not  then  prohibited  under  applicable  law and
regulation from so delivering.                                                  

                  (c) To  the  extent  that  the  Substitute  Option  Issuer  is
prohibited under  applicable law or regulation from  repurchasing the Substitute
Option and/or the Substitute  Shares in part or in full,  the Substitute  Option
Issuer  following a request  for  repurchase  pursuant  to this  Section 9 shall
immediately so notify the Substitute  Option Holder and/or the Substitute  Share
Owner and thereafter deliver or cause to be delivered, from time to time, to the
Substitute Option Holder and/or the Substitute Share Owner, as appropriate,  the
portion of the Substitute Share Repurchase Price,  respectively,  which it is no
longer  prohibited from delivering,  within five business days after the date on
which  the  Substitute  Option  Issuer is no  longer  so  prohibited;  provided,
however, that if the Substitute Option Issuer is at any time after delivery of a
notice of repurchase pursuant                                                   

CORPDAL:59868.4 22768-00022                                                     
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to  subsection  (b)  of  this  Section  9  prohibited  under  applicable  law or
regulation from delivering to the Substitute Option Holder and/or the Substitute
Share Owner,  as appropriate,  the Substitute  Option  Repurchase  Price and the
Substitute Share  Repurchase  Price,  respectively,  in full (and the Substitute
Option Issuer shall use its best efforts to receive all required  regulatory and
legal  approvals  as  promptly  as  practicable  in  order  to  accomplish  such
repurchase),  the Substitute  Option Holder or Substitute Share Owner may revoke
its notice of  repurchase  of the  Substitute  Option or the  Substitute  Shares
either in whole or to the extent of the  prohibition,  whereupon,  in the latter
case, the Substitute  Option Issuer shall promptly (i) deliver to the Substitute
Option Holder or Substitute  Share Owner,  as  appropriate,  that portion of the
Substitute Option Repurchase Price or the Substitute Share Repurchase Price that
the  Substitute  Option  Issuer  is not  prohibited  from  delivering;  and (ii)
deliver,  as  appropriate,  either (A) to the Substitute  Option  Holder,  a new
Substitute  Option  evidencing  the  right of the  Substitute  Option  Holder to
purchase  that  number of shares of the  Substitute  Common  Stock  obtained  by
multiplying  the number of shares of the  Substitute  Common Stock for which the
surrendered  Substitute  Option was  exercisable  at the time of delivery of the
notice of  repurchase by a fraction,  the  numerator of which is the  Substitute
Option  Repurchase Price less the portion thereof  theretofore  delivered to the
Substitute  Option Holder and the denominator of which is the Substitute  Option
Repurchase  Price,  or (B) to the Substitute  Share Owner, a certificate for the
Substitute Common Shares it is then so prohibited from repurchasing.            

         10. The 90-day period for exercise of certain  rights under Sections 2,
6, 7, 9 and 13 shall be  extended:  (i) to the  extent  necessary  to obtain all
regulatory  approvals for the exercise of such rights, and for the expiration of
all  statutory  waiting  periods;  and  (ii) to the  extent  necessary  to avoid
liability under Section 16(b) of the 1934 Act by reason of such exercise.       

       11.      Issuer hereby represents and warrants to Grantee as follows:

                  (a) Issuer has full  corporate  power and authority to execute
and deliver this  Agreement  and to  consummate  the  transactions  contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions  contemplated  hereby have been duly and validly  authorized by the
Board of Directors of Issuer and no other  corporate  proceedings on the part of
Issuer  are  necessary  to  authorize   this  Agreement  or  to  consummate  the
transactions so contemplated.  This Agreement has been duly and validly executed
and  delivered  by  Issuer,  and  constitutes  a legal  and  binding  agreement,
enforceable against Issuer in accordance with its terms.                        

                  (b)  Issuer  has  taken  all  necessary  corporate  action  to
authorize and reserve and to permit it to issue,  and at all times from the date
hereof through the  termination  of this Agreement in accordance  with its terms
will have reserved for issuance upon the exercise of the Option,  that number of
shares of Common Stock equal to the maximum  number of shares of Common Stock at
any time and from time to time  issuable  hereunder,  and all such shares,  upon
issuance pursuant hereto, will be duly authorized,  validly issued,  fully paid,
nonassessable,  and will be  delivered  free and  clear  of all  claims,  liens,
encumbrance and security interests and not subject to any preemptive rights.    

 12.      Grantee hereby represents and warrants to Issuer that:

CORPDAL:59868.4 22768-00022                                                     
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                  (a) Grantee has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals or consents  referred to
herein, to consummate the transactions  contemplated  hereby.  The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary  corporate  action on the part
of Grantee.  This Agreement has been duly executed and delivered by Grantee, and
constitutes  a legal and  binding  agreement,  enforceable  against  Grantee  in
accordance with its terms.                                                      

                  (b) The Option is not being, and any shares of Common Stock or
other  securities  acquired by Grantee upon  exercise of the Option will not be,
acquired  with a  view  to the  public  distribution  thereof  and  will  not be
transferred  or  otherwise  disposed of except in a  transaction  registered  or
exempt from registration under the Securities Act.                              

         13.  Neither  of the  parties  hereto  may  assign any of its rights or
obligations  under this Option Agreement or the Option created  hereunder to any
other person,  without the express  written  consent of the other party,  except
that in the event a Subsequent  Triggering Event shall have occurred prior to an
Exercise Termination Event,  Grantee,  subject to the express provisions hereof,
may assign in whole or in part its rights and  obligations  hereunder  within 90
days  following  such  Subsequent  Triggering  Event  (or such  later  period as
provided in Section 10).                                                        

         14. Each of Grantee  and Issuer  will use its best  efforts to make all
filings  with,  and to obtain  consents of, all third  parties and  governmental
authorities  necessary to the consummation of the  transactions  contemplated by
this Agreement,  including  without  limitation  making  application to list the
shares of Common  Stock  issuable  hereunder  on the Nasdaq  Stock  Market  upon
official notice of issuance.                                                    

         15. The parties hereto  acknowledge that damages would be an inadequate
remedy  for a breach of this  Agreement  by  either  party  hereto  and that the
obligations  of the parties  hereto shall be  enforceable by either party hereto
through injunctive or other equitable relief.                                   

         16. If any term,  provision,  covenant or restriction contained in this
Agreement  is held  by a court  or a  federal  or  state  regulatory  agency  of
competent  jurisdiction to be invalid,  void or unenforceable,  the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or  invalidated.  If for any reason such court or regulatory  agency  determines
that the Holder is not  permitted  to  acquire,  or Issuer is not  permitted  to
repurchase  pursuant  to  Section 7, the full  number of shares of Common  Stock
provided in Section  l(a)  hereof (as  adjusted  pursuant  to Section  l(b) or 5
hereof), it is the express intention of Issuer to allow the Holder to acquire or
to  require  Issuer  to  repurchase  such  lesser  number  of  shares  as may be
permissible, without any amendment or modification hereof.                      

         17. All notices,  requests,  claims,  demands and other  communications
hereunder  shall be deemed to have been duly given when delivered in person,  by
cable, telegram,  telecopy or telex, or by registered or certified mail (postage
prepaid,  return receipt  requested) at the respective  addresses of the parties
set forth in the Merger Agreement.                                              

CORPDAL:59868.4 22768-00022                                                     
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         18. This  Agreement  shall be governed by and  construed in  accordance
with the laws of the  State  of  Delaware,  regardless  of the laws  that  might
otherwise govern under applicable principles of conflicts of laws thereof.      

      19.      This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which shall         
constitute one and the same agreement.                                          

         20. Except as otherwise  expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its behalf
in connection with the transactions  contemplated hereunder,  including fees and
expenses of its own financial consultants,  investment bankers,  accountants and
counsel.                                                                        

         21.  Except as  otherwise  expressly  provided  herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the  transactions  contemplated  hereunder and  supersedes  all prior
arrangements or understandings with respect thereof,  written or oral. The terms
and  conditions of this  Agreement  shall inure to the benefit of and be binding
upon the parties hereto and their respective  successors and permitted  assigns.
Nothing in this Agreement,  expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective  successors except as
assigns, any rights, remedies,  obligations or liabilities under or by reason of
this Agreement, except as expressly provided herein.                            

   22.      Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned thereto in the Merger Agreement.        

CORPDAL:59868.4 22768-00022                                                     
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CORPDAL:59868.4 22768-00022                                                     
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         IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized,  all as of the
date first above written.                                                       

                            COMPRESSION LABS, INC.

                  By:     /s/Thomas Gary Trimm
             Name:     Thomas Gary Trimm
                                Title:     President and Chief Executive Officer

                      VTEL CORPORATION

                  By:     /s/F.H.(Dick)Moeller
             Name:     F.H.(Dick)Moeller
                               Title:     Chairman and Chief Executive Officer

CORPDAL:59868.4 22768-00022                                                     
                                  15

Dates Referenced Herein

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
Filed on:		1/15/97							None on these Dates
For Period End:		1/6/97		1
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