Exhibit
10.2


 


ARTISOFT,
INC.


 


Consent,
Waiver and Amendment Agreement


 


This Consent,
Waiver and Amendment Agreement (this “Agreement”) is
made and entered into as of the 25th day of September, 2004 among
(i) Artisoft, Inc., a Delaware corporation (the “Company”),
(ii) each of the undersigned holders (collectively, the “Series B
Stockholders”) of the Company’s outstanding shares of Series B
Convertible Preferred Stock, $1.00 par value per share (the “Series B Preferred”) (representing a sufficient number and
interest of such holders and shares to take the actions provided for herein),
and warrants (the “2001 Warrants”)
to purchase Common Stock (as defined below) issued pursuant to the 2001
Purchase Agreement (as defined below) (representing a sufficient number and
interest of such holders and warrants to take the actions provided for herein),
(iii) each of the undersigned holders (collectively, the “Common
Stockholders”) of the Company’s Common Stock, $.01 par value per
share (the “Common Stock”), constituting all
of the investors (or such investors’ assignees) party to the 2002 Purchase
Agreement (as defined below), and warrants (the “Warrants”) to purchase Common Stock issued pursuant to the
2003 Agreement (as defined below), and (iv) each of the undersigned holders
(collectively, the “Series C Stockholders”;  and, together with the Common Stockholders and Series B
Stockholders, the “Stockholders”)
of the Company’s outstanding shares of Series C Convertible Preferred Stock,
$1.00 par value per share (the “Series C Preferred”)
(representing a sufficient number and interest of such holders and shares to
take the actions provided for herein), and warrants (the “2003 Warrants”) to purchase Common Stock
issued pursuant to the 2003 Purchase Agreement (as defined below) (representing
a sufficient number and interest of such holders and warrants to take the
actions provided for herein).


 


WHEREAS, the
Company desires to enter into a purchase agreement substantially in the form
attached hereto as Exhibit A (the “2004 Purchase
Agreement”) with certain investors (the “2004
Investors”) relating to the issuance and sale of Common Stock; and


 


WHEREAS, the
Company and the Series B Stockholders are parties to a Purchase Agreement
dated as of August 8, 2001, as amended (the “2001 Purchase
Agreement”), and a related registration rights agreement entered
into pursuant to the 2001 Purchase Agreement (the “2001
Registration Agreement”); and


 


WHEREAS, the
Company and the Common Stockholders are parties to a Purchase Agreement dated
as of August 8, 2002, as amended (the “2002 Purchase Agreement”),
and a related registration rights agreement entered into pursuant to the 2002
Purchase Agreement (the “2002 Registration
Agreement”); and


 


WHEREAS, the
Company and the Common Stockholders are parties to an Agreement dated as of
December 16, 2003 (the “2003 Agreement”);
and


 


WHEREAS, the
Company and the Series C Stockholders are parties to a Purchase Agreement dated
as of June 27, 2003, as amended (the “2003 Purchase Agreement”),
and a related registration rights agreement entered into pursuant to the 2003
Purchase Agreement (the “2003 Registration
Agreement”); and


 
















 


WHEREAS, the
undersigned Stockholders desire that the Company and the 2004 Investors enter
into the 2004 Purchase Agreement; and


 


WHEREAS, the
parties hereto desire to make certain consents, waivers and amendments in
connection with the offer, issuance and sale by the Company to the 2004
Investors of shares of Common Stock at a per share price of $1.1386 (the “Common Stock Sale”) and the other transactions contemplated
by the 2004 Purchase Agreement.


 


NOW, THEREFORE, in
consideration of the foregoing and the promises and covenants set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto consent and agree as follows:


 


1.                                       Each
of the undersigned Stockholders hereby consents to the 2004 Purchase Agreement
and the transactions contemplated thereby, including without limitation, the
Common Stock Sale.


 


2.                                       Each
of the undersigned Series B Stockholders hereby permanently and irrevocably
converts in full, pursuant to Section 4 of the Certificate of Designations,
Preferences and Rights of Series B Convertible Preferred Stock of
Artisoft, Inc., as filed with the Secretary of State of the State of Delaware
on August 8, 2001 (the “Series B
Certificate”), all outstanding shares of Series B Preferred held by
such Series B Stockholder into shares of Common Stock at a Conversion Price (as
defined in the Series B Certificate) of $2.045455 (the “Series B
Conversion”).  In connection
with the Series B Conversion, each of the undersigned Series B Stockholders (a)
is delivering and surrendering to the Company herewith for conversion the
certificate or certificates representing all of the shares of Series B
Preferred held by such Series B Stockholder (which such certificates are
described on the signature pages hereto) and (b) instructs the Company to
register and issue the number of whole shares of Common Stock issuable to such
Series B Stockholder as a result of the Series B Conversion to and in the name
of such Series B Stockholder at the address for such Series B Stockholder set
forth on the stock record books of the Company. 
In addition, in connection with the Series B Conversion and any other
conversion of shares of Series B Preferred into Common Stock by any holder
thereof, the Company and the undersigned Series B Stockholders hereby
permanently and irrevocably waive in full with respect to all shares of Series
B Preferred and the holders thereof, pursuant to Section 9 of the Series B
Certificate, any provision of the Series B Certificate requiring the use of a
specific form of notice of conversion to effect the Series B Conversion or any
other conversion of shares of Series B Preferred into Common Stock by any
holder thereof.  Each of the undersigned
Series B Stockholders acknowledges and agrees that (i) all of the rights,
preferences and privileges of the Series B Preferred set forth in the Series B
Certificate including, without limitation, the provisions of Section 4D
thereof relating to certain adjustments to the conversion price of the Series B
Preferred are inapplicable to the transactions contemplated by the 2004
Purchase Agreement, including without limitation, the Common Stock Sale, and
(ii) all such rights, preferences and privileges, including, without
limitation, the right of the holders of the Series B


 


2
















 


Preferred to elect Series
B Directors (as defined in the Series B Certificate), shall terminate as a
result of the Series B Conversion.  Each
of the undersigned Series B Stockholders hereby waives any application of any
provisions of the Series B Certificate inconsistent with the preceding sentence
to any shares of Series B Preferred and the holders thereof.  Each of the undersigned Series B Stockholders
(A) agrees that the term of office of any and all Series B Directors previously
elected by the holders of the Series B Preferred shall hereby terminate effective
immediately and (B) permanently and irrevocably waives in full with respect to
all shares of Series B Preferred and the holders thereof, pursuant to Section 9
of the Series B Certificate, any and all provisions of the Series B
Certificate, including, without limitation, the provisions of Section 5
thereof, requiring or permitting the continuation or extension of such term of
office following the Series B Conversion.


 


3.                                       The
Company and each of the Series B Stockholders hereby permanently and
irrevocably waive in full with respect to all persons, entities and securities
with rights thereunder, pursuant to Section 9.6 of the 2001 Purchase
Agreement, the application and observance of Section 7.1 of the 2001
Purchase Agreement with respect to the transactions contemplated by the 2004
Purchase Agreement, including, without limitation, the Common Stock Sale.  In addition, the Company and each of the
Series B Stockholders hereby amend, pursuant to Section 9.6 of the
2001 Purchase Agreement, the 2001 Purchase Agreement as follows:


 


Sections 7.1 through 7.13, inclusive, of the 2001
Purchase Agreement, consisting of all of the Sections within Article 7,
“Covenants and Agreements of the Company”, of the 2001 Purchase Agreement, are
hereby deleted in their entirety and shall as of the date hereof and
hereinafter be of no effect whatsoever.


 


4.                                       The
undersigned Series B Stockholders hereby permanently and irrevocably waive in
full with respect to all persons, entities and securities with rights
thereunder, pursuant to Section 7(a) of the 2001 Registration Agreement, the
application of Section 2(c)(i)(B) of the 2001 Registration Agreement, and the
accrual and payment by the Company of liquidated damages pursuant thereto,
during any time or period when the Company is not eligible to use the
Securities and Exchange Commission’s Registration Statement on Form S-3 (“Form S-3”) to meet the Company’s registration obligations
under such agreement until March 31, 2005.


 


5.                                       The
Company and each of the undersigned Series B Stockholders hereby amend,
pursuant to Section 21 of all of the 2001 Warrants, all of the 2001 Warrants as
follows:


 


Section 8(e) of all of
the 2001 Warrants is hereby amended to delete in its entirety the first
sentence of such Section 8(e), which such sentence shall hereinafter be of no
effect whatsoever.  Sections 8(g)-(h) of
all of


 


3
















 


the 2001 Warrants are
hereby deleted in their entirety and shall hereinafter be of no effect
whatsoever.


 


6.                                       The
Company and all of the Common Stockholders hereby permanently and irrevocably
waive in full, pursuant to Section 9.6 of the 2002 Purchase Agreement, the
application and observance of Section 7.1 of the 2002 Purchase Agreement with
respect to the transactions contemplated by the 2004 Purchase Agreement,
including, without limitation, the Common Stock Sale.


 


7.                                       The
Company and all of the Common Stockholders, hereby (a) permanently and
irrevocably waive in full, pursuant to Section 9.6 of the 2002 Purchase
Agreement, the application and observance of Section 7.10 of the 2002
Purchase Agreement with respect to the transactions contemplated by the 2004
Purchase Agreement, including, without limitation, the Common Stock Sale, and
(b) acknowledge that neither the 2004 Purchase Agreement nor the transactions
contemplated thereby, including, without limitation, the Common Stock Sale,
will cause, result in or otherwise trigger (i) an adjustment to the Purchase
Price (as defined in the 2002 Purchase Agreement) of the Shares (as defined in
the 2002 Purchase Agreement) or (ii) the obligation of the Company to issue,
sell or deliver any shares of Common Stock, or to pay any penalty, pursuant to
Section 7.10 of the 2002 Purchase Agreement. The Company and all of the Common
Stockholders hereby amend, pursuant to Section 9.6 of the 2002 Purchase
Agreement, the 2002 Purchase Agreement as follows:


 


Sections 7.1 through 7.11, inclusive, of the 2002
Purchase Agreement, constituting all of the Sections within Article 7,
“Covenants and Agreements of the Company”, of the 2002 Purchase Agreement, are
hereby deleted in their entirety and shall as of the date hereof and
hereinafter be of no effect whatsoever.


 


8.                                       The
undersigned Common Stockholders hereby permanently and irrevocably waive in
full, pursuant to Section 7(a) of the 2002 Registration Agreement, the
application of Section 2(c)(i)(B) of the 2002 Registration Agreement during any
time or period when the Company is not eligible to use Form S-3 to meet the
Company’s registration obligations under such agreements until March 31, 2005.


 


9.                                       The
Company and each of the undersigned Common Stockholders hereby amend, pursuant
to Section 20 of each of the Warrants, each of the Warrants as follows:


 


Section 8(d) of each of the Warrants is hereby amended
to delete in its entirety the first sentence of such Section 8(d), which such
sentence shall hereinafter be of no effect whatsoever.


 


10.                                 Each
of the undersigned Series C Stockholders hereby converts, pursuant to Section 4
of the Certificate of Designations, Preferences and Rights of Series C
Convertible Preferred Stock of Artisoft, Inc., as filed with the Secretary of
State of the State of Delaware on September 9, 2003 (the “Series C
Certificate”), all


 


4
















 


outstanding shares of
Series C Preferred held by such Series C Stockholder into shares of Common
Stock at a Conversion Price (as defined in the Series C Certificate) of $1.50
(the “Series C Conversion”).  In connection with the Series C Conversion,
each of the undersigned Series C Stockholders (a) is delivering and
surrendering to the Company herewith for conversion the certificate or
certificates representing all of the shares of Series C Preferred held by such
Series C Stockholder (which such certificates are described on the signature
pages hereto) and (b) instructs the Company to register and issue the number of
whole shares of Common Stock issuable to such Series C Stockholder as a result
of the Series C Conversion to and in the name of such Series C Stockholder at
the address for such Series C Stockholder set forth on the stock record books
of the Company.  In addition, in
connection with the Series C Conversion, the Company and the undersigned Series
C Stockholders hereby permanently and irrevocably waive in full with respect to
all shares of Series C Preferred and the holders thereof, pursuant to Section 9
of the Series C Certificate, (i) any provision of the Series C Certificate
requiring the use of a specific form of notice of conversion to effect the Series
C Conversion or any other conversion of shares of Series C Preferred into
Common Stock by any holder thereof, (ii) any provision of the Series C
Certificate requiring or otherwise obligating the Company to issue or deliver
any shares of Common Stock, or certificates therefor, issuable in connection
with or pursuant to the Series C Conversion or any other conversion of shares
of Series C Preferred into Common Stock by any holder thereof within any
specified time period other than promptly after the receipt by the Company of
written notice of such conversion and the surrender of the certificate or the
certificates representing the shares of Series C Preferred to be so converted,
and (iii) all of the provisions of Sections 4B(2) and 4B(4) of the Series
C Certificate. Each of the undersigned Series C Stockholders acknowledges and
agrees that (A) all of the rights, preferences and privileges of the Series C
Preferred set forth in the Series C Certificate including, without limitation,
the provisions of Section 4D thereof relating to certain adjustments to
the conversion price of the Series C Preferred are inapplicable to the
transactions contemplated by the 2004 Purchase Agreement, including without
limitation, the Common Stock Sale, and (B) all such rights, preferences and
privileges, including, without limitation, the right of the holders of the
Series C Preferred to elect Series C Directors (as defined in the Series C
Certificate), shall terminate as a result of the Series C Conversion.  Each of the undersigned Series C Stockholders
hereby waives any application of any provisions of the Series C Certificate
inconsistent with the preceding sentence to any shares of Series C Preferred
and the holders thereof.  Each of the undersigned
Series C Stockholders (I) agrees that the term of office of any and all Series
C Directors previously elected by the holders of the Series C Preferred shall
hereby terminate effective immediately and (II) permanently and irrevocably
waives in full with respect to all shares of Series C Preferred and the holders
thereof, pursuant to Section 9 of the Series C Certificate, any and all
provisions of the Series C Certificate, including, without limitation, the
provisions of Section 5 thereof, requiring or permitting the continuation or extension
of such term of office following the Series C Conversion.


 


5
















 


11.                                 The
Company and each of the Series C Stockholders hereby permanently and
irrevocably waive in full with respect to all persons, entities and securities
with rights thereunder, pursuant to Section 9.6 of the 2003 Purchase
Agreement, the application and observance of Section 7.1 of the 2003
Purchase Agreement with respect to the transactions contemplated by the 2004
Purchase Agreement, including, without limitation, the Common Stock Sale.  In addition, the Company and each of the
Series C Stockholders hereby amend, pursuant to Section 9.6 of the
2003 Purchase Agreement, the 2003 Purchase Agreement as follows:


 


Sections 7.1 through 7.11, inclusive, of the 2003
Purchase Agreement, consisting of all of the Sections within Article 7,
“Covenants and Agreements of the Company”, of the 2003 Purchase Agreement, are
hereby deleted in their entirety and shall as of the date hereof and
hereinafter be of no effect whatsoever.


 


12.                                 The
undersigned Series C Stockholders hereby permanently and irrevocably waive in
full with respect to all persons, entities and securities with rights
thereunder, pursuant to Section 7(a) of the 2003 Registration Agreement, the
application of Section 2(c)(i)(B) of the 2003 Registration Agreement, and the
accrual and payment by the Company of liquidated damages pursuant thereto,
during any time or period when the Company is not eligible to use Form S-3 to
meet the Company’s registration obligations under such agreement until March
31, 2005.


 


13.                                 The
Company and each of the undersigned Series C Stockholders hereby amend,
pursuant to Section 20 of all of the 2003 Warrants, all of the 2003 Warrants as
follows:


 


Section 8(e) of all of the 2003 Warrants is hereby
amended to delete in its entirety the first sentence of such Section 8(e),
which such sentence shall hereinafter be of no effect whatsoever.  Sections 8(g)-(h) of all of the 2003 Warrants,
are hereby deleted in their entirety and shall hereinafter be of no effect
whatsoever.


 


14.                                 Except
as provided for in the immediately succeeding sentence, this Agreement,
including, without limitation, all actions, consents, waivers, amendments and
conversions contemplated hereby, shall be effective in all respects as of
September 27, 2004.  Paragraphs 5 and 13
of this Agreement shall be effective in all respects as of the date immediately
after the date of the consummation of the Common Stock Sale (so that the
provisions of Section 8 of the respective warrants referenced therein are
applicable to the Common Stock Sale).


 


15.                                 This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.  This Agreement may be
executed via facsimile, which shall be deemed an original.  If any provision of this Agreement shall
be declared void or unenforceable by any judicial or administrative authority,
the validity or


 


6
















 


enforceability of any
other provision and of the entire Agreement shall not be affected. 
Upon execution of this Agreement by the requisite number and interest of
such holders and shares to take the actions provided for herein, the validity
of any waiver, consent or amendment made hereunder shall be unaffected
by the failure of any one or more stockholders of the Company to
execute this Agreement.


 


16.                                 This
Agreement shall be governed by and construed and enforced in accordance with
the internal laws of the State of Delaware except as to its conflicts of law
principles.


 


17.                                 The proposed Common
Stock Sale has not been publicly announced, and any
public announcement may not include all terms of the proposed Common Stock
Sale.  Each of the stockholders hereby
agrees to hold in confidence the 2004 Purchase Agreement, this Agreement, the
Common Stock Sale, all of the terms thereof and all of the transactions
contemplated thereby until such time as the material terms thereof are publicly
disclosed by the Company (which the Company agrees to do in compliance with
applicable law).


 


* * * * *


 


7
















 


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


 


	
   

  	
  ARTISOFT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Duncan G. Perry

  	
   

  
	
   

  	
  Name:  Duncan
  G. Perry

  
	
   

  	
  Title:  Chief
  Financial Officer

  



 
















 


	
   

  	
  SPECIAL SITUATIONS FUND III, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Greenhouse

  	
   

  
	
   

  	
  Name:  David
  M. Greenhouse

  
	
   

  	
  Title: 
  Managing Director

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  1,140,000
(Cert. Nos. 5 & 9)


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
530,785


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  0


Warrant to purchase shares of Common Stock:  847,600 (2001 Purchase Agreement)


Warrant to purchase shares of Common Stock:  292,400 (2001 Purchase Agreement)


Warrant to purchase shares of Common Stock:  44,842 (2003 Agreement)


 


	
   

  	
  SPECIAL SITUATIONS CAYMAN FUND, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Greenhouse

  	
   

  
	
   

  	
  Name:  David
  M. Greenhouse

  
	
   

  	
  Title: 
  Managing Director

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  380,000
(Cert. Nos. 6 & 10)


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
176,946


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  0


Warrant to purchase shares of Common Stock:  98,000 (2001 Purchase Agreement)


Warrant to purchase shares of Common Stock:  282,000 (2001 Purchase Agreement)


Warrant to purchase shares of Common Stock:  14,952 (2003 Agreement)


 
















 


	
   

  	
  SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Greenhouse

  	
   

  
	
   

  	
  Name:  David
  M. Greenhouse

  
	
   

  	
  Title: 
  Managing Director

  



 


Number of Shares
of Series B Preferred surrendered herewith for conversion into Common
Stock:  380,000 (Cert. Nos. 7 & 11)


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
176,946


Number of Shares
of Series C Preferred surrendered herewith for conversion into Common
Stock:  0


Warrant to
purchase shares of Common Stock:  98,000
(2001 Purchase Agreement)


Warrant to
purchase shares of Common Stock:  282,000
(2001 Purchase Agreement)


Warrant to
purchase shares of Common Stock:  14,952
(2003 Agreement)


 


	
   

  	
  SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Greenhouse

  	
   

  
	
   

  	
  Name:  David
  M. Greenhouse

  
	
   

  	
  Title: 
  Managing Director

  



 


Number of Shares
of Series B Preferred surrendered herewith for conversion into Common
Stock:  32,730 (Cert. No. 19)


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
15,238


Number of Shares
of Series C Preferred surrendered herewith for conversion into Common
Stock:  0


Warrant to purchase
shares of Common Stock:  5,455 (2001
Purchase Agreement)


Warrant to
purchase shares of Common Stock:  1,288
(2003 Agreement)


 
















 


	
   

  	
  SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Greenhouse

  	
   

  
	
   

  	
  Name:  David
  M. Greenhouse

  
	
   

  	
  Title:  Managing
  Director

  



 


Number of Shares
of Series B Preferred surrendered herewith for conversion into Common
Stock:  167,270 (Cert. No. 18)


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares
of Series C Preferred surrendered herewith for conversion into Common
Stock:  77,879


Warrant to
purchase shares of Common Stock:  27,879
(2001 Purchase Agreement)


Warrant to
purchase shares of Common Stock:  6,576
(2003 Agreement)


 


	
   

  	
  ALICE ANN CORPORATION

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares
of Series B Preferred surrendered herewith for conversion into Common
Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares
of Series C Preferred surrendered herewith for conversion into Common
Stock:  20,000 (Cert. No. C-7)


Warrant to
purchase shares of Common Stock:  20,000
(2003 Purchase Agreement)


 
















 


	
   

  	
  ROBERT G. ALLISON

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0 


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  30,000
(Cert. No. C-8)


Warrant to purchase shares of Common Stock:  30,000 (2003 Purchase Agreement)


 


	
   

  	
  GARY A. BERGREN

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-10)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


	
   

  	
  CRAIG L. CAMPBELL

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-12)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  ANNE S. CHUDNOFSKY

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  16,000
(Cert. No. C-13)


Warrant to purchase shares of Common Stock:  16,000 (2003 Purchase Agreement)


 


	
   

  	
  CONSTABLE CAPITAL, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Constable Advisors, LLC

  
	
   

  	
   

  	
  Its managing member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Donald M. Constable

  	
   

  
	
   

  	
  Name:  Donald
  M. Constable

  
	
   

  	
  Title: 
  Managing Member

  
					



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  159,000
(Cert. No. C-35)


Warrant to purchase shares of Common Stock:  159,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  CONSTABLE CAPITAL QP, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Constable Advisors, LLC

  
	
   

  	
   

  	
  Its managing member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Donald M. Constable/Rick Hartfield

  	
   

  
	
   

  	
  Name:  Donald
  M. Constable/Rick Hartfield

  
	
   

  	
  Title: 
  Managing Member/Analyst

  
					



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of Common Stock
   subject to the 2002 Purchase Agreement:  0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  141,000
(Cert. Nos. C-33 & C-34)


Warrant to purchase shares of Common Stock:  68,793 (2003 Purchase Agreement)


Warrant to purchase shares of Common Stock:  72,207 (2003 Purchase Agreement)


 


	
   

  	
  DANIEL S. & PATRICE M. PERKINS JOINT WROS

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel S. Perkins

  	
   

  
	
   

  	
  Name:  Daniel
  S. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  30,000
(Cert. No. C-28)


Warrant to purchase shares of Common Stock:  30,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  DAVID C. & CAROLE A. BROWN TTEE’S FBO

  DAVID C. & CAROLE A. BROWN REV TR U/A DTD

  10/23/97

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-11)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


	
   

  	
  DAVID M. WESTRUM TTEE FBO

  DAVID M. WESTRUM REV LIV TRUST

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of Common
Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  30,000
(Cert. No. C-37)


Warrant to purchase shares of Common Stock:  30,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  DONALD O. & JANET M. VOIGHT TTEE’S FBO

  JANET M. VOIGHT TR U/D DTD 8/29/96

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  16,000
(Cert. No. C-25)


Warrant to purchase shares of Common Stock:  16,000 (2003 Purchase Agreement)


 


	
   

  	
  DR. PAUL C. & NANCY S. SEEL JT WROS

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for conversion
into Common Stock:  20,000 (Cert. No.
C-22)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  DENNIS D. GONYEA

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-16)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


	
   

  	
  DOROTHY J. HOEL

  
	
   

  	
   

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-17)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


	
   

  	
  PATHFINDER VENTURES II, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven C. Zahnow

  	
   

  
	
   

  	
  Name:  Steven
  C. Zahnow

  
	
   

  	
  Title:  Managing Member of RRS Ventures, L.L.C.

  Manager of Pathfinder Ventures II, L.L.C.

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  1,400,000
(Cert. No. C-1)


Warrant to purchase shares of Common Stock:  1,400,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  JOHN T. POTTER

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-21)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


	
   

  	
  E. TERRY SKONE

  
	
   

  	
   

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  30,000
(Cert. No. C-23)


Warrant to purchase shares of Common Stock:  30,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  USB PIPER JAFFRAY AS CUSTODIAN FBO

  BRADLEY A. ERICKSON IRA

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  30,000
(Cert. No. C-15)


Warrant to purchase shares of Common Stock:  30,000 (2003 Purchase Agreement)


 


	
   

  	
  USB PIPER JAFFRAY AS CUSTODIAN FBO

  CHARLES W. PAPPAS IRA

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-19)


Warrants to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  USB PIPER JAFFRAY AS CUSTODIAN FBO

  DAVID H. POTTER IRA ROLLOVER

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of Common
Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-29)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


	
   

  	
  USB PIPER JAFFRAY AS CUSTODIAN FBO

  JAMES G. PETERS IRA

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  15,000
(Cert. No. C-30)


Warrant to purchase shares of Common Stock:  15,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  USB PIPER JAFFRAY AS CUSTODIAN FBO

  RICHARD C. PERKINS IRA

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for conversion
into Common Stock:  20,000 (Cert. No.
C-18)


Warrants to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


	
   

  	
  USB PIPER JAFFRAY AS CUSTODIAN FBO

  ROBERT H. CLAYBURGH IRA

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement:  0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-14)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  MANUEL A. VILLAFANA

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-24)


Warrant to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


	
   

  	
  SHAWN P. WEINAND

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-26)


Warrants to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 
















 


	
   

  	
  WILLIAM H. BAXTER TTEE FBO

  WILLIAM H. BAXTER REV TR U/A DTD 7/3/96

  
	
   

  	
  By:  Perkins
  Capital Management, Inc., Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Name:  Richard
  C. Perkins

  
	
   

  	
  Title:  Vice
  President

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  20,000
(Cert. No. C-9)


Warrants to purchase shares of Common Stock:  20,000 (2003 Purchase Agreement)


 


 


	
   

  	
  /s/ Gary S. Kohler

  	
   

  
	
   

  	
  Gary S. Kohler

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for
conversion into Common Stock:  0


Warrants to purchase shares of Common Stock:  66,667 (2003 Purchase Agreement)


 


 


	
   

  	
  /s/ Richard C. Perkins

  	
   

  
	
   

  	
  Richard C. Perkins

  



 


Number of Shares of Series B Preferred surrendered herewith for
conversion into Common Stock:  0


Number of Shares of
Common Stock

subject to the 2002 Purchase Agreement: 
0


Number of Shares of Series C Preferred surrendered herewith for conversion
into Common Stock:  0


Warrants to purchase shares of Common Stock:  30,000 (2003 Purchase Agreement)