Document:

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                                                                    EXHIBIT 10.8

                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

                                 [AVISTAR LOGO]

                          PREFERRED SUPPLIER AGREEMENT

                                     between

                              AVISTAR SYSTEMS L.P.

                                       and

                                  TANDBERG INC.

                      EFFECTIVE DATE: JUNE 24, 1997
                   AGREEMENT NUMBER:_________________________

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                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

                              AVISTAR SYSTEMS, L.P.
                                 TANDBERG, INC.
                          PREFERRED SUPPLIER AGREEMENT

        THIS Preferred Supplier Agreement (the "Agreement") is entered into as
of this 24th day of June 1997 (the "Effective Date") by and between Avistar
Systems LP, a Nevada limited partnership having a place of business at 264
Village Blvd, #2B, Incline Village, Nevada 89452 ("Avistar") Tandberg, Inc., a
US corporation, having a place of business at 360 Herndon Parkway, Suite 2200,
Herndon, VA 20170 ("Tandberg" or "Company").

                                    RECITALS

        A. Tandberg is in a position to offer Avistar high quality, video
technology for incorporation into Avistar's collaborative multimedia products.
As a major OEM supplier, Tandberg is prepared to support the purchase and resale
by Avistar to Avistar Customers by ensuring the quality, on-time delivery and
competitive pricing of its products and, in particular Tandberg's Video Network
Gateway Codec product known as the Tandberg TC 2000 (previously know as the
Tandberg 6000/6000i), which is further specified as set forth in Exhibit A
("Product Specifications") (the "Tandberg TC 2000"). Such support shall occur
solely in accordance with the terms of this Agreement.

        B. Avistar, a developer and manufacturer of certain computer software,
hardware and networking products which enable collaborative multimedia
applications, has made substantial investments in resource, time and development
effort in exploring the feasibility of utilizing Tandberg's Tandberg TC 2000 as
a component of the Avistar Systems and to achieve FCC, EC and other regulatory
approval for such combined product. Avistar now wishes to acquire such Tandberg
TC 2000 for such purposes based upon its investigation into Tandberg, its
facilities and its products.

        C. Tandberg is willing to manufacture and sell Tandberg TC 2000 units to
Avistar, and Avistar is willing to purchase Tandberg TC 2000 units from
Tandberg, subject to and in accordance with the provisions of this Agreement.

        D. In addition to the purchase and sale aspects of this Agreement, the
parties believe that substantial mutual benefit could be derived through the
further development of the relationship in the future and upon gaining a deeper
understanding of each others products. To facilitate such effort, the parties
will each provide the other certain of its products as development and
demonstration as further described below in Section 8 of this Agreement.

        E. In considerations for the benefits to be received under this
Agreement, subject to further agreement to be reached and executed, Tandberg may
also be willing to support Avistar's marketing endeavors by promoting Avistar's
collaborative multimedia products at major trade shows at which Tandberg
exhibits and by issuing a statement of Tandberg's endorsement of such
applications for Avistar's public relations use. Similarly, Avistar may be
willing to endorse Tandberg's Product and designate it a Preferred Product.

        F. In considerations for the benefits to be received under this
Agreement, subject to further agreement to be reached and executed within thirty
(30) days from the Effective Date,

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                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

Avistar and Tandberg may enter into an arrangement whereby Avistar will assist
Tandberg by taking hotline support calls from Tandberg's US and Canadian
customers on its behalf through Avistar's twenty-four hour Telephone Support
Center.

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                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

                                    AGREEMENT

        NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, Avistar and Tandberg agree as follows:

I       DEFINITIONS

        1.1 "Conforming Unit" means each Tandberg TC 2000 which conforms to the
Specifications, specifically the requirement to operate at less than 300 (formal
verification procedure to be determined by mutual agreement of the parties) ms
round-trip latency, and which is free from defects in materials and workmanship.

        1.2 "End Date" means the date two (2) years following the date of
delivery by Tandberg of the first order as specified in Section 2.1(b) or such
subsequent date as is mutually agreed by Avistar and Tandberg.

        1.3 "Order Date" means the order date specified in Tandberg's order
acknowledgment for units of the Tandberg TC 2000.

        1.4 "Specifications" means the functional and technical specifications
of the Tandberg TC 2000, which are attached as Exhibit A ("Tandberg TC 2000
Specifications").

II      PRODUCT ORDERING, PAYMENT, PRICING, ETC.

        2.1 Ordering and Shipment.

               (a) Avistar expects to purchase approximately * Tandberg TC 2000
units, or more, during the Initial Term of this Agreement but no less than *
Tandberg TC 2000 units. Avistar agrees to provide Tandberg with a non-binding
forecast, updated quarterly, of Avistar's anticipated requirements for Tandberg
TC 2000 units, by quarter, during the four (4) quarter period following each
such forecast. Tandberg acknowledges that such forecasts are estimates only, are
inherently uncertain, and are not purchase orders or otherwise binding on the
parties provided that Avistar understands that such estimates are utilized as a
guideline in determining production requirements, thereby possibly having an
impact on delivery scheduling.

               (b) Subject to meeting the Specifications by the requested
shipment date as described in Exhibit A, this Agreement shall constitute
Avistar's initial purchase order of * Tandberg TC 2000 units. Tandberg may
invoice Avistar, in advance, for * TC 2000 units in conjunction with delivery of
the Avistar Units described in Section 8. Payment terms for the * units will be
net thirty days. Avistar requests shipment by August 1, 1997 or as soon
thereafter as possible and, in no event, later than thirty (30) days thereafter.
Ship to address will be the following Avistar location:

                                            Avistar Systems, L.P.
                                            992 San Antonio Rd
                                            Palo Alto, CA   94303

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

               (c) Provided that Avistar is not in breach of one or more of the
terms of this Agreement, Tandberg shall, within ten (10) days of each Avistar
purchase order, issue a written acknowledgment of Avistar's purchase order.
Avistar's purchase orders may be canceled without penalty provided written
notice thereof is received by Tandberg at least forty-five (45) days prior to
Avistar's requested shipment date. Within forty-five (45) days prior to
Avistar's requested shipment date, orders may be rescheduled by up to ninety
(90) days without penalty or canceled subject to a cancellation penalty of *.
Tandberg shall comply with all instructions of Avistar to reschedule shipments
provided that Tandberg receives such rescheduling instructions at least thirty
(30) days prior to Avistar's requested shipment date.

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

Tandberg agrees to ship units of the Tandberg TC 2000 to Avistar in accordance
with shipment dates, routing instructions, quantities, shipping addresses, and
manners of shipment specified in Avistar's purchase orders provided that such
dates, instructions, quantities, shipping addresses and manners of shipment
specified are not in violation of the terms of this Agreement.

               (d) Tandberg shall not be in breach based on a failure to timely
ship units as to which Avistar's purchase order is received less than thirty
(30) days prior to the requested shipment date. However, Tandberg agrees to use
all reasonable efforts to provide units with less than thirty (30) days
lead-time where Avistar designates a purchase order as a "Priority Order."
Tandberg acknowledges that its failure to ship units by Avistar's requested
shipment date (but not sooner than thirty (30) days following receipt of
Avistar's purchase order) (the "Required Shipment Date") may damage Avistar's
ability to fulfill Avistar's obligations to its customers. Tandberg therefore
agrees to use its best efforts to make on time deliveries.

        2.2 Product Availability. Tandberg agrees to maintain the Tandberg TC
2000, or substantially equivalent enhanced version, in production and make it
available for purchase by Avistar for any term of this Agreement. Thereafter,
Tandberg may cease availability of the Tandberg TC 2000 if Tandberg has given
nine (9) months prior written notice to Avistar provided that supplies are still
reasonably available on substantially similar material terms as of the date
thereof. Such notice shall specify the date of final availability of the
Tandberg TC 2000 units from Tandberg and, after Avistar's receipt of such
notice, Tandberg shall not be obligated to accept Avistar's purchase orders
specifying shipment dates for Tandberg TC 2000 units subsequent to the date of
final availability. Tandberg agrees to provide maintenance and support for
Tandberg TC 2000 for at least * from the Effective Date, but no less than the
initial and any subsequent renewal terms of this Agreement.

        2.3 Payment Terms; Invoices. Tandberg may invoice Avistar for Tandberg
TC 2000 units following shipment (but not earlier than Avistar's requested
shipment date, as it may have been rescheduled under subsection (b) of Section
2.1 (Ordering and Shipment)). Avistar shall pay such invoices within *
receipt. Each invoice shall indicate the shipping date and method, the
destination address, the model number(s) of the units shipped, and be
accompanied by a bill of lading or other documentation issued by the carrier. At
Tandberg's discretion, late fees of *, or the maximum charge
permitted by law, whichever is less, will be charged on any overdue accounts
which remain overdue beyond * from payment due date. Tandberg may suspend
shipments in the event Avistar's account becomes delinquent and overdue for more
than * from the payment due date and Avistar waives any claims for any and all
damages resulting from such suspended shipments.

        2.4 Shipments. Shipments shall be packaged (i) in accordance with good
commercial practice and (ii) in a manner acceptable to common carriers and
suitable for air transport. Shipment terms shall be F.O.B. Sterling, Virginia
for US deliveries and FOB Oslo, Norway for all other countries, unless otherwise
agreed in writing by the parties.

        2.5 Prices.

               (a) During the Initial Term of this Agreement, on the basis of a
retail price of *, the unit price of each Tandberg TC 2000 purchased by Avistar
hereunder shall be in accordance with the pricing table below. In the event
Tandberg's published retail price for Tandberg TC 2000 is reduced, Avistar shall
pay at an equivalent discount percentage basis off the new lower retail price.

        Pricing Table - Tandberg TC 2000 Units (US Dollars) *

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                                             Confidential Treatment Requested by
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               (b) Avistar and Tandberg shall negotiate in good faith, beginning
* prior to Initial Term expiration, or such other date as is mutually agreed in
writing, and on each subsequent anniversary thereof, to determine (based on
changes in Tandberg's costs and Avistar's volume and prices of similar
commercially available equipment) any price changes applicable for the following
contract term. The parties may, at any time, upon mutual written agreement
revise the discount schedule to reflect a lower price if Avistar's purchase
volumes warrant it.

        2.6 Product Enhancements. Tandberg agrees to keep Avistar fully informed
of any improvements to the Tandberg TC 2000 and all developments by Tandberg of
other products with similar or enhanced functionality. Specifically, Tandberg
agrees to give due consideration to Avistar's requested * requirements as
identified in Exhibit A attached hereto and to consider, as a priority,
inclusion or some or all of the identified functionality. Tandberg agrees to
consult with Avistar concerning such improvements and developments with the
objective of avoiding incompatibility with Avistar's tooling and applications
involving the Tandberg TC 2000. However, nothing in this provision shall be
construed as forming a binding commitment on the part of Tandberg to include in
its development plan any or all of Avistar's requested * requirements. Tandberg
shall give Avistar the opportunity, on terms not less favorable than those
offered herein and to other customers of Tandberg purchasing in substantially
the same quantities as Avistar, to purchase such similar or enhanced products.
Avistar agrees to keep Tandberg fully informed of any improvements and/or
enhanced functionality of any Avistar Systems.

        2.7 Problem Reports. In addition to the requested data identified in
Exhibit A which shall be submitted to Avistar in conjunction with execution of
this Agreement, Tandberg shall promptly notify Avistar of any matter which has
delayed or could delay product quality or scheduled deliveries, including
details of the anticipated effects on Tandberg's performance of its obligations
under this Agreement and keep Avistar updated on known problems and failure
rates of the Tandberg TC 2000.

III     ACCEPTANCE; WARRANTY; INDEMNIFICATION

        3.1 Product Acceptance. For each unit of the Tandberg TC 2000, Avistar
shall have * from the date such unit is received by Avistar (the "Acceptance
Period") to examine and test the unit to determine whether its is a Conforming
Unit. Tandberg shall provide Avistar certificates of the Tandberg TC 2000
conformance to specifications. During the Acceptance Period for each unit,
Avistar may (i) accept the unit or (ii) reject the unit by notifying Tandberg in
writing of the manner in which the unit fails to conform. In the event that a
unit is rejected, Avistar may, at Tandberg's expense and without cost to
Avistar, return the unit to Tandberg, freight collect, for repair or replacement
with a new Conforming Unit. Avistar shall obtain a Return Material Authorization
Number from Tandberg which Avistar shall refer to on all boxes containing the
rejected unit(s). Units that are replaced or repaired pursuant to this section
shall be subject to a new Acceptance Period. The product warranty period set
forth in Section 3.2 (Product Warranty) below shall run from Avistar's
acceptance of a Conforming Unit. Non-conforming, rejected units shall be
replaced promptly, but in no event later than * from notice of rejection and
return of the rejected units to Tandberg by Avistar. Failure by Avistar to
reject in accordance with the terms of this Section 3.1 shall be deemed an
acceptance of such unit(s) by Avistar.

        3.2 Product Warranty.

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

               (a) Tandberg warrants to Avistar that, for a period of * from the
date of Avistar's shipment to Avistar's customer of a product incorporating a
Tandberg TC 2000 unit (but no longer than * from the date of Tandberg's shipment
to Avistar), such Tandberg TC 2000 unit will continue to be a Conforming Unit.
This warranty shall not apply to the Tandberg TC 2000 units not used in
accordance with any normal operating conditions described in the Specifications.
Tandberg agrees to promptly ship within * replacement units to Avistar for all
Tandberg TC 2000, or components thereof, that fail and are deemed inoperable.
Tandberg shall ship such replacements components to Avistar as promptly as
reasonably possible.

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

Such replacement units shall be shipped to the address requested by Avistar, if
different from Avistar's Palo Alto facilities Tandberg shall be responsible for
all costs of shipping defective units to Avistar up to an amount equivalent to
the domestic shipping rate within the US for US orders and the inter-country
European rate for international orders. Avistar shall obtain a Return Material
Authorization Number from Tandberg which Avistar shall refer to on all boxes
containing the rejected unit(s). Thereafter, Tandberg shall only be obliged to
provide service, repair and maintenance to Avistar subject to the purchase of
maintenance services from Tandberg under provisions to be mutually agreed by the
parties. All failed units must be return by Avistar to Tandberg promptly but no
later than * of receipt of replacement units. Failure to do so may result in
suspension of all further service or replacement units until Avistar returns
failed units or provides Tandberg payment/purchase order to cover such failed
units. Avistar shall be responsible for the packing and shipping to all such
units returned to Tandberg.

               (b) The above warranty shall be null and void if the Tandberg TC
2000 provided hereunder have (i) been modified by persons or companies other
than Tandberg or as otherwise authorized, in writing, by Tandberg; or (ii) not
been properly stored or maintained. This warranty is limited to repair or
replacement of defective parts. Except as otherwise stated elsewhere in this
Agreement, all risk of loss and costs incurred in connection with the
transportation of defective parts shall be borne by Avistar.

               (c) Avistar acknowledges and agrees that the warranty provided
herein is to Avistar only. Avistar shall provide a warranty directly to each of
its customers at its discretion, and will include language disclaiming the
implied warranties of merchantability, fitness for a particular purpose, and
shall not provide any warranty on behalf of Tandberg. Avistar will make no
representations or warranties on behalf of Tandberg. Upon written demand,
Avistar will indemnify and defend Tandberg against all claims and damages of a
third party, including attorney's fees, resulting from any acts, omissions or
misrepresentations of Avistar or its employees or agents. Tandberg's liability
cannot be expanded or modified by any statements made by Avistar, its employees
and/or agents which are the sole and exclusive responsibility of Avistar.

               (d) NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, COMPENSATORY, OR CONSEQUENTIAL DAMAGES ARISING IN ANYWAY UNDER THIS
AGREEMENT, INCLUDING DAMAGES FOR LOSS OF ANTICIPATED PROFITS. EXCEPT AS PROVIDED
ABOVE, TANDBERG MAKES, AND AVISTAR RECEIVES, NO WARRANTIES OR CONDITIONS OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY FOR ANY IMPLIED WARRANTY OR CONDITION OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

        3.3 Buffer.

               (a) Off-site Buffer. Tandberg will maintain, in stock at its
facilities, a number of Tandberg TC 2000 buffer units ("Buffer Units") which, in
the event of at Avistar's urgent request for advance replacement of failed

Tandberg TC 2000 units *, and shall be adjusted, if necessary, based on
Avistar's installed base and the reported failure rates. Avistar shall not pay
for such Buffer Units provided Avistar shall, *, return the failed units to
Tandberg in exchange for the Buffer Units. Tandberg's obligation to provide
Avistar with such Advance Replacement units shall not exceed a maximum of *
units simultaneously, except where, Tandberg at its sole discretion wishes to do
so.

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

               (b) Quarterly Report. At Avistar's request, Tandberg agrees to
provide a summary of failure rate percentages of the Tandberg TC 2000 based on
Tandberg's installed population in a form to be determined by Tandberg in its
sole discretion provided that the information is presented so as to be easily
understood.

        3.4 Service and Support

               (a) Customer Service. Avistar shall provide maintenance and field
service to Avistar's customers. However, from the Effective Date, Tandberg
agrees to provide * number of hours per month of telephone technical
consultation to Avistar in connection with Tandberg TC 2000 units for both
customer problems and for technical issues which arise in regards to the
Tandberg TC 2000 interfacing with Avistar products, including Avistar's
development of the necessary software to integrate to the Tandberg TC 2000, not
to exceed * per month. Such telephone consultation will be provided by qualified
Tandberg personnel at no additional charge to Avistar. At Avistar's request, but
no more than * annually, a minimum of * Avistar engineers shall be provided
Tandberg TC 2000 training in order to become more familiar with all functions
and features of the Tandberg TC 2000 at Tandberg's facilities where it offers
such training. Avistar will be fully responsible for the travel and living
expenses of its personnel attending such training.

               (b) First Line Maintenance Support. For the Initial Term of this
Agreement, Avistar shall pay an annual Support Fee to Tandberg which shall be
equal * of the purchase price of each TC 2000 unit times the number of units
purchased in such term, provided that in no event shall such Support Fee be less
than *. The Support Fee will be paid incrementally, in conjunction with the
product fees, as further described in Section 2.5(a) provided that in no event
will Avistar be required to pay an additional Support Fees beyond * during such
period and that Avistar shall have paid at least the minimum amount, *, by the
end of *. In consideration for such Support Fee, Tandberg shall provide Avistar
all updates and enhancements (including applicable manuals and documents) which
are released for the Tandberg TC 2000 during any term of this Agreement, in a
form which allows Avistar to copy and transfer the updates and associated
documentation ("Releases") to its Customer. Avistar shall be responsible for the
testing, distribution and installation of such Releases to its customers
utilizing the software release key provided to it by Tandberg based on the
serial number of each TC2000 unit. Additionally, an extension of the warranty
provided in Section 3.2 above, including advance replacements for hardware
failures shall be provided as part of the Support Fee. In the event Avistar
requires on-site support or assistance from Tandberg on its behalf or on behalf
of Avistar customers, the parties will first mutually agree, in writing,
acceptable rates for on-site support. Avistar shall be permitted to elect a
`no-support' option whereby, on each anniversary date of this Agreement, Avistar
may choose not to pay the Support Fee and Tandberg shall have no further
obligation to provide Avistar the afore mentioned Releases.

               (c) Notwithstanding the foregoing, software upgrades as provided
in Section 3.4(b) above shall NOT include software packages considered as
products in their own right, i.e., Major new releases containing new
functionality.

               (d) The Support Fee for each subsequent renewal period shall be
discussed and agreed by the parties in conjunction with the product fees as
described in Section 2.5 above.

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                                             Confidential Treatment Requested by
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        3.5 Indemnification.

               (a) Tandberg agrees to defend, indemnify and hold harmless
Avistar (including Avistar's subsidiaries, affiliates and distributors) and
Avistar's customers from all damages and legal expenditures incurred as a result
of a claim that (i) the Tandberg TC 2000 or spare part or the use or transfer of
a the Tandberg TC 2000 or spare part sold or delivered hereunder ("Infringing
Item") constitutes an infringement of any patent, copyright, trade secret or
other proprietary right, worldwide, of any third party or (ii) damage to a third
party has been directly caused by a defect in a the Tandberg TC 2000 or spare
part. Avistar shall notify Tandberg promptly of any such claim, tender to
Tandberg the right to control and direct the investigation, preparation, defense
and settlement of such claim, and provide Tandberg with necessary information in
connection with the foregoing. If Tandberg receives notice of an alleged
infringement, or if the use of an Infringing Item shall be prevented based on an
alleged infringement, Tandberg shall (at Tandberg's option and expense) either
(i) obtain the right to continued use or transfer of such Infringing Item, (ii)
modify such Infringing Item so that it no longer infringes, or (iii) substitute
other non-infringing equipment. Any modified or substituted equipment shall
conform to the Specifications.

               (b) Avistar agrees to indemnify and hold Tandberg harmless from
all damages and legal expenditures incurred as a result of a claim that arises
out of any misrepresentations of the Tandberg TC 2000 or negligent or
intentional acts or omissions of Avistar and its employees provided that
Tandberg notifies Avistar promptly of any such claim, tenders to Avistar the
right to control and direct the investigation, preparation, defense and
settlement of such claim, and provides Avistar with necessary information in
connection with the foregoing.

IV      FCC APPROVAL; ENGINEERING CHANGES

        4.1 Regulatory and FCC Approval. Tandberg warrants that its products
have obtained at minimum, the Regulatory Approvals listed in the Specifications,
including those listed below, and have been so certified (including other such
regulatory requirements as may be necessary and as agreed by the parties from
time to time):

        FCC, CE, UL, CSA, JATE, VDE, TUV

Upon request by Avistar, Tandberg shall promptly provide Avistar the appropriate
certificate/approval paperwork. Avistar shall have primary responsibility for
obtaining any required approval of Avistar's products incorporating Tandberg TC
2000 units as a component ("Combined Products"). However, if Avistar encounters
difficulty in obtaining such approval, then Tandberg agrees to work in good
faith reasonably to assist Avistar to determine whether Tandberg TC 2000
redesign is required and/or to determine other mutually acceptable means of
resolving the problem; provided that where such failures occur in the Tandberg
TC 2000 standing alone, Tandberg shall assume the responsibility to obtain the
necessary approvals and certification as stated in this Section 4.1.

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        4.2 Prior Approval. Subject to the provisions of Section 2.2 ("Product
Availability") above, in the event Tandberg intends to make any changes to the
Specifications or design of the Tandberg TC 2000 in any manner that (i)
adversely affects quality levels or FCC or other regulatory compliance or (ii)
affects form, fit, function or interface, Tandberg will notify Avistar, in
advance, of such planned changes providing sufficient detail so that Avistar may
determine whether such change would in any way (i) adversely affects quality
levels or FCC or other regulatory compliance, (ii) affects form, fit, function
or interface, or (iii) Avistar's ability to communicate with the Tandberg TC
2000 unit or Control Interface. In the event Tandberg's planned changes are
likely to trigger any of the events listed in (i), (ii) or (iii) then Tandberg
agrees that it shall continue to supply Avistar the unchanged Tandberg TC 2000
units which comply to the Specifications pursuant to the terms of this Agreement
until such time as Avistar is able to accept the changed Tandberg TC 2000 units.
When requested by Avistar, Tandberg shall in good faith review planned changes
and work together with Avistar to determine what changes, and in what timeframe,
Avistar will need to make to the Avistar System to accommodate the requested
Tandberg changes so that Avistar is utilizing the most current Tandberg TC 2000
units.

        4.3 Avistar-Requested Changes. If Avistar requests a change in the
design or Specifications of the Tandberg TC 2000 (except for the additional
latency reduction requirements currently identified in Exhibit A), and where, at
its sole discretion, Tandberg is able and willing to make such Avistar requested
change, Tandberg will use its reasonable efforts to provide, within thirty (30)
days of each such request, the cost and schedule for implementing the change. If
Avistar approves Tandberg's cost and schedule, the parties shall amend this
Agreement accordingly.

V       DOCUMENTATION, LICENSES, ETC.

        5.1 Documentation.

               (a) During any term of this Agreement and until all units
purchased by Avistar hereunder are resold, or as applicable, returned to
Tandberg, Tandberg shall provide Avistar technical and user manuals and
documentation which are available for release applicable to the Tandberg TC 2000
sufficient in detail to enable Avistar to perform engineering support,
maintenance and inspection of the Tandberg TC 2000 units ("Documentation").
Tandberg shall notify Avistar and promptly provide Avistar with copies of any
revisions or additions to the above Documentation. All such Documentation shall
initially be delivered to Avistar no later than delivery of the first order
shipped to Avistar hereunder; updated Documentation shall be provided to Avistar
upon availability.

               (b) Tandberg hereby grants Avistar an irrevocable, worldwide,
royalty-free license, under all intellectual property rights of Tandberg and its
affiliates, to translate, modify and prepare derivative works based upon,
reproduce and distribute Documentation referred to in subsection (a) above for
Avistar's own use and that of its Customers, but for no other purpose unless
expressly authorized in writing by Tandberg.

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        5.2 Combination Products. During any term of this Agreement, and until
all units purchased by Avistar hereunder are resold or, as applicable, returned
to Tandberg, Tandberg hereby grants to Avistar a nonexclusive, irrevocable,
royalty-free, worldwide license, including the right to sublicense, under all
intellectual property rights of Tandberg and its affiliates (presently in effect
or which become effective during the term hereof) in the TC 2000 to manufacture
and have manufactured, use, demonstrate, sell, support and maintain an Avistar
product incorporating a Tandberg TC 2000 unit as a component provided that
Avistar expressly acknowledges and agrees that this Agreement does not grant
Avistar any rights to manufacture or have manufactured any unit similar to the
Tandberg TC 2000, in violation of (i) Tandberg's intellectual property rights;
(ii) the confidentiality obligations it assumes hereunder; or (iii) a provision
of this Agreement.

VI      CONFIDENTIALITY;

        6.1 Disclosure Agreement. All information which Avistar has provided
prior to the Effective Date, or subsequently provides, to Tandberg in connection
with this Agreement and the transactions and matters contemplated hereby shall
be governed by that certain Confidential Disclosure Agreement between the
parties and dated as of 11/13/96 (the "Disclosure Agreement"). Without
limitation, Tandberg agrees to treat information previously provided by Avistar
as confidential information, notwithstanding that such information may not have
been marked as required by Section 1 (Definition of Confidential Information) of
the Disclosure Agreement. Such information shall be used by Tandberg solely for
the purpose of performing its obligations to Avistar as provided herein.

        6.2 Disclosure Agreement. All information which Tandberg has provided
prior to the Effective Date, or subsequently provides, to Avistar in connection
with this Agreement and the transactions and matters contemplated hereby shall
be governed by that certain Confidential Disclosure Agreement attached hereto as
Exhibit C. Without limitation, Avistar agrees to treat information previously
provided by Tandberg as confidential information in conformance with the
provisions of the Confidential Agreement. Such information shall be used by
Avistar solely for the purpose of performing its obligations to Tandberg as
provided herein.

        6.3 Possibility of Alternative Arrangements. The parties agree to
discuss in good faith an expanded relationship between them providing for one or
more of the following: (a) coordination and sharing of the parties' technical
know-how relating to Tandberg TC 2000 technology and associated matters; (b)
Tandberg's purchase and resale of Avistar's product; (c) Tandberg's manufacture
of Combined Product under license from Avistar; (d) Tandberg's resale of the
Combined Product manufactured by Tandberg to Avistar at a mutually agreed price;
(e) Tandberg's resale of the Combined Product manufactured by Tandberg to third
parties (subject to royalty payments to Avistar calculated as a percentage of
Tandberg's revenue from such third party sales). Notwithstanding the foregoing,
no such agreement shall be in effect without the express, written mutual
agreement of the parties, if any.

        6.4 Mutual Patent Acknowledgment. The parties each claim ownership of
certain patents, technology and other such intellectual property rights related
to their products. In consideration for entering into this Agreement, each party
acknowledges the ownership claims of the other and agrees that neither party
will assert any patent or other intellectual property claims against the other
based on rights asserted or patents filed as of the Effective Date nor shall
either party voluntarily participate in, or assist in, such an assertion or
claim, direct or indirect, by a third party.

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VII     TERM AND TERMINATION

        7.1 Term. The Initial Term of this Agreement shall commence on the
Effective Date and, unless earlier terminated in accordance with the provisions
of the Agreement, shall continue until the End Date ("Initial Term"). If Avistar
gives Tandberg written notice of Avistar's desire to renew this Agreement, no
earlier than [*} and no later than [*], and Tandberg does not give Avistar
written notice objecting to such renewal within thirty (30) days of the date of
Avistar's notice, the End Date shall be automatically extended by an additional
one (1) year.

        7.2 Termination.

               (a) The rights of the parties to terminate this Agreement based
on the occurrence of one of the events set forth in herein below shall be in
addition to any other legal or equitable remedies to which the parties may be
entitled. A party wishing to terminate this agreement (a "Terminating Party")
based on such occurrence shall first provide written notice to the other party.
If such occurrence has not been fully remedied within thirty (30) days of such
written notice, the Terminating Party may give further written notice to the
other party of the immediate termination of this Agreement and the cancellation,
at the discretion of the Terminating Party, of any purchase orders placed
hereunder, in whole or in part.

               (b) Either party shall have the right to terminate this Agreement
for cause if the other party (i) becomes insolvent, is adjudicated bankrupt,
makes an assignment for the benefit of creditors, or if a Receiver or Trustee is
appointed for such party or a substantial portion of such party's assets; or
(ii) is otherwise in material breach of the provisions hereof.

               (c) Avistar shall have the right to terminate this Agreement for
cause if Tandberg becomes more than sixty (60) days overdue in delivering units
of the Tandberg TC 2000 ordered by Avistar (subject to the limitations set forth
in Section 2.1 (Ordering and Shipment) above).

        7.3 Effect of Termination. The following provisions shall survive any
termination of this Agreement: Section 3.2 (Product Warranty); Section 3.5
(Indemnification); subsection (b) of Section 5.1 (Documentation); Section 5.2
(Combination Products); Section VI (Confidentiality); and Section IX (General).

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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VIII    INTERCOMPANY EXCHANGE OF PRODUCTS

               (a) As part of this Agreement, when requested by Tandberg,
Avistar will grant Tandberg a non-exclusive, non-transferable, perpetual
software license for use by * ("Internal System"). License terms will be
pursuant to Avistar's standard terms and conditions applicable to the Avistar
System but without cost to Tandberg. Avistar will provide Tandberg the Internal
System at no charge. Avistar will offer to install the Internal System at
Tandberg's Northern Virginia facilities for which Tandberg will be charged only
Avistar's actual time and travel expenses. Tandberg may, however, wish to
install the system without Avistar's assistance. Avistar will waive its normal
annual maintenance service support fees for the Term of this Agreement.
Thereafter, on-going support may be purchased by Tandberg at its option under
Avistar's then terms and fees. If Avistar assists with the installation, at the
time of installation, Avistar will provide Tandberg user and administration
training.

               (b) In exchange for the license grant by Avistar in section (a)
above, and to facilitate the demonstration project and joint development
activities contemplated by this Agreement, Tandberg will provide Avistar *
Tandberg TC 2000 units ("Avistar Units") at no charge to Avistar on a permanent
basis which will thereafter be owned by Avistar in accordance with the delivery
schedule specified below, or some other schedule as is mutually agreeable to the
parties. Tandberg will provide Avistar on-going maintenance support for the
duration of this Agreement, for the Avistar Units provided herein. Tandberg will
not be required to provide Avistar any installation support for the Avistar
Units. Upon termination of this Agreement, Avistar may, at its option, elect
on-going support at Tandberg's then current fees and terms.

               *x Tandberg TC 2000 Units:

                *

        Delivery of the above Avistar Units shall be made in accordance with the
        above table. However, title to * units shall not pass to Avistar until
        such as as payment has been received for a total of * units. Title to
        the remaining * units shall not pass to Avistar until such time as
        Avistar purchases an additional * units.

               (c) Items to be provided by each party are identified in Exhibit
B, hereto attached "Equipment List for Demonstration/Development Units". Each
party shall be responsible for its own costs of installation and use of the
necessary WAN lines and other such equipment, shipping and duties for any
demonstration or development units provided to the other party hereunder.

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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IX      GENERAL

        9.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the United States of America and the Commonwealth of Virginia. This
Agreement is prepared and executed in the English language only and any
translation of this Agreement into any other language shall have no effect.

        9.2 Notices. All notices permitted or required under this Agreement
shall be in writing and shall be delivered by personal delivery, telegram,
telex, telecopier or facsimile transmission and shall be deemed given on
personal delivery, five (5) days after deposit in the mail, or on acknowledgment
of receipt of electronic transmission. Notices shall be sent as follows:

        Mr. Stephen Heinrichs               cc: Rima Van Hill
        Avistar Systems, L.P                Director of Contracts
        P.O.Box 7097                        1 Palmer Drive
        Incline Village, NV 89452           Glen Mills, PA 19342
        Fax: 702-832-4528                   610-558-2937

        President of Tandberg, Inc.         cc: Peri & Stewart
        360 Herndon Parkway, Suite 2200     108 Baker Street
        Herndon, VA 20171                   Maplewood, NJ 07040
        Fax: 703-709-4232                   973-762-5801

or such other address as the parties may provide to the other in writing from
time to time.

        9.3 No Agency. Nothing contained herein shall be construed as creating
any employment relationship, agency, partnership or joint venture or other form
of joint enterprise between the parties.

        9.4 Waiver. The failure of either party to require performance by the
other party of any provision hereof shall not affect the full right to require
such performance at any time thereafter. The waiver by either party of a breach
of any provision hereof shall not be deemed a waiver of the provision itself.

        9.5 Severability. In the event that any provision of this Agreement
shall be unenforceable or invalid under any applicable law or be so held by
applicable court decision, such unenforceability or invalidity shall not render
this Agreement unenforceable or invalid as a whole, and, in such event, such
provision shall be changed and interpreted so as to best accomplish the
objectives of such unenforceable or invalid provision within the limits of
applicable law or applicable court decisions.

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        9.6 Provisional Relief. It is understood and agreed that breach by the
parties of Sections 2.2 (Product Availability), 3.5 (Indemnification), V
(Documentation, Licenses, Etc.), or VI (Confidentiality) of this Agreement will
cause the other party irreparable damage for which recovery of money damages
would be inadequate. Therefore, in the event of a breach or threatened breach of
any of the provisions listed in the previous sentence, the non-breaching party
shall be entitled to seek timely injunctive or other provisional relief to
protect its rights under this Agreement in addition to any and all remedies
available at law. Such an action may be brought in any court of competent
jurisdiction, in federal court, within the United States.

        9.8 Attorneys' Fees. In the event any proceeding, arbitration or lawsuit
is brought by Avistar or Tandberg in connection with this Agreement, the
prevailing party in such proceeding shall be entitled to receive its costs,
expert witness fees and reasonable attorneys' fees, including costs and fees on
appeal.

        9.9 Assignment. Neither this Agreement nor any rights or obligations of
either party may be assigned or delegated in whole or in part without the prior
written approval of the other party, except as part of the acquisition of all or
substantially all of the business or assets of a party.

        9.10 Acts of God. Neither party shall be held responsible for any delay
of up to six (6) months in performance of this Agreement or any purchase order
placed under this Agreement which results from fires, strikes, acts of military
authorities, acts of God or acts of the public enemy. If any delay in
performance results from any such cause, the party subject to the delay shall
promptly notify the other party of the nature and expected duration of the delay
and the party injured by the delay may elect to (i) terminate or reschedule any
affected purchase order, in whole or in part and/or (ii) suspend its own
performance during the period of any delay. This provision shall not excuse any
delay of more than six (6) months in the performance of this Agreement or any
purchase order.

        9.11 Governmental Consents. Each party represents to the other and
warrants that no consent, approval or authorization of or designation,
declaration or filing with any governmental agency is required in connection
with or as a condition to the valid execution or performance of this Agreement.

        9.12 Confidentiality of Terms. The terms and conditions of this
Agreement are confidential. Neither party may disclose the contents of this
Agreement without the prior written consent of the other, except to its
accountants and legal counsel. However, Avistar shall have the right to identify
Tandberg as an Avistar Preferred Supplier.

        9.13 Entire Agreement. This Agreement (including its exhibits) states
the entire agreement between the parties with respect to the subject matter
hereof. Any provision of Avistar's purchase orders, Tandberg's purchase order
acknowledgments or invoices, or any other document that purports to modify or
supplement the provisions of this Agreement shall be without force or effect.
This Agreement supersedes, and its provisions govern, any prior, concurrent or
collateral agreements or other communications, oral or written, with respect to
the subject matter hereof. This Agreement may only be changed by a written
document signed by the authorized representatives of the parties and dated
subsequent to the date hereof.

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        9.14 Full Power. Each party warrants that it has full power to enter
into and perform this Agreement and that the person signing this Agreement on
behalf of such party has been duly authorized and empowered to enter into this
Agreement. Each party further acknowledges that it has read, understands and
agrees to be bound by the provisions of this Agreement.

        9.15 Facsimile Execution. The parties agree that this Agreement may be
executed via facsimile and that it shall be treated as an original, executed
copy when signed (via facsimile) by both parties; nevertheless, any one of the
parties may require the follow-up exchange of originals in hardcopy by so
requesting in writing within five (5) days of facsimile execution.

IN WITNESS WHEREOF, the parties have executed this Preferred Supplier Agreement
as of the Effective Date.

AVISTAR SYSTEMS, L.P.                      TANDBERG INC.

By: /s/ Rima Van Hill                      /s/ Illegible
   ----------------------------            -------------------------------------
Printed Name:                              Printed Name:
Title:                                     Title:

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EXHIBIT A: TANDBERG TC 2000 SPECIFICATIONS AND DELIVERABLES AS OF THE EFFECTIVE
DATE

FOR PURPOSES OF THIS AGREEMENT, THE SPECIFICATIONS FOR THE TANDBERG TC 2000
INCLUDING THE FOLLOWING DOCUMENTS:

-  Avistar's Video Network Gateway Requirements (VNG), attached

-  Tandberg TC 2000 Detailed Product Specifications applicable as of *

-  Tandberg TC 2000 Regulatory Certification Listing

-  Current Tandberg TC 2000/Dataport Interface Specifications

IN ADDITION TO ANY SPECIFICS OF EITHER PARTY IDENTIFIED IN THE AGREEMENT,
TANDBERG WILL DELIVER TO AVISTAR NO LATER THAN * FROM EFFECTIVE DATE THE
FOLLOWING:

-  Current list of known problems and current failure rates of Tandberg TC 2000

-  Schedule for Implementing latency requirements (less than 300 ms round-trip)
   for shipment date of *

-  Current complete Interface Specifications including latest "MasterVision"

-  Dataport User Guide and other related technical data (such MTBF) and sample
   code

-  Technical assistance to Avistar for purposes of integrating Avistar software
   to the Dataport/Tandberg TC 2000 units.

--------------
* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                         AVISTAR VIDEO NETWORK GATEWAY
                                  REQUIREMENTS

In summary from our RFP, the Video Network Gateway should provide the following
functions:

      -  Wide area video and audio connections (H.320)

      -  Telecom connectivity

      -  Multiplexing functionality

      -  Low latency, high performance

      -  T.120 Gateway functionality

      -  Network Management capabilities

      -  Scalable, modular architecture

      -  High reliability

      -  Rack mountable

      -  Low cost

Avistar proposes the Video Network Gateway could be developed in three phases.
The following features should be contained in the first phase:

      -  Wide area video and audio connections (H.320)

      -  Telecom connectivity

      -  Multiplexing functionality

      -  Low latency, high performance

      -  30 frames per second - H.261. Full CIF and QCIF, encode and decode

      -  Low latency for voice and video:

            (goal:  Audio Latency                     < 150 ms
                    Audio/video jitter:               < 130 ms
                    Skew (between audio and video):
                        audio advance over video:     < 20 ms
                        audio delay over video:       < 120 ms

               Note: while this may not be possible the first release, this
               remains the goal. The first release will meet it or will be
               substantially less than 250 ms latency)

      -  High reliability (these are deployed for use 24 hours/day, 7 days/week)

      -  One composite Video Input/Output NTSC/PAL per codec card

      -  One line level audio Input/Output G.711, G.722 and G.728 per codec card

      -  H.221 and BONDING Mode 1.

      -  Telecom connectivity to support the following interfaces: V.35, 3BRI

      -  Low cost - achievable either through single units in individual chassis
         or a chassis holding multiple cards (not either solution must be able
         to be installed in a standard telecom rack)

The following functions should be provided in the second phase of deployment:

      -  Control of multiple gateways through a single interface (single serial
         connection from the PC for instance)

      -  Improved Network Management capabilities remote diagnostics

      -  Control of Gateway through Ethernet interface (nice for remote control
         when necessary).

The final phase should include the following features:

      -  Video Compression that improves continuously all the way up to T1/E1
         speeds.

      -  Network speeds up to T1/E1

      -  Telecom connectivity to support the following interfaces: V.35, 3BRI,
         4BRI, fractional T1/E1

      -  T.120 Gateway functionality through TCP/IP and/or Q.933 over MLP

      -  Telecom connectivity to support the following interface: PRI, switched
         56/64, V.35/RS-366 if needed.

System reliability is of utmost importance to Avistar. To this end, we believe
that the codec manufacturer should be free to choose the best method to achieve
this goal and running under a PC operating system such as Windows NT may not
yet be the best way to achieve that goal. Therefore, the following features are
no longer mandatory at this time and may not be in the future if they still do
not make sense:

      -  Windows NT Operating System

      -  Capacity to provide more than one codec card talking to a network card.

      -  Codec and Network cards to support MVIP bus.

      -  Rack mountable chassis to support up to 10 channels (4 channels
         minimum)

      -  Multiple "channels" - minimum 4 in rack-mountable chassis

      -  Single channel solution using the same codec card in a desktop or tower
         style PC running the NT operating system. To be provided with V.36 and
         ISDN API's.
<PAGE>   21
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EXHIBIT B: EQUIPMENT LIST FOR DEMONSTRATION/DEVELOPMENT UNITS

* AVISTAR SYSTEMS, PER SECTION 8

* TANDBERG TC 2000 UNITS, PER SECTION 8

Attachments: Avistar Order and License Agreement with Schedule A and B.

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                                    EXHIBIT C

[AVISTAR LOGO]
505 Hamilton Avenue
Palo Alto,  CA  94301

                            NON-DISCLOSURE AGREEMENT

This Agreement is made and entered into this _________ (hereinafter "Effective
Date") by and between Avistar Systems, L.P., with offices at the above address
("Avistar") and __________,  (hereinafter "Company") with offices at __________,
and shall govern disclosure of information disclosed during the period of one
year from the Effective Date ("Disclosure Period").

Whereas, each of the above parties have developed and continue to develop one or
more of the following: software, programs, technologies, processes, business
opportunities and/or strategies which the owning party considers to be its
confidential and proprietary information ("Confidential Information") as further
described below; and

Whereas, the parties desire that certain Confidential Information be disclosed
to each other in connection with __________: ("Purpose");

NOWTHEREFORE, the parties agree to maintain and protect the confidentiality of
Confidential Information under the following terms and conditions:

DEFINITIONS

"Company" as used here shall mean the legal entity or representative of the
legal entity identified above as the Company . "Confidential Information" as
used herein shall mean any Information of the disclosing party that is not
released publicly which it discloses to the other party (i.e. the Recipient)
under this Agreement which the disclosing party considers to be proprietary and
confidential in nature, disclosed in written or other tangible form, clearly
marked "Confidential" and with the date of disclosure, provided that,
Confidential Information shall also includes information orally disclosed to
Recipient if it is indicated at the time of disclosure to be Confidential
Information. Confidential Information includes but is not limited to technical,
marketing, operating, performance, business pricing policies, programs, data
systems, inventions, discoveries, trade secrets, techniques, and all record
bearing media containing or disclosing such information and techniques that are
disclosed pursuant to this agreement. Company acknowledges that information
provided by Avistar may include a combination of information which is
Confidential Information and information which may be publicly known at the time
it is disclosed.

1. Use of Information.

A Recipient's duty to protect Confidential Information disclosed under this
Agreement expires three (3) years from the end of the Disclosure Period. Prior
to such expiration a Recipient shall protect the disclosed Confidential
Information by using the same degree of care, but no less than a reasonable
degree of care, to prevent the unauthorized use, dissemination or publication of
the Confidential Information as the Recipient uses to protect its own
Confidential Information of like nature. The Recipient shall not disclose
Confidential Information to any third party nor use it for any purpose

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other than as specifically authorized under this Agreement. Recipient agrees
that only those employees with a need to know such Confidential Information and
who agree to be bound by the provisions of this Agreement will be granted access
to any Confidential Information. Confidential Information may not be copied or
reproduced without first obtaining written permission from the disclosing party.
All Confidential Information disclosed to Recipient under this Agreement shall
remain the property of the disclosing party.

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2. Disclaimer.

Neither party shall have any obligation to disclose to the other party nor to
obtain from the other all Confidential Information under this Agreement. No
rights, licenses or obligations other than those expressly authorized under this
Agreement are to be implied from this Agreement.

3. Remedies.

The parties agree that a breach of this Agreement would result in considerable
damage to the other, and that the non-breaching party reserves the right to seek
redress for such breach at law or equity or both as may be necessary and
required under the circumstances.

4. Termination.

This Agreement shall terminate one (1) year from the Effective Date or upon
completion of the Evaluation, whichever occurs first; however, the provisions of
Section 1 and 3 shall survive any termination or expiration of this Agreement.

5. Entire Agreement.

This is the entire agreement between the parties relating to the subject matter
hereof and no waiver or modification of the Agreement shall be valid unless in
writing and signed by each party. This Agreement shall be construed and
interpreted in accordance with the laws of the state of California without
reference to conflict of law principles.

IN WITNESS HEREOF, the parties hereto have caused this Agreement to be executed
on the Effective Date:

Avistar Systems, L.P.                       COMPANY (                          )

Signature:                                  Signature:
          ---------------------------                 --------------------------
Name:                                       Name:
     --------------------------------            -------------------------------
Title:                                      Title:
      -------------------------------             ------------------------------
Date:                                       Date:
     --------------------------------            -------------------------------

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                               MODIFICATION #1 TO
         PREFERRED SUPPLIER AGREEMENT DATED JUNE 24, 1997 ("AGREEMENT").
          Effective Date of Modification 9-18-98 ("Modification Date").

The parties hereby agree that as of the Modification Date, Section 3.4 of the
Agreement is hereby replaced, in its entirety, to now read as follows:

        3.4 Service and Support

               (b) First Line Maintenance Support. Commencing on the
Modification Date, Avistar shall pay an annual Support Fee to Tandberg which
shall be equal * of the purchase price of each TC 2000 unit times the number of
units purchased in such term, to be paid incrementally, at time of purchase.
Consistent with the warranty term specified in Section 3.2(a) of the Agreement,
the annual support term for each TC 2000 unit shall extend from the earlier of
(i) *; or (ii) *. To cover the TC 2000 units purchased prior to the Modification
Date, Avistar shall pay Tandberg a *. A list of such previously purchased units
are attached hereto as Exhibit 1. The * shall be invoiced by Tandberg in
conjunction with execution of this Modification #1 and payment shall be due
promptly * from Avistar's receipt. In consideration for such Support Fee,
Tandberg shall provide Avistar all updates and enhancements (including
applicable manuals and documents) which are released for the Tandberg TC 2000
during any term of this Agreement, in a form which allows Avistar to copy and
transfer the updates and associated documentation ("Releases") to its Customer.
Avistar shall be responsible for the testing, distribution and installation of
such Releases to its customers utilizing the software release key provided to it
by Tandberg based on the serial number of each TC2000 unit. Additionally, an
extension of the warranty provided in Section 3.2 above, including advance
replacements for hardware failures shall be provided as part of the Support Fee.
In the event Avistar requires on-site support or assistance from Tandberg on its
behalf or on behalf of Avistar customers, the parties will first mutually agree,
in writing, acceptable rates for on-site support. Avistar shall be permitted to
elect a `no-support' option whereby, on each anniversary date of this Agreement,
Avistar may choose not to pay the Support Fee and Tandberg shall have no further
obligation to provide Avistar the afore mentioned Releases.

Except as expressly modified by this Modification #1, all terms and conditions
of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Modification #1 to be executed
by their authorized representatives:

AVISTAR SYSTEMS CORPORATION               TANDBERG INC.

By: /s/ Rima Van Hill                     /s/ Illegible
   ------------------------------         --------------------------------------
Printed Name/Title:                       Printed Name/Title:
Date:                                     Date:

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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       MODIFICATION #2 TO PREFERRED SUPPLIER AGREEMENT DATED JUNE 24, 1997
  ("AGREEMENT"). Effective Date of Modification 1-11-98 ("Modification Date").

The parties hereby agree that as of the Modification Date, certain terms and
conditions of the Agreement, as expressly modified below, shall apply and that
this Modification #2 shall take precedence over the terms contained in the
Agreement.

1.      Payment Schedule for Outstanding Amount: To facilitate prompt payment of
        the outstanding balance of * ("Outstanding Amount") owed by Avistar to
        Tandberg for Codecs previously delivered, the parties agree to the
        following payment schedule which must be strictly adhered to:

               Payment schedule will commence with the first payment of *, to be
               received by Tandberg no later than close of business *.
               Thereafter, each subsequent *, a payment of * must be received by
               Tandberg until the Outstanding Amount has been paid off, i.e.,
               ending payment will be no later than *.

2.      New Order: In conjunction with execution of this Modification #2, an
        Avistar purchase order will be placed for * additional Codec units ("New
        Order"). The unit price for each Codec on the New Order shall be * plus
        a per unit maintenance fee of *, for a total of purchase price per unit
        of *. The total purchase order amount will be * ("New Order Amount").

3.      Payment Terms for New Order: Payment terms shall be extended to Avistar
        for the New Order Amount and shall be strictly adhered to:

               Payment schedule will commence with the first payment of *, to be
               received by Tandberg no later than close of business *.
               Thereafter, each subsequent *, a payment of * must be received by
               Tandberg until the New Order Amount has been paid off, i.e.,
               ending payment will be no later than *.

4.      Deliver of New Order: Immediately upon receipt of the payments due to
        Tandberg on *, Tandberg shall deliver the * Codecs to Avistar, to arrive
        at Avistar no later than *.

5.      Payment Default and Penalties: Strict adherence to the above payment
        schedules is required.. Any late payments will put Avistar in default of
        its obligations and will immediately cause the following conditions to
        come into effect:

        Loss of Discount   Pricing will revert back to contract price of * for
                           the New Order and Avistar will be invoiced a
                           bill-back of *.

        Collections        All outstanding payments will become immediately due
                           and payable.

        Additional Orders  All future orders will be suspended until all payment
                           obligations have been fulfilled.

        To ensure arrival of weekly payments, Tandberg is providing Avistar the
        following federal express (or other overnight service) account number to
        which the shipment will be charged:
                                           -------------------------------------

6.      Free Codec Systems: Delivery of the `free' Codec systems due Avistar
        under the Agreement ("Free Systems"), as yet undelivered by Tandberg,
        are suspended until the Outstanding Amount and the New Order Amount
        (together "Amounts") have been paid in full. Tandberg agrees to
        immediately deliver the Free Systems to Avistar upon payment of the
        Amounts.

7.      Additional Orders: Other than the Codecs to be delivered pursuant to the
        New Order specified in Section 2 above, Tandberg shall have no
        obligation to accept and deliver against any additional purchase orders
        from Avistar until such time as Avistar agrees to either:

        (a)     pay off all Amounts prior to delivery of additional orders; or

        (b)     paying cash, in advance, for any such additional orders.

Except as expressly modified by this Modification #2, all terms and conditions
of the Agreement shall remain in full force and effect. The parties agree that
this Modification #2 may be executed via facsimile and that it shall be
considered equivalent to an executed original when signed (via facsimile) by
both parties; nevertheless, any one of the parties may require the follow-up
exchange of originals in hardcopy by so requesting in writing within five (5)
days of facsimile execution.

IN WITNESS WHEREOF, the parties have caused this Modification #2 to be executed
by their authorized representatives:

AVISTAR SYSTEMS CORPORATION                 TANDBERG INC.

By: /s/ Gerald Burnett                      /s/ Illegible
   -------------------------------------    ------------------------------------
Printed Name/Title: Dr. G. Burnett - CEO    Printed Name/Title:
                    --------------------                       -----------------

                                                               -----------------

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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                          CORRECTED VERSION OF 6-16-99
       MODIFICATION #3 TO PREFERRED SUPPLIER AGREEMENT DATED JUNE 24, 1997
           ("AGREEMENT"). Effective Date of Modification June 1, 1999
                             ("Modification Date").

The parties hereby agree that as of the Modification Date, certain terms and
conditions of the Agreement, as expressly modified below, shall apply and that
this Modification #3 shall take precedence over the terms contained in the
Agreement.

1.      New Order: In conjunction with execution of this Modification #3, an
        Avistar purchase order will be placed for * additional Tandberg 2500
        Codec units ("New Order"). The unit price for each Codec on the New
        Order shall be * plus a per unit maintenance fee of *, for a total
        purchase price per unit of * . The per unit maintenance fee shall
        replace the annual maintenance fee set forth in the Agreement, Section
        3.4(b). Notwithstanding the foregoing, the * Codec price shall be
        subject to a rebate as further described in Section 4 below.

2.      Payment Terms for New Order: Payment terms shall be extended to Avistar
        for the New Order Amount and shall be strictly adhered to:

           Payment terms for all deliveries under the New Order shall be * from
           shipment and Avistar's receipt of invoice except for the final
           shipment of * (as further described in Section 3 below) which shall
           be subject to payment terms of * .

3.      Delivery of New Order: Tandberg will ship the * Codecs under this New
        Order by *, or as soon thereafter as possible. Additional Codec units
        will be shipped in accordance with the following estimated delivery
        schedule, as updated from time to time by Avistar, provided that unless
        otherwise mutually agreed in writing, Tandberg will ship all Codec units
        under this New Order by no later than * :

        # OF UNITS OF THE * TO BE SHIPPED      EST. SHIP DATE    PAYMENT TERMS
        -----------------------------------    --------------    -------------
        *                                             *                *

4.      Rebate for Purchase: Subject to strict adherence to the above payment
        terms, immediately upon shipment to Avistar of the * Codec unit,
        Tandberg will issue a rebate equal to * per Codec unit against each of
        the * Codecs purchased for a total New Order rebate of * ("Rebate").
        Avistar may apply the Rebate as a credit towards payments owed Tandberg
        or may request a check for the Rebate amount. FAILURE BY AVISTAR TO
        ADHERE TO THE PAYMENT TERMS SET FORTH IN THIS MODIFICATION #3 WILL
        RESULT IN LOSS OF REBATE.

5.      Free Codec Systems: Unless otherwise requested by Avistar, Tandberg
        agrees to immediately deliver the `free' Codec systems due Avistar under
        the Agreement ("Free Systems"), as yet undelivered by Tandberg, within
        one-week of execution of this Modification #3. Free Systems shall be * .
        Upon delivery of the foregoing, no additional Free Systems are due under
        the Agreement.

6.      Maintenance and Warranty for New Order: All Codec units delivered
        pursuant to this Modification #3 shall be subject to a * warranty and
        maintenance support period from shipment ("Term"). Maintenance services
        shall be as described in the Agreement, including all software upgrades
        issued during the Term.

7.      Additional Orders: Subject to strict compliance with the provisions of
        this Modification #3, additional Avistar orders in excess of the *
        Codecs under this New Order shall be subject to a * per unit price plus
        * for maintenance or such other price as the parties may mutually agree
        at order placement time.

8.      Product Changes: In addition to the provisions contained in Section 2 of
        the Agreement, Tandberg agrees to provide Avistar reasonable advance
        notice of any significant hardware or software component changes
        (including changes to the chipset) and to provide Avistar with the
        following:

         -   detailed description of changes

         -   *  loaner new Codec product for at least 2-months to test

         -   the right to have the remainder of this New Order filled with
             existing product or replacement product depending on the test.

Except as expressly modified by this Modification #3, all terms and conditions
of the Agreement shall remain in full force and effect for an additional
Agreement renewal term. The parties agree that this Modification #3 may be
executed via facsimile and that it shall be considered equivalent to an executed
original when signed (via facsimile) by both parties; nevertheless, any one of
the parties may require the follow-up exchange of originals in hardcopy by so
requesting in writing within five (5) days of facsimile execution.

IN WITNESS WHEREOF, the parties have caused this Modification #3 to be executed
by their authorized representatives:

AVISTAR SYSTEMS CORPORATION                    TANDBERG INC.

By: /s/ Rima Van Hill                          /s/ Colin Sturtevant
   ------------------------------------        ---------------------------------
Printed Name/Title:                            Printed Name/Title:
    Rima Vanhill, Director of Contracts
    -----------------------------------        ---------------------------------

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

<PAGE>   28
                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

       MODIFICATION #4 TO PREFERRED SUPPLIER AGREEMENT DATED JUNE 24, 1997
        ("AGREEMENT"). Effective Date of Modification September 29, 1999
                             ("Modification Date").

The parties hereby agree that as of the Modification Date, certain terms and
conditions of the Agreement, as expressly modified below, shall apply and that
this Modification #4 shall take precedence over the terms contained in the
Agreement and any prior modifications:

1.      NEW ORDER: In conjunction with execution of this Modification #4, an
        Avistar purchase order will be placed for an additional * Tandberg 2500
        Codec units ("New Order - 9/99"). The unit price for each Codec on the
        New Order shall be * plus a per unit maintenance fee of *, for a total
        purchase price per unit of *. The per unit maintenance fee shall replace
        the annual maintenance fee set forth in the Agreement, Section 3.4(b).
        Notwithstanding the foregoing, the * per Codec price shall be subject to
        a rebate as further described in Section 4 below.

2.      PAYMENT TERMS FOR NEW ORDER: Payment terms shall be extended to Avistar
        for the New Order Amount and shall be strictly adhered to:

           Payment terms for all deliveries under the New Order shall be *
           from shipment and Avistar's receipt of invoice except that payment
           for the * Codecs to be delivered on * (as further described in
           Section 3 below) shall be *.

3.      DELIVERY OF NEW ORDER: Tandberg will ship the first * Codecs under this
        New Order by * , or as soon thereafter as possible. Additional Codec
        units will be shipped in accordance with the following estimated
        delivery schedule, as updated from time to time by Avistar, provided
        that unless otherwise mutually agreed in writing, Tandberg will ship all
        Codec units under this New Order by no later than *:

        # OF UNITS OF THE * TO BE SHIPPED     EST. SHIP DATE     PAYMENT TERMS
        ---------------------------------     --------------     -------------
        *                                            *                 *

4.      REBATE FOR PURCHASE: Subject to strict adherence to the above payment
        terms, *, immediately upon shipment to Avistar of the * Codec unit (per
        the above delivery schedule), Tandberg will issue a rebate equal to *
        per Codec unit against each of the * Codecs purchased for a total New
        Order rebate of * ("Rebate"). Avistar may apply the Rebate as a credit
        towards payments owed Tandberg or may request a check for the Rebate
        amount. FAILURE BY AVISTAR TO TAKE DELIVERY OF ALL UNITS ORDERED OR TO
        ADHERE TO THE PAYMENT TERMS SET FORTH IN THIS MODIFICATION #4 WILL
        RESULT IN LOSS OF REBATE.

5.      EXPEDITED DELIVERY SCHEDULE OF MODIFICATION #3 ORDER AND ADDITIONAL
        REBATE: In consideration for the prices and terms set forth hereunder,
        the parties agree to the following additional terms applicable to the
        remaining * Codec units to be delivered under Avistar's previous
        Modification #3 order ("Old Order"). Specifically, Tandberg will ship to
        Avistar the remaining * Codecs under the Old Order by * or as soon
        thereafter as possible. Payment terms for the * Codecs will be * from
        invoicing. All such units shall be subject to a * warranty period.
        Furthermore, Tandberg agrees to provide Avistar an additional rebate
        equal to * for each of the * Codecs under the Old Order - i.e. in
        addition to the * Rebate specified in Section 4 of the Old Order,
        Tandberg will provide Avistar an additional * rebate for the above
        referenced * Codecs.

6.      MAINTENANCE AND WARRANTY FOR NEW ORDER: All Codec units delivered
        pursuant to this Modification #4 shall be subject to a * warranty
        and maintenance support period from shipment ("Term"). Maintenance
        services shall be as described in the Agreement, including all software
        upgrades issued during the Term.

7.      ADDITIONAL ORDERS: Subject to strict compliance with the provisions of
        this Modification #4, additional Avistar orders in excess of the *
        Codecs under this New Order shall be subject to a * per unit price
        (including * for maintenance) or such other price as the parties may
        mutually agree at order placement time. The parties agree to negotiate
        in good faith in the event Avistar wishes to replace this New Order with
        one that has a substantially larger order quantity.

8.      PRODUCT CHANGES: In addition to the provisions contained in Section 2 of
        the Agreement, Tandberg agrees to provide Avistar reasonable advance
        notice of any significant hardware or software component changes
        (including changes to the chipset) and to provide Avistar with the
        following:

        -   detailed description of changes

        -   * loaner new Codec product for at least 2-months to test

        -   the right to have the remainder of this order filled with existing
            product or replacement product depending on the test.

Except as expressly modified by this Modification #4, all terms and conditions
of the Agreement shall remain in full force and effect for an additional
Agreement renewal term. The parties agree that this Modification #4 may be
executed via facsimile and that it shall be considered equivalent to an executed
original when signed (via facsimile) by both parties; nevertheless, any one of
the parties may require the follow-up exchange of originals in hardcopy by so
requesting in writing within five (5) days of facsimile execution.

IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS MODIFICATION #4 TO BE EXECUTED
BY THEIR AUTHORIZED REPRESENTATIVES:

AVISTAR SYSTEMS CORPORATION                   TANDBERG INC.

By: /s/ Rima Van Hill                         /s/  Illegible
   --------------------------------           ----------------------------------
Printed Name/Title:                           Printed Name/Title:
Rima Vanhill, Director of Contracts
-----------------------------------           ----------------------------------

* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

                                    PAGE 30<PAGE>   1
                                                                  EXHIBIT 10.8.1

                                             Confidential Treatment Requested by
                                              Avistar Communications Corporation

                MODIFICATION #5 TO PREFERRED SUPPLIER AGREEMENT
                       DATED JUNE 24, 1997 ("AGREEMENT").
       Effective Date of Modification June 27, 2000 ("Modification Date").

The parties hereby agree that as of the Modification Date, certain terms and
conditions of the Agreement, as expressly modified below, shall apply and that
this Modification #5 shall take precedence over the terms contained in the
Agreement and any prior modifications:

1.   NEW ORDER: In conjunction with execution of this Modification #5, an
     Avistar purchase order will be placed for an additional * (or, as
     applicable pursuant to Section 8, * Codec units) ("New Order"). The unit
     price for each Codec on the New Order shall be * plus a per unit
     maintenance fee of *, for a total of purchase price per unit of *. The per
     unit maintenance fee shall replace the annual maintenance fee set forth in
     the Agreement, Section 3.4(b).

2.   PAYMENT TERMS FOR NEW ORDER: Payment terms extended to Avistar for the New
     Order shall be strictly adhered to. Payment terms for all deliveries under
     the New Order shall be * from shipment and Avistar's receipt of invoice.

3.   DELIVERY OF NEW ORDER: Codec units will be shipped in accordance with the
     following estimated delivery schedule, as updated from time to time by
     Avistar. Unless otherwise mutually agreed in writing, Tandberg will ship
     all Codec units under this New Order by no later than *:

<TABLE>
<CAPTION>
# OF UNITS OF THE * TO BE SHIPPED         EXT. SHIP DATE
---------------------------------         --------------
<S>                                      <C>
*                                         *

</TABLE>

4.   MAINTENANCE AND WARRANTY FOR NEW ORDER: All Codec units delivered pursuant
     to this Modification #5 shall be subject to a * warranty and maintenance
     support period from shipment ("Term"). Maintenance services shall be as
     described in the Agreement, including all software upgrades (not deemed to
     be products in their own right) issued during the Term.

5.   ADDITIONAL ORDERS FOR MODEL * CODECS: Avistar acknowledges that Tandberg
     wishes to cease normal production cycles for the Tandberg * Codec and has
     provided Avistar a proposal for an enhanced replacement version as further
     described in Section 6 below. The parties agree that in the event Avistar
     wishes to continue purchasing additional * Codec units, Tandberg will
     manufacture them for Avistar until the end of the *, at the prices
     indicated in Section 1 above, provided that Avistar provides Tandberg with
     (i) a * lead-time from order placement to delivery; and (ii) a minimum
     order of * units.

6.   ENHANCED REPLACEMENT *: Tandberg has suggested it's * as alternative
     replacement Codecs to Avistar in place of the * codecs. The * will be
     available for delivery by no later than *. The functionality of the * shall
     have no less than the functionality and features of the * Codec at a price
     not to exceed * (including maintenance). A * will also be available to
     Avistar at a price not to exceed * (including maintenance). The parties
     will negotiate in good faith the prices for the Enhanced Codecs beginning
     in * based on order quantity, etc.

7.   TESTING UNITS: To facilitate the testing and development effort required to
     ensure Avistar's ability to use the * units proposed by Tandberg, Tandberg
     will, at Avistar's request, provide Avistar up to * loaner units of each
     model of Codec for development and testing purposes. These test units will
     either become part of the first order for * units, or will be returned to
     Tandberg by *. In the case of * units, the parties may mutually agree to
     (i) an extension to the loaner term for these units if Avistar is required
     to provide support for the * (ii) Avistar's return of * of it's existing
     * units in exchange for the * units.

8.   INTERIM SUBSTITUTION OF * CODEC: Tandberg may, at its discretion, ship *
     Codecs to fulfill this Order provided that (i) the * software is installed
     to ensure compatibility with the Avistar System and that the Codec is
     'packaged in such a way so as not to expressly indicate it is not a * unit.
     In the event *, Avistar will ensure that the * capabilities are not
     utilized without first paying Tandberg a * upgrade fee.

9.   ADDITIONAL PRODUCTS, PACKAGING AND SHIP-TO LOCATIONS: At Avistar's request,
     Tandberg agrees to package the Codec in a bundle to include certain
     additional hardware and cables consistent with the Bill-of-Material options
     attached hereto as Exhibit 1 ("Avistar BOM"). Certain Avistar BOM options
     include * units at * per unit. The prices for the additional components of
     the Avistar BOM are detailed on Exhibit 1. When ordered separately from
     Codec units, the * units must be ordered in minimum increments of * units.
     At no additional charge to Avistar, bundled shipments in minimum increments
     of * units, will be sent to one of the following two Avistar Locations, as
     specified by Avistar:

          US:   992 SAN ANTONIO ROAD, PALO ALTO -- CA
          ---------------------------------------------------------------
          UK:   TO BE PROVIDED
          ---------------------------------------------------------------

Except as expressly modified by this Modification #5, all terms and conditions
of the Agreement shall remain in full force and effect until December 31, 2001.
The parties agree that this Modification #5 may be executed via facsimile and
that it shall be considered equivalent to an executed original when signed (via
facsimile) by both parties; nevertheless, any one of the parties may require the
follow-up exchange of originals in hardcopy by so requesting in writing within
five (5) days of facsimile execution.

IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS MODIFICATION #5 TO BE EXECUTED
BY THEIR AUTHORIZED REPRESENTATIVES:

AVISTAR SYSTEMS CORPORATION                                        TANDBERG INC.

By:
   --------------------------------------    -----------------------------------
Printed Name/Title: Rima Vanhill,            Printed Name/Title:
                    Director of Contracts

--------------
* Confidential portions omitted pursuant to a confidential treatment request
and filed separately with the Securities and Exchange Commission.

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