Document:

EXHIBIT 10.16

                               PURCHASE AGREEMENT

          THIS  PURCHASE  AGREEMENT  ("Agreement")  is made as of the 8th day of
August,  2002  by  and  among  Artisoft,   Inc.,  a  Delaware  corporation  (the
"Company"),  and the Investors set forth on the signature  pages affixed  hereto
(each an "Investor" and collectively the "Investors").

                                    RECITALS

          A. The Company and the Investors are  executing  and  delivering  this
Agreement in reliance upon the exemption from securities  registration  afforded
by the provisions of Regulation D  ("Regulation  D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended; and

          B. The Investors  wish to purchase  from the Company,  and the Company
wishes to sell and issue to the  Investors,  upon the terms and  subject  to the
conditions stated in this Agreement,  an aggregate of 1,904,800 shares of common
stock,  par value $.01 per share,  of the Company (the  "Shares") at a per share
purchase price of $1.05 (the "Purchase Price"); and

          C. At the closing of the  purchase of the Shares,  the parties  hereto
will execute and deliver a Registration  Rights Agreement,  in the form attached
hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the
Company will provide  certain  registration  rights under the  Securities Act of
1933,  as amended  and the rules and  regulations  promulgated  thereunder,  and
applicable state securities laws.

          In consideration of the mutual promises made herein and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the parties hereto agree as follows:

     1.  DEFINITIONS.  In addition to those terms defined above and elsewhere in
this Agreement,  for the purposes of this  Agreement,  the following terms shall
have the meanings here set forth:

          "AFFILIATE"  means, with respect to any Person, any other Person which
directly or indirectly  Controls,  is controlled  by, or is under common control
with, such Person.

          "AGGREGATE   PURCHASE   PRICE"   means  Two  Million   Forty   Dollars
($2,000,040).

          "AGREEMENTS"  means  this  Agreement,   and  the  Registration  Rights
Agreement.

          "COMMON STOCK" means the common stock,  $0.01 par value per share,  of
the  Company,  and any  capital  stock  of any  class of the  Company  hereafter
authorized that shall not be entitled to a fixed sum in respect of the rights of
<PAGE>
the holders thereof to participate in dividends or in the distribution of assets
upon the voluntary or involuntary liquidation,  dissolution or winding up of the
Company.

          "CONTROL"  means the possession,  direct or indirect,  of the power to
direct  or cause the  direction  of the  management  and  policies  of a Person,
whether through the ownership of voting securities, by contract or otherwise.

          "COMPANY'S  KNOWLEDGE"  means the actual  knowledge of the  "executive
officers" (as such term is defined in Rule 405  promulgated  under the 1933 Act)
of the Company after due inquiry.

          "INTELLECTUAL  PROPERTY"  means  all of the  following:  (i)  patents,
patent   applications,   patent  disclosures  and  inventions  (whether  or  not
patentable  and whether or not reduced to practice);  (ii)  trademarks,  service
marks, trade dress, trade names,  corporate names,  logos,  slogans and Internet
domain names,  together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable  works; (iv) registrations,  applications and
renewals for any of the foregoing;  (v) trade secrets,  confidential information
and  know-how  (including  but not  limited  to ideas,  formulae,  compositions,
manufacturing and production processes and techniques,  research and development
information,  drawings,  specifications,  designs, business and marketing plans,
and customer  and supplier  lists and related  information);  and (vi)  computer
software (including but not limited to data, data bases and documentation).

          "MATERIAL  ADVERSE  EFFECT"  means a  material  adverse  effect on the
assets, liabilities,  results of operations, condition (financial or otherwise),
business, or prospects of the Company and its subsidiaries taken as a whole.

          "NASDAQ"  means The Nasdaq Stock  Market,  Inc.,  its  successors  and
assigns.

          "PERSON"  means  an  individual,  corporation,   partnership,  limited
liability  company,  trust,  business trust,  association,  joint stock company,
joint venture, sole proprietorship,  unincorporated  organization,  governmental
authority or any other form of entity not specifically listed herein.

          "REQUIRED  INVESTORS"  means the  Investors  holding a majority of the
Shares held by all Investors at the time of determination.

          "PRIOR  AGREEMENTS"  means  (i) the  Purchase  Agreement,  dated as of
August 8, 2001, among the Company and the investors named therein, including the
schedules  and  exhibits  thereto  and the other  certificates  and  instruments
delivered   pursuant  thereto  (the  "Prior  Purchase   Agreement"),   (ii)  the
Certificate  of  Designations,  Preferences  and Rights of Series B  Convertible
Preferred  Stock of the  Company  filed by the  Company  pursuant  to the  Prior
Purchase  Agreement,  (iii) the warrants  issued by the Company  pursuant to the
Prior  Purchase  Agreement,  and any  replacement  warrants  issued  in  respect
thereof, (iv) the Registration Rights Agreement,  dated as of August 8, 2001, by
and among  the  Company  and the  investors  named  therein  and (v) the  Voting
Agreement,  dated as of  February  28,  2002,  by and among the  Company and the
stockholders named therein.

                                      -2-
<PAGE>
          "SEC FILINGS" has the meaning set forth in Section 4.6.

          "SHARES"  means the  shares of Common  Stock  being  purchased  by the
Investors hereunder.

          "SUBSIDIARY" has the meaning set forth in Section 4.1.

          "1933 ACT" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

          "1934 ACT" means the Securities Exchange Act of 1934, as amended,  and
the rules and regulations promulgated thereunder.

     2. PURCHASE AND SALE OF THE SHARES.  Subject to the terms and conditions of
this Agreement, on the Closing Date, each of the Investors shall severally,  and
not jointly,  purchase,  and the Company shall sell and issue to the  Investors,
the  Shares in the  respective  amounts  and for the  respective  portion of the
Aggregate  Purchase  Price  set  forth  opposite  each  Investor's  name  on the
signature pages attached hereto.

     3. CLOSING.  Upon  confirmation  that the  conditions to closing  specified
herein have been satisfied,  the Company shall deliver to Lowenstein Sandler PC,
in trust, a certificate or certificates, registered in such name or names as the
Investors may designate,  representing the Shares,  with  instructions that such
certificates  are to be held for release to the  Investors  only upon payment of
the Aggregate Purchase Price to the Company.  Upon receipt by Lowenstein Sandler
PC of the  certificates,  each Investor  shall promptly cause a wire transfer in
same day funds to be sent to the account of the Company as instructed in writing
by the Company,  in an amount  representing  such Investor's pro rata portion of
the  Aggregate  Purchase  Price  as set  forth  on the  signature  pages to this
Agreement. On the date (the "Closing Date") the Company receives such funds, the
certificates  evidencing  the Shares  shall be  released to the  Investors  (the
"Closing").  The purchase and sale of the Shares shall take place at the offices
of Lowenstein Sandler PC, 1330 Avenue of the Americas, 21st Floor, New York, New
York,  or at such other  location  and on such other date as the Company and the
Investors shall mutually agree.

     4.  REPRESENTATIONS  AND  WARRANTIES  OF THE  COMPANY.  The Company  hereby
represents  and  warrants  to the  Investors  that,  except  as set forth in the
Schedules delivered herewith:

          4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the Company
and its Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of the  jurisdiction of its  incorporation  and has
all  requisite  corporate  power and  authority  to carry on its business as now
conducted and own its  properties.  Each of the Company and its  Subsidiaries is
duly qualified to do business as a foreign  corporation  and is in good standing
in each  jurisdiction  in which the conduct of its business or its  ownership or
leasing of property makes such  qualification  or leasing  necessary  unless the

                                      -3-
<PAGE>
failure to so qualify  has not and could not  reasonably  be  expected to have a
Material  Adverse Effect.  The Company's  subsidiaries are reflected on SCHEDULE
4.1 hereto (the "Subsidiaries").

          4.2  AUTHORIZATION.  The Company has full power and  authority and has
taken all requisite action on the part of the Company,  its officers,  directors
and stockholders necessary for (i) the authorization,  execution and delivery of
the Agreements,  (ii) authorization of the performance of all obligations of the
Company  hereunder  or  thereunder,  other than the approval of the Proposal (as
defined in Section 7.11 of this  Agreement)  by the  Company's  stockholders  in
accordance with applicable law and stock market rules and regulations, and (iii)
the authorization,  issuance and delivery of the Shares, other than the approval
of the Proposal by the Company's  stockholders in accordance with applicable law
and stock market rules and  regulations.  The  Agreements  constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance  with their  terms,  subject to  bankruptcy,  insolvency,  fraudulent
transfer, reorganization,  moratorium and similar laws of general applicability,
relating to or affecting creditors' rights generally.

          4.3  CAPITALIZATION.  Set  forth on  SCHEDULE  4.3  hereto  is (a) the
authorized  capital  stock of the Company on the date hereof;  (b) the number of
shares  of  capital  stock  issued  and  outstanding  on the last  business  day
immediately prior to the date hereof;  (c) the number of shares of capital stock
issuable  pursuant  to the  Company's  stock  plans  on the  last  business  day
immediately  prior to the date  hereof;  and (d) the number of shares of capital
stock issuable and reserved for issuance  pursuant to securities (other than the
Shares)  exercisable  for, or convertible into or exchangeable for any shares of
capital stock of the Company on the last business day  immediately  prior to the
date hereof.  All of the issued and outstanding  shares of the Company's capital
stock  have  been  duly  authorized  and  validly  issued  and are  fully  paid,
nonassessable and free of pre-emptive  rights and were issued in full compliance
with applicable  law. All of the issued and outstanding  shares of capital stock
of each  Subsidiary  have been duly  authorized and validly issued and are fully
paid,  nonassessable  and  free  of  pre-emptive  rights,  were  issued  in full
compliance with applicable law and are owned by the Company, beneficially and of
record,  subject to no lien,  encumbrance or other adverse claim.  Except as set
forth in the Prior  Agreements,  no Person is entitled to pre-emptive or similar
statutory or  contractual  rights with respect to any securities of the Company.
Except as set forth in the Prior Agreements,  there are no outstanding warrants,
options,  convertible securities or other rights,  agreements or arrangements of
any character  under which the Company or any of its  Subsidiaries  is or may be
obligated to issue any equity  securities of any kind and except as contemplated
by this Agreement,  neither the Company nor any of its Subsidiaries is currently
in negotiations  for the issuance of any equity  securities of any kind.  Except
for the  Registration  Rights Agreement and the Prior  Agreements,  there are no
voting  agreements,  buy-sell  agreements,  option  or right  of first  purchase
agreements  or other  agreements  of any kind among the  Company  and any of the
securityholders of the Company relating to the securities of the Company held by
them.  Except for the Prior  Agreements,  the Company has not granted any Person
the right, which is presently in effect or could arise in the future, to require
the  Company to  register  any  securities  of the  Company  under the 1933 Act,
whether on a demand basis or in connection  with the  registration of securities
of the Company for its own account or for the account of any other Person.

                                      -4-
<PAGE>
          4.4 VALID ISSUANCE.  The Shares have been duly and validly  authorized
and,  when  issued  and paid for  pursuant  to this  Agreement,  will be validly
issued,  fully paid and  nonassessable  free and clear of all  encumbrances  and
restrictions, except for restrictions on transfer set forth in this Agreement or
imposed by applicable securities laws.

          4.5 CONSENTS. Other than the approval of the Proposal by the Company's
stockholders  in  accordance  with  applicable  law and stock  market  rules and
regulations and related filings under  applicable  federal  securities laws, the
execution,  delivery and  performance  by the Company of the  Agreements and the
offer,  issuance and sale of the Shares  require no consent of,  action by or in
respect of, or filing with, any Person,  governmental  body, agency, or official
other than filings that have been made pursuant to applicable  state  securities
laws and post-sale  filings pursuant to applicable state and federal  securities
laws which the Company  undertakes to file within the  applicable  time periods.
The Company has taken all action  necessary to exempt the sale of the Shares and
the other  transactions  contemplated  by this  Agreement from the provisions of
Section 203 of the Delaware General Corporation Law.

          4.6  DELIVERY OF SEC FILINGS;  BUSINESS.  The Company has provided the
Investors  with copies of the  Company's  most recent Annual Report on Form 10-K
for the fiscal  year ended June 30,  2001 (the  "10-K"),  and all other  reports
filed by the  Company  pursuant to the 1934 Act since the filing of the 10-K and
prior to the date hereof (collectively,  the "SEC Filings"). The SEC Filings are
the only  filings  required  of the  Company  pursuant  to the 1934 Act for such
period.  The  Company and its  Subsidiaries  are  engaged  only in the  business
described in the SEC Filings and the SEC Filings contain a complete and accurate
description  in all  material  respects  of the  business of the Company and its
Subsidiaries, taken as a whole.

          4.7 USE OF PROCEEDS.  The proceeds of the sale of the Common Stock and
the  Warrants  hereunder  shall be used by the Company  for working  capital and
general corporate purposes.

          4.8 NO  MATERIAL  ADVERSE  CHANGE.  Since  June 30,  2001,  except  as
identified and described in the SEC Filings and except for the Prior  Agreements
and the transactions specified therein, there has not been:

               (i) any change in the consolidated assets, liabilities, financial
condition  or  operating  results  of the  Company  from that  reflected  in the
financial  statements  included in the Company's most recent Quarterly Report on
Form 10-Q,  except changes in the ordinary course of business which have not and
could not reasonably be expected to have a Material Adverse Effect;

               (ii)  any  declaration  or  payment  of  any  dividend,   or  any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;

               (iii) any material  damage,  destruction or loss,  whether or not
covered  by  insurance  to  any  assets  or  properties  of the  Company  or its
Subsidiaries;

                                      -5-
<PAGE>
               (iv) any waiver,  not in the ordinary course of business,  by the
Company or any Subsidiary of a material right or of a material debt owed to it;

               (v)  any   satisfaction  or  discharge  of  any  lien,  claim  or
encumbrance or payment of any obligation by the Company or a Subsidiary,  except
in the  ordinary  course of  business  and which is not  material to the assets,
properties,  financial  condition,  operating results or business of the Company
and its Subsidiaries taken as a whole (as such business is presently conducted);

               (vi) any change or  amendment  to the  Company's  Certificate  of
Incorporation  or  by-laws,  or  material  change to any  material  contract  or
arrangement  by which the Company or any  Subsidiary is bound or to which any of
their respective assets or properties is subject;

               (vii)  any  material  labor  difficulties  or,  to the  Company's
Knowledge,  labor union  organizing  activities with respect to employees of the
Company or any Subsidiary;

               (viii) any material  transaction entered into by the Company or a
Subsidiary other than in the ordinary course of business;

               (ix) the loss of the  services of any key  employee,  or material
change in the  composition or duties of the senior  management of the Company or
any Subsidiary;

               (x) the loss or threatened  loss of any customer which has had or
is reasonably expected to have a Material Adverse Effect; or

               (xi) any other event or condition of any  character  that has had
or is reasonably be expected to have a Material Adverse Effect.

          4.9 SEC FILINGS; S-3 ELIGIBILITY.

               (a) At the time of filing thereof, the SEC Filings complied as to
form in all material  respects with the requirements of the 1934 Act and did not
contain any untrue  statement  of a material  fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.

               (b) During the preceding two years, each  registration  statement
and any amendment  thereto filed by the Company pursuant to the 1933 Act and the
rules and  regulations  thereunder,  as of the date such  statement or amendment
became effective, complied as to form in all material respects with the 1933 Act
and did not contain any untrue statement of a material fact or omit to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  made therein,  in light of the  circumstances  under which they were

                                      -6-
<PAGE>
made, not misleading;  and each  prospectus  filed pursuant to Rule 424(b) under
the  1933  Act,  as of its  issue  date  and as of the  closing  of any  sale of
securities  pursuant  thereto did not contain any untrue statement of a material
fact or omit to state  any  material  fact  required  to be  stated  therein  or
necessary  in order to make the  statements  made  therein,  in the light of the
circumstances under which they were made, not misleading.

               (c) The Company meets the registrant requirements for use of Form
S-3 set forth in General  Instruction  I.A. of Form S-3. As of the date  hereof,
the sale by the Investors of the Registrable Securities (as such term is defined
in the Registration Rights Agreement) meets the transaction requirements for use
of Form S-3 set forth in General Instruction I.B.3. of Form S-3.

          4.10  NO  CONFLICT,  BREACH,  VIOLATION  OR  DEFAULT.  The  execution,
delivery and  performance  of the Agreements by the Company and the issuance and
sale of the Shares will not conflict  with or result in a breach or violation of
any of the  terms  and  provisions  of, or  constitute  a default  under (i) the
Company's  Certificate  of  Incorporation  or the Company's  Bylaws,  both as in
effect on the date hereof  (copies of which have been  provided to the Investors
before the date hereof),  or (ii)(a) any statute,  rule,  regulation or order of
any  governmental  agency or body or any  court,  domestic  or  foreign,  having
jurisdiction over the Company,  any Subsidiary or any of their respective assets
or  properties,  or (b) any  agreement or instrument to which the Company or any
Subsidiary  is a party or by which the  Company or a  Subsidiary  is bound or to
which any of their  respective  assets or properties is subject,  other than, in
the case of (ii), such conflicts,  breaches or violations as, individually or in
the aggregate,  have not and could not reasonably be expected to have a Material
Adverse Effect.

          4.11 TAX MATTERS.  The Company and each Subsidiary has timely prepared
and filed (within all applicable  extension periods) all tax returns required to
have  been  filed  by the  Company  or  such  Subsidiary  with  all  appropriate
governmental  agencies  and  timely  paid all  taxes  owed by it.  The  charges,
accruals  and  reserves  on the books of the Company in respect of taxes for all
fiscal periods are adequate in all material respects,  and there are no material
unpaid  assessments  against the Company or any Subsidiary nor, to the Company's
Knowledge,  any basis for the assessment of any additional  taxes,  penalties or
interest for any fiscal  period or audits by any federal,  state or local taxing
authority except for any assessment which is not material to the Company and its
Subsidiaries,  taken as a whole. All taxes and other assessments and levies that
the Company or any  Subsidiary is required to withhold or to collect for payment
have been duly withheld and collected and paid to the proper governmental entity
or third  party when due.  There are no tax liens or claims  pending  or, to the
Company's Knowledge,  threatened against the Company or any Subsidiary or any of
their  respective  assets or  property.  There are no  outstanding  tax  sharing
agreements or other such arrangements  between the Company and any Subsidiary or
other corporation or entity.

          4.12 TITLE TO PROPERTIES.  Except as disclosed in the SEC Filings, the
Company and each Subsidiary has good and marketable title to all real properties
and all other  properties  and assets owned by it, in each case free from liens,
encumbrances  and  defects  that would  materially  affect the value  thereof or
materially  interfere with the use made or currently  planned to be made thereof
by them;  and except as  disclosed  in the SEC  Filings,  the  Company  and each
Subsidiary  holds  any  leased  real  or  personal   property  under  valid  and
enforceable  leases with no exceptions that would materially  interfere with the
use made or currently planned to be made thereof by them.

                                      -7-
<PAGE>
          4.13  CERTIFICATES,  AUTHORITIES  AND  PERMITS.  Except as has not and
could not reasonably be expected to have a Material Adverse Effect,  the Company
and each  Subsidiary  possesses  adequate  certificates,  authorities or permits
issued by appropriate  governmental  agencies or bodies necessary to conduct the
business  now  operated by it, and neither  the Company nor any  Subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate,  authority or permit that, if determined  adversely to the
Company or such  Subsidiary,  could  reasonably  be  expected to have a Material
Adverse Effect, individually or in the aggregate.

          4.14 NO LABOR  DISPUTES.  No material labor dispute with the employees
of the  Company or any  Subsidiary  exists or, to the  Company's  Knowledge,  is
imminent.

          4.15 INTELLECTUAL PROPERTY.

               (a) All registered or issued Intellectual Property of the Company
and its  Subsidiaries  is currently in compliance in all material  respects with
all legal requirements  (including timely filings,  proofs and payments of fees)
and is valid and enforceable. No registered Intellectual Property of the Company
or its Subsidiaries  which is necessary for the conduct of Company's and each of
its Subsidiaries'  respective  businesses as currently conducted or as currently
proposed  to be  conducted  has  been or is now  involved  in any  cancellation,
dispute or  litigation,  and,  to the  Company's  Knowledge,  no such  action is
threatened.  No patent of the  Company  or its  Subsidiaries  has been or is now
involved in any interference, reissue, re-examination or opposition proceeding.

               (b) All of the licenses,  sublicenses,  consent, royalty or other
agreements  concerning  Intellectual Property which is necessary for the conduct
of Company's and each of its  Subsidiaries'  respective  businesses as currently
conducted or as  currently  proposed to be conducted to which the Company or any
Subsidiary  is a party or by which any of their  assets  are bound  (other  than
generally commercially available, non-custom, off-the-shelf software application
programs  having a retail  acquisition  price of less than  $10,000 per license)
(collectively,  "LICENSE  AGREEMENTS") are valid and binding  obligations of the
Company or its  Subsidiaries  that are parties  thereto  and,  to the  Company's
Knowledge,  the other parties  thereto,  enforceable  in  accordance  with their
terms,  except  to  the  extent  that  enforcement  thereof  may be  limited  by
bankruptcy,  insolvency,  reorganization,  moratorium,  fraudulent conveyance or
other similar laws  affecting the  enforcement of creditors'  rights  generally,
and, to the Company's  Knowledge,  there exists no event or condition which will
result in a material  violation or breach of, or constitute (with or without due
notice  or  lapse  of  time or  both) a  default  by the  Company  or any of its
Subsidiaries under any such License Agreement.

               (c) The Company and its  Subsidiaries own or have the valid right
to use  all of the  Intellectual  Property  necessary  for  the  conduct  of the
Company's and each of its  Subsidiaries'  businesses  substantially as currently
conducted and for the ownership,  maintenance and operation of the Company's and
its Subsidiaries' properties and assets.

                                      -8-
<PAGE>
               (d) The Intellectual  Property which is necessary for the conduct
of  the  Company's  and  each  of its  Subsidiaries'  respective  businesses  as
currently  conducted  or as  currently  proposed to be conducted is owned by the
Company or its  Subsidiaries,  as the case may be,  free and clear of all liens,
encumbrances,   adverse   claims  or  obligations  to  license  all  such  owned
Intellectual  Property,  other than licenses entered into in the ordinary course
of  the  Company's  and  its  Subsidiaries'  businesses.  The  Company  and  its
Subsidiaries  have a valid and enforceable  right to use all other  Intellectual
Property  used or held for use in the  respective  businesses of the Company and
its Subsidiaries.  The Company and its Subsidiaries have the right to use all of
the owned and licensed  Intellectual Property which is necessary for the conduct
of Company's and each of its  Subsidiaries'  respective  businesses as currently
conducted or as currently proposed to be conducted in all jurisdictions in which
they conduct their businesses.

               (e) The  Company  and each of its  Subsidiaries  have  taken  all
reasonable steps to maintain, police and protect the Intellectual Property which
it owns and which is  necessary  for the  conduct of  Company's  and each of its
Subsidiaries'  respective  businesses  as  currently  conducted  or as currently
proposed to be conducted, including the execution of appropriate confidentiality
agreements and intellectual  property and work product assignments and releases.
The conduct of the  Company's  and its  Subsidiaries'  businesses  as  currently
conducted does not, to the Company's Knowledge,  infringe or otherwise impair or
conflict with (collectively, "Infringe") any Intellectual Property rights of any
third party, and, to the Company's Knowledge,  the Intellectual  Property rights
of the  Company  and its  Subsidiaries  which are  necessary  for the conduct of
Company's  and each of its  Subsidiaries'  respective  businesses  as  currently
conducted or as currently  proposed to be conducted  are not being  Infringed by
any third party.  There is no litigation or order pending or outstanding  or, to
the  Company's  Knowledge,  threatened  or  imminent,  that  seeks  to  limit or
challenge or that concerns the ownership, use, validity or enforceability of any
Intellectual  Property of the Company and its Subsidiaries and the Company's and
its Subsidiaries' use of any Intellectual  Property owned by a third party, and,
to the Company's Knowledge, there is no valid basis for the same.

               (f) The consummation of the transactions contemplated hereby will
not  result  in  the  alteration,  loss,  impairment  of or  restriction  on the
Company's  or any of its  Subsidiaries'  ownership  or  right  to use any of the
Intellectual  Property  which is necessary for the conduct of Company's and each
of  its  Subsidiaries'  respective  businesses  as  currently  conducted  or  as
currently proposed to be conducted.

               (g) All software owned by the Company or any of its Subsidiaries,
and, to the Company's Knowledge, all software licensed from third parties by the
Company or any of its Subsidiaries,  (i) is free from any material defect,  bug,
virus, or programming,  design or documentation error; (ii) operates and runs in
a reasonable and efficient  business manner;  and (iii) conforms in all material
respects to the specifications and purposes thereof.

               (h) The Company and its Subsidiaries  have taken reasonable steps
to protect the  Company's  and its  Subsidiaries'  rights in their  confidential
information and trade secrets. Each employee,  consultant and contractor who has
had access to  proprietary  Intellectual  Property  which is  necessary  for the
conduct of Company's  and each of its  Subsidiaries'  respective  businesses  as
currently  conducted  or as currently  proposed to be conducted  has executed an
agreement to maintain the confidentiality of such Intellectual  Property and has

                                      -9-
<PAGE>
executed  appropriate  agreements  that are  substantially  consistent  with the
Company's  standard forms  thereof.  Except under  confidentiality  obligations,
there  has  been  no  material  disclosure  of  any  of  the  Company's  or  its
Subsidiaries' confidential information or trade secrets to any third party.

          4.16 ENVIRONMENTAL MATTERS.  Neither the Company nor any Subsidiary is
in  violation  of any  statute,  rule,  regulation,  decision  or  order  of any
governmental agency or body or any court,  domestic or foreign,  relating to the
use,  disposal or release of  hazardous or toxic  substances  or relating to the
protection or restoration  of the  environment or human exposure to hazardous or
toxic substances (collectively, "Environmental Laws"), owns or operates any real
property  contaminated  with any substance that is subject to any  Environmental
Laws,  is liable for any  off-site  disposal  or  contamination  pursuant to any
Environmental  Laws, and is subject to any claim  relating to any  Environmental
Laws,  which  violation,  contamination,  liability  or  claim  has had or could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate;  and there is no pending or, to the Company's  Knowledge,  threatened
investigation that might lead to such a claim.

          4.17 LITIGATION.  Except as disclosed in the SEC Filings, there are no
pending  actions,  suits or  proceedings  against or affecting the Company,  its
Subsidiaries or any of its or their properties;  and to the Company's Knowledge,
no such actions, suits or proceedings are threatened or contemplated.

          4.18 FINANCIAL  STATEMENTS.  The financial statements included in each
SEC Filing fairly present the consolidated  financial position of the Company as
of the dates shown and its consolidated results of operations and cash flows for
the  periods  shown,  and  such  financial  statements  have  been  prepared  in
conformity with United States generally accepted  accounting  principles applied
on a  consistent  basis  (except  as may be  disclosed  therein  or in the notes
thereto,  and, in the case of quarterly  financial  statements,  as permitted by
Form 10-Q under the 1934 Act).  Except as set forth in the financial  statements
of the  Company  included in the SEC  Filings  filed  prior to the date  hereof,
neither the Company nor any  Subsidiaries  has any  liabilities,  contingent  or
otherwise,  except those which have not had and could not reasonably be expected
to have a Material Adverse Effect, individually or in the aggregate.

          4.19 INSURANCE COVERAGE.  The Company and each Subsidiary maintains in
full  force and effect  insurance  coverage  that is  customary  for  comparably
situated  companies for the business  being  conducted and  properties  owned or
leased by the Company and each Subsidiary,  and the Company reasonably  believes
such insurance coverage to be adequate against all liabilities, claims and risks
against which it is customary for comparably situated companies to insure.

          4.20  COMPLIANCE  WITH  NASDAQ  CONTINUED  LISTING  REQUIREMENTS.  The
Company is in  compliance  with  applicable  Nasdaq  National  Market  continued
listing  requirements.  There are no  proceedings  pending or, to the  Company's
Knowledge,  threatened  against the Company relating to the continued listing of

                                      -10-
<PAGE>
the Company's Common Stock on the Nasdaq National Market and the Company has not
received any notice of, nor to the  Company's  Knowledge is there any basis for,
the delisting of the Common Stock from the Nasdaq National Market.

          4.21  BROKERS AND  FINDERS.  No Person  will have,  as a result of the
transactions  contemplated by this Agreement, any valid right, interest or claim
against or upon the Company,  any Subsidiary or an Investor for any  commission,
fee  or  other   compensation   pursuant  to  any   agreement,   arrangement  or
understanding entered into by or on behalf of the Company.

          4.22 NO DIRECTED SELLING EFFORTS OR GENERAL SOLICITATION.  Neither the
Company  nor  any  Person  acting  on  its  behalf  has  conducted  any  general
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Shares.

          4.23  NO  INTEGRATED  OFFERING.  Neither  the  Company  nor any of its
Affiliates  (other  than any  Investor),  nor any Person  acting on its or their
behalf  has,  directly  or  indirectly,  made any offers or sales of any Company
security or solicited any offers to buy any security,  under  circumstances that
would adversely affect reliance by the Company on Section 4(2) for the exemption
from  registration  for the  transactions  contemplated  hereby or would require
registration  under the 1933 Act of the sale of the Shares as  provided  in this
Agreement.

          4.24  QUESTIONABLE  PAYMENTS.  Neither  the  Company  nor  any  of its
Subsidiaries nor, to the Company's Knowledge, any of their respective current or
former shareholders,  directors,  officers,  employees,  agents or other Persons
acting on behalf of the Company or any Subsidiary,  has on behalf of the Company
or any Subsidiary or in connection with their  respective  businesses:  (a) used
any corporate funds for unlawful  contributions,  gifts,  entertainment or other
unlawful  expenses  relating  to  political  activity;  (b) made any  direct  or
indirect  unlawful  payments to any  governmental  officials or  employees  from
corporate  funds;  (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment,  kickback or other unlawful payment of
any nature.

          4.25 AFFILIATE  TRANSACTIONS.  Except as disclosed in the SEC Filings,
none of the officers, directors or employees of the Company is presently a party
to  any  transaction  with  the  Company  or a  Subsidiary  or  to  a  presently
contemplated  transaction  (other than for services as  employees,  officers and
directors)  that  would be  required  to be  disclosed  pursuant  to Item 404 of
Regulation  S-K  promulgated  under the 1933 Act,  without  regard to the dollar
thresholds contained in such Item.

          4.26  DISCLOSURES.  None of the  written  materials  delivered  to the
Investors in connection  with the  transactions  contemplated  by the Agreements
contains any untrue  statement  of a material  fact or omits to state a material
fact necessary in order to make the statements  contained  therein,  in light of
the circumstances under which they were made, not misleading.

     5.  REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.  Each of the Investors
hereby severally, and not jointly, represents and warrants to the Company that:

                                      -11-
<PAGE>
          5.1  ORGANIZATION  AND EXISTENCE.  The Investor is a validly  existing
corporation,  limited  partnership  or  limited  liability  company  and has all
requisite  corporate,   partnership  or  limited  liability  company  power  and
authority to invest in the Shares pursuant to this Agreement.

          5.2  AUTHORIZATION.  The  execution,  delivery and  performance by the
Investor of the Agreements  have been duly  authorized  and the Agreements  will
each  constitute  the valid and  legally  binding  obligation  of the  Investor,
enforceable  against the Investor in  accordance  with their  terms,  subject to
bankruptcy,  insolvency,  fraudulent  transfer,  reorganization,  moratorium and
similar  laws of general  applicability,  relating  to or  affecting  creditors'
rights generally.

          5.3 PURCHASE  ENTIRELY  FOR OWN ACCOUNT.  The Shares to be received by
the Investor  hereunder will be acquired for the Investor's own account,  not as
nominee or agent,  and not with a view to the resale or distribution of any part
thereof in violation of the 1933 Act, and the Investor has no present  intention
of selling, granting any participation in, or otherwise distributing the same in
violation of the 1933 Act. The Investor is not a registered  broker dealer or an
entity engaged in the business of being a broker dealer.

          5.4 INVESTMENT EXPERIENCE.  The Investor acknowledges that it can bear
the economic risk and complete loss of its investment in the Shares and has such
knowledge and experience in financial or business  matters that it is capable of
evaluating the merits and risks of the investment contemplated hereby.

          5.5 DISCLOSURE OF INFORMATION.  The Investor has had an opportunity to
receive  documents  related to the Company and to ask  questions  of and receive
answers from the Company  regarding the Company,  its business and the terms and
conditions of the offering of the Shares. The Investor  acknowledges  receipt of
copies of the SEC Filings.  Neither such  inquiries  nor any other due diligence
investigation  conducted  by the  Investor  shall  modify,  amend or affect  the
Investor's  right  to  rely  on the  Company's  representations  and  warranties
contained in this Agreement.

          5.6 RESTRICTED  SECURITIES.  The Investor  understands that the Shares
are characterized as "restricted  securities" under the U.S. federal  securities
laws inasmuch as they are being  acquired from the Company in a transaction  not
involving a public offering and that under such laws and applicable  regulations
such  securities may be resold without  registration  under the 1933 Act only in
certain limited circumstances.

          5.7 LEGENDS.  It is understood that, until the earlier of (i) the time
(other than an Allowed Delay (as defined in the Registration  Rights Agreement))
the Investor has a present  intention to dispose of Shares  pursuant to the Plan
of Distribution  included in a currently  available final Prospectus prepared by
the Company and relating to a Registration  Statement  effected  pursuant to the
Registration Rights Agreement (a "Final  Prospectus")  applicable to such Shares
or (ii)  the  time  when  such  Shares  may be  sold  pursuant  to Rule  144(k),
certificates  evidencing  such  Shares  may bear the  following  or any  similar
legend:

                                      -12-
<PAGE>
               (a) "The  securities  represented  hereby may not be  transferred
unless  (i) such  securities  have  been  registered  for sale  pursuant  to the
Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to
Rule  144(k),   or  (iii)  the  Company  has  received  an  opinion  of  counsel
satisfactory to it that such transfer may lawfully be made without  registration
under  the  Securities  Act of  1933 or  qualification  under  applicable  state
securities laws."

               (b) If required  by the  authorities  of any state in  connection
with the  issuance  of sale of the  Shares,  the legend  required  by such state
authority.

          Upon the earlier of (i)  registration  of the Shares for sale pursuant
to the Registration Rights Agreement or (ii) Rule 144(k) becoming available with
respect to the Shares,  the Company shall,  upon an Investor's  written  request
(which in the case of clause (i) shall be accompanied by a written certification
by the  Investor  that (A) the  Investor  has a present  intention to dispose of
Shares  covered  by  such  registration   statement  pursuant  to  the  Plan  of
Distribution included in a currently available Final Prospectus related thereto,
and (B) the  Investor  will comply  with the  prospectus  delivery  requirements
applicable to such disposition,  and which, in the case of clause (ii), shall be
accompanied by such reasonable and appropriate customary  representations as may
be reasonably requested by the Company),  promptly cause certificates evidencing
such Shares to be replaced with certificates  which do not bear such restrictive
legends.  When the  Company is  required  to cause  unlegended  certificates  to
replace previously issued legended certificates,  if unlegended certificates are
not delivered to an Investor within ten (10) business days of submission by that
Investor  of legended  stock  certificate(s)  to the  Company's  transfer  agent
together with a  representation  letter in customary  form, the Company shall be
liable to the Investor for a penalty equal to 1% of the aggregate purchase price
of the Shares evidenced by such  certificate(s)  for each thirty (30) day period
(or portion thereof) beyond such ten (10) days that the unlegended  certificates
have not been so delivered.

          5.8  ACCREDITED  INVESTOR.  The Investor is an accredited  investor as
defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

          5.9 NO  GENERAL  SOLICITATION.  The  Investor  did  not  learn  of the
investment  in the  Shares  as a result of any  public  advertising  or  general
solicitation.

          5.10  BROKERS AND  FINDERS.  No Person  will have,  as a result of the
transactions  contemplated by this Agreement, any valid right, interest or claim
against or upon the Company,  any Subsidiary or an Investor for any  commission,
fee  or  other   compensation   pursuant  to  any   agreement,   arrangement  or
understanding entered into by or on behalf of the Investors.

     6. CONDITIONS TO THE CLOSING.

          6.1  CONDITIONS TO THE INVESTORS'  OBLIGATIONS.  The obligation of the
Investors to purchase the Shares at the Closing is subject to the fulfillment to
the Investors'  satisfaction,  on or prior to the Closing Date, of the following
conditions, any of which may be waived by the Required Investors:

                                      -13-
<PAGE>
               (a) The  representations  and  warranties  made by the Company in
Section 4 hereof  shall be true and  correct  when  made,  and shall be true and
correct on the  Closing  Date with the same force and effect as if they had been
made on and as of said date,  except to the extent  any such  representation  or
warranty  expressly  speaks of an earlier  date,  and, to the extent not already
qualified by materiality,  except for changes which, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate.  The  Company  shall have  performed  in all  material  respects  all
obligations and conditions  herein required to be performed or observed by it on
or prior to the Closing Date.

               (b) The Company shall have  obtained in a timely  fashion any and
all consents,  permits and waivers  necessary or appropriate for consummation of
the purchase and sale of the Shares,  including, but not limited to the approval
of the Proposal by the vote and in the manner  required by  applicable  laws and
the applicable Nasdaq Marketplace Rules.

               (c) The Company  shall have  executed and delivered a counterpart
of the Registration Rights Agreement.

               (d) No judgment, writ, order,  injunction,  award or decree of or
by any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or  proceeding  should have been  instituted  by any  governmental
authority,   enjoining  or  preventing  the  consummation  of  the  transactions
contemplated hereby or in the other Agreements.

               (e) The Company shall have delivered a  Certificate,  executed on
behalf of the  Company by its Chief  Executive  Officer  or its Chief  Financial
Officer,  dated as of the Closing  Date,  certifying to the  fulfillment  of the
conditions specified in subsections (a) and (b) of Section 6.1.

               (f) The Company shall have delivered a  Certificate,  executed on
behalf of the Company by its Secretary, dated as of the Closing Date, certifying
the resolutions  adopted by the Board of Directors of the Company  approving the
transactions  contemplated  by this  Agreement and the other  Agreements and the
issuance of the Shares,  certifying the current  versions of the  Certificate of
Incorporation  and Bylaws of the Company and certifying as to the signatures and
authority of persons  signing the Agreements and related  documents on behalf of
the Company.

               (g) The  Investors  shall have  received an opinion from Hale and
Dorr LLP,  the  Company's  counsel,  dated as of the Closing  Date,  in form and
substance reasonably acceptable to the Investors, addressing those legal matters
set forth in SCHEDULE 6 hereto.

               (h) No stop  order or  suspension  of  trading  shall  have  been
imposed  by Nasdaq,  the SEC or any other  governmental  regulatory  body and be
continuing with respect to public trading in the Common Stock.

                                      -14-
<PAGE>
          6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's obligation
to sell and issue the Shares at the Closing is subject to the fulfillment to the
satisfaction  of the  Company on or prior to the Closing  Date of the  following
conditions, any of which may be waived by the Company:

               (a) The  representations  and warranties made by the Investors in
Section 5 hereof,  other than the  representations  and warranties  contained in
Sections   5.3,   5.4,   5.5,   5.6,   5.7,   5.8  and  5.9   (the   "Investment
Representations"), shall be true and correct in all material respects when made,
and shall be true and correct in all material  respects on the Closing Date with
the same force and  effect as if they had been made on and as of said date.  The
Investment  Representations shall be true and correct in all respects when made,
and shall be true and correct in all  respects on the Closing Date with the same
force and effect as if they had been made on and as of said date.  The Investors
shall have  performed in all material  respects all  obligations  and conditions
herein  required to be  performed or observed by them on or prior to the Closing
Date.   The  Investors   shall  have  delivered  to  the  Company  one  or  more
certificates,  executed on behalf of each Investor by an  authorized  signatory,
dated as of the  Closing  Date,  certifying  to  fulfillment  of the  conditions
specified in this subsection (a) with respect to such Investor.

               (b) The Company shall have  obtained in a timely  fashion any and
all consents,  permits and waivers  necessary or appropriate for consummation of
the purchase and sale of the Shares,  including, but not limited to the approval
of the Proposal by the vote and in the manner  required by  applicable  laws and
the applicable Nasdaq Marketplace Rules.

               (c) No judgment, writ, order,  injunction,  award or decree of or
by any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or  proceeding  should have been  instituted  by any  governmental
authority,   enjoining  or  preventing  the  consummation  of  the  transactions
contemplated hereby or in the other Agreements.

               (d) The Investors shall have executed and delivered a counterpart
of the Registration Rights Agreement.

               (e) The Investors  shall have  delivered  the Aggregate  Purchase
Price to the Company.

          6.3 TERMINATION OF OBLIGATIONS TO EFFECT CLOSING; EFFECTS.

               (a) The  obligations  of the  Company,  on the one hand,  and the
Investors, on the other hand, to effect the Closing shall terminate as follows:

                    (i) Upon the mutual  written  consent of the Company and the
Required Investors;

                                      -15-
<PAGE>
                    (ii) By the  Company if any of the  conditions  set forth in
Section 6.2 shall have become incapable of fulfillment,  and shall not have been
waived by the Company;

                    (iii) By the Required Investors if any of the conditions set
forth in Section 6.1 shall have become  incapable of fulfillment,  and shall not
have been waived by the Required Investors; or

                    (iv) By either the Company or the Required  Investors if the
Closing has not occurred on or prior to September 30, 2002;

provided,  however,  that, (x) except in the case of clause (i) above, the party
seeking to terminate  its  obligation to effect the Closing shall not then be in
breach  of any of  its  representations,  warranties,  covenants  or  agreements
contained in this Agreement or the other  Agreements if such breach has resulted
in the  circumstances  giving  rise to such  party's  seeking to  terminate  its
obligation  to effect  the  Closing,  and (y) in the event  that (A)  either the
Company or the Required  Investors  terminate this Agreement pursuant to Section
6.3(a)(ii) or (iii) as a result of the failure of the Company's  stockholders to
approve the Proposal at the Stockholders  Meeting (as defined below) and (B) the
Company's  Board of Directors  has withdrawn or modified its  recommendation  to
stockholders   pursuant  to  the  provisions  of  Section  7.11(b),   upon  such
termination the Company shall pay to the Investors,  pro rata based on their pro
rata share of the Aggregate Purchase Price, a breakup fee of $500,000 in cash.

               (b) In the event of  termination  by the Company or the  Required
Investors of their  obligations  to effect the Closing  pursuant to this Section
6.3, written notice thereof shall forthwith be given to the other parties hereto
and,  except as specified  above,  the  obligation  of all parties to effect the
Closing shall be terminated,  without  further  action by any party.  Nothing in
this Section 6.3 shall be deemed to release any party from any liability for any
breach by such party of the terms and  provisions of this Agreement or the other
Agreements or to impair the right of any party to compel specific performance by
any other party of its obligations under this Agreement or the other Agreements.

     7. COVENANTS AND AGREEMENTS OF THE COMPANY.

          7.1 RIGHT OF THE INVESTORS TO PARTICIPATE IN FUTURE TRANSACTIONS.  (a)
So long as the Investors  and/or their  assignees  continue to be the beneficial
owners  (determined  in  accordance  with  the  rules  and  regulations  of  the
Securities  and  Exchange  Commission)  of at  least a  majority  of the  Shares
purchased by them under this  Agreement,  the Investors  shall have the right to
participate in future capital  raising  transactions on the terms and conditions
set forth in this Section 7.1.  During such period,  the Company  shall give ten
(10) business days advance  written  notice to such Investors  and/or  assignees
prior to any  non-public  offer or sale of any of the  Company's  securities  by
providing to such Investors  and/or their assignees a term sheet  containing all
material business terms of the proposed transaction. Such Investors and/or their
assignees  shall have the right  (pro rata in  accordance  with such  Investors'
participation  in this  offering)  to  purchase  such  securities  which are the
subject of the proposed  transaction for the same  consideration and on the same
terms and conditions as contemplated for such third-party sale. The Investor(s)'

                                      -16-
<PAGE>
rights hereunder must be exercised in writing by the Investor(s) within five (5)
business days following  receipt of the notice from the Company.  If, subsequent
to the Company giving notice to an Investor  hereunder but prior to the Investor
exercising  its right to participate  (or the expiration of the five-day  period
without  response from the  Investor),  the terms and conditions of the proposed
third-party  sale are changed in any material respect from that disclosed in the
term sheet provided to such Investor, the Company shall be required to provide a
new notice to the Investor  hereunder  and the  Investors  shall have the right,
which must be  exercised  within five (5) business  days of such new notice,  to
exercise  their rights to purchase  the  securities  on such  changed  terms and
conditions  as provided  hereunder.  In the event the  Investors do not exercise
their  rights  hereunder,  or  affirmatively  decline to engage in the  proposed
transaction  with the Company,  then the Company may proceed with such  proposed
transaction on the same terms and conditions as noticed to the Investors.

               (b) The  rights  provided  for in this  Section  7.1 shall not be
exercisable  unless  and  until the  expiration  or  termination  in full of the
provisions of Section 7.1 of the Prior Purchase Agreement.

          7.2 REPORTS.  So long as the Investors and/or their assignees continue
to be the  beneficial  owners  (determined  in  accordance  with the  rules  and
regulations of the Securities and Exchange Commission) of at least a majority of
the Shares  acquired by them under this  Agreement,  the Company will furnish to
such Investors and/or their assignees such  information  relating to the Company
and its  Subsidiaries  as from time to time may  reasonably be requested by such
Investors and/or their assignees;  provided, however, that such Investors and/or
assignees shall hold in confidence any  confidential or proprietary  information
received from the Company and identified as such at the time of disclosure  such
information  and  shall use any such  confidential  or  proprietary  information
solely for the purpose of  monitoring  and  evaluating  their  investment in the
Company  and;  provided,  further,  that the  Company  shall not be  required to
provide any  information to the Investors  which, if disclosed to such Investors
and/or their assignees  pursuant to the terms of this Section 7.2, would, in the
good faith  judgment  of the  Company,  cause the Company or any  Subsidiary  to
violate  the terms of a  confidentiality  undertaking  binding on the Company or
such Subsidiary.  Each Investor and/or assignee  acknowledges  that it is aware,
and  that it will  advise  its  representatives  who are  given  access  to such
information,  that the United States  securities  laws may prohibit a person who
has material, non-public information concerning matters that may be disclosed to
it pursuant to this Section 7.2 from  purchasing  or selling  securities  of the
Company  or a  company  which may be, or may be  affiliated  with,  a party to a
business  arrangement or proposed business  arrangement with the Company or from
communicating such information to any other person under  circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities.

          7.3 PRESS RELEASES.  Any press release or other  publicity  concerning
this  Agreement or the  transactions  contemplated  by this  Agreement  shall be
submitted  to the  Investors  for comment a  reasonable  period of time prior to
issuance, unless the release is required to be issued within a shorter period of
time by law or pursuant to the rules of a national securities exchange.

                                      -17-
<PAGE>
          7.4 NO CONFLICTING  AGREEMENTS.  The Company will not take any action,
enter into any agreement or make any commitment that would conflict or interfere
in any  material  respect  with  the  obligations  to the  Investors  under  the
Agreements.

          7.5  INSURANCE.  So  long  as the  Investors  and/or  their  assignees
continue to be the beneficial  owners  (determined in accordance  with the rules
and  regulations  of the  Securities  and  Exchange  Commission)  of at  least a
majority of the Shares acquired by them under this Agreement,  the Company shall
not materially reduce the insurance coverages described in Section 4.19.

          7.6  COMPLIANCE  WITH  LAWS.  So long as the  Investors  and/or  their
assignees  continue to be the beneficial  owners  (determined in accordance with
the rules and regulations of the Securities and Exchange Commission) of at least
a majority of the Shares acquired by them under this Agreement, the Company will
use reasonable  efforts to comply with all applicable laws, rules,  regulations,
orders  and  decrees  of all  governmental  authorities,  except  to the  extent
non-compliance  (in one instance or in the aggregate)  would not have a Material
Adverse Effect.

          7.7  LISTING  OF  UNDERLYING  SHARES  AND  RELATED  MATTERS.  Promptly
following the date hereof, the Company shall take such action as may be required
to cause the Shares to be listed on the Nasdaq  National  Market as  promptly as
possible  but no  later  than the  effective  date of the  registration  thereof
contemplated  by the  Registration  Rights  Agreement.  Further,  if the Company
applies  to have its  Common  Stock  or other  securities  traded  on any  other
principal  stock exchange or market,  it shall include in such  application  the
Shares  and will take such other  action as is  necessary  to cause such  Common
Stock to be so listed. So long as the Investors and/or their assignees  continue
to be the  beneficial  owners  (determined  in  accordance  with the  rules  and
regulations of the Securities and Exchange Commission) of at least a majority of
the  Shares  acquired  by them  under  this  Agreement,  the  Company  will  use
commercially  reasonable  efforts to  continue  the  listing  and trading of its
Common Stock on the Nasdaq National Market and, in accordance,  therewith,  will
use commercially reasonable efforts to comply in all respects with the Company's
reporting,  filing  and  other  obligations  under  the  bylaws or rules of such
exchange, as applicable.

          7.8 DESIGNATED DIRECTOR.

               (a) So long as the Investors hold at least 33% of the Shares, the
Investors shall have the right to designate one person for election to the board
of directors of the Company. Each of the Investors  acknowledges that so long as
Special  Situations Fund III, L.P. ("SSF") and/or one of its Affiliates hold any
of such securities, SSF shall have the right to designate such nominee (the "SSF
Designee"). The Company shall use its best efforts to cause such SSF Designee to
be elected to the Company's  board of directors;  provided that if the Investors
change the SSF  Designee,  the Company need not use such best efforts until such
time as the Company has received the  effective  resignation  from the Company's
Board of Directors of the prior SSF Designee.  The rights of the Investors under
this Section  7.8(a) are in addition to any other rights of the Investors  under
the Prior Agreement.

                                      -18-
<PAGE>
               (b) Subject to any limitations imposed by applicable law, the SSF
Designee  shall be entitled to the same  perquisites,  including  stock options,
reimbursement  of expenses  and other  similar  rights in  connection  with such
person's  membership  on the Board of Directors  of the Company,  as every other
non-executive member of the Board of Directors of the Company.

          7.9 RIGHTS  PLAN.  So long as the  Investors  and/or  their  assignees
continue to be the beneficial  owners  (determined in accordance  with the rules
and  regulations  of the  Securities  and  Exchange  Commission)  of at  least a
majority of the Shares acquired by them under this Agreement,  the Company shall
not,  without  the prior  written  consent of the  Investors  holding at least a
majority of the outstanding  Shares,  adopt any other shareholder rights plan or
"poison pill", enter into any rights agreement or other arrangement with respect
thereto,  issue any such  rights to  stockholders  thereunder  or take any other
actions with respect thereto.

          7.10 PURCHASE PRICE ADJUSTMENTS.

               (a) Subject to Section  7.10(e)  below,  if during the MFN Period
(defined  below) the  Company  issues or sells any  shares of its  Common  Stock
(other  than in an  Exempted  Transaction  (as  defined  below))  at a Per Share
Selling Price (as defined  below) lower than $1.05  (appropriately  adjusted for
any stock split,  reverse stock split, stock dividend or other  reclassification
or  combination  of the  Common  Stock  occurring  after the date  hereof),  the
Purchase Price of the Shares sold to the Investors  hereunder  shall be adjusted
downward to equal such lower Per Share Selling Price and the Investors  shall be
entitled  to receive  additional  shares of Common  Stock as provided in Section
7.10(c).  In no event shall the Purchase  Price of the Shares be reduced to less
than $.01.  The Company shall give to the Investors  written  notice of any such
sale within two  Business  Days after the closing of any such  issuance or sale.
The term "Shares" as used in this  Agreement  shall include shares issued to the
Investors pursuant to this Section 7.10.

               (b) (i) For the  purposes  of this  Section  7.10,  the term "Per
Share Selling Price" shall include the amount actually paid by third parties for
each share of Common Stock  without  deduction  of any expenses  incurred or any
underwriting  commissions  or  concessions  paid or  allowed  by the  Company in
connection therewith. A sale of shares of Common Stock shall include the sale or
issuance of rights, options,  warrants or convertible securities under which the
Company is or may become  obligated to issue shares of Common Stock, and in such
circumstances  the Per Share Selling  Price of the Common Stock covered  thereby
shall also include the exercise or conversion  price thereof (in addition to the
consideration  received by the Company upon such sale or  issuance).  In case of
any such security issued within the MFN Period in a "Variable Rate  Transaction"
or an "MFN  Transaction"  (each as defined  below),  the Per Share Selling Price
shall be deemed to be the lowest  conversion or exercise  price in effect at any
time during the MFN Period in the case of a Variable  Rate  Transaction,  or the
lowest  adjustment price in effect at any time during the MFN Period in the case
of an MFN Transaction (regardless of whether shares of Common Stock are actually
issued at such price). If an adjustment is made in accordance with the preceding
sentence  and  the  relevant   conversion,   exercise  or  adjustment  price  is
subsequently reduced at any time during the MFN Period below the price in effect
at the time such adjustment was made, further adjustments shall be made pursuant

                                      -19-
<PAGE>
hereto to reflect  any such  subsequent  reductions.  If shares are issued for a
consideration  other than cash,  the Per Share  Selling  Price shall be the fair
value of such consideration as determined in good faith by independent certified
public  accountants   mutually  acceptable  to  the  Company  and  the  Required
Investors.

                    (ii) The  term  "Variable  Rate  Transaction"  shall  mean a
transaction in which the Company  issues or sells any debt or equity  securities
that are convertible into, exchangeable or exercisable for, or include the right
to  receive  additional  shares  of Common  Stock  either  (x) at a  conversion,
exercise or exchange  rate or other price that is based upon and/or  varies with
the trading  prices of or quotations  for the Common Stock at any time after the
initial  issuance  of  such  debt  or  equity  securities,  or (y)  with a fixed
conversion,  exercise or  exchange  price that is subject to being reset at some
future date after the initial  issuance of such debt or equity  security or upon
the occurrence of specified or contingent events directly or indirectly  related
to the business of the Company or the market for the Common Stock (but excluding
standard  adjustment  provisions in the event of any stock split,  reverse stock
split, stock dividend or reclassification).

                    (iii) The term "MFN Transaction" shall mean a transaction in
which  the  Company  issues  or  sells  any  securities  in  a  capital  raising
transaction or series of related  transactions (the "New Offering") which grants
to the investor (the "New Investor") the right to receive additional  securities
based upon  future  capital  raising  transactions  of the Company on terms more
favorable than those granted to the New Investor in the New Offering.

                    (iv) The term "MFN  Period"  shall  mean the  period  ending
twenty four (24) months  following the first effective date of the  Registration
Statement to be filed  pursuant to Section  2(a)(i) of the  Registration  Rights
Agreement.

                    (v) The  term  "Exempt  Transaction"  shall  mean any of the
following: (i) the granting of options and the issuance and sale of Common Stock
upon the  exercise  of options  granted to  directors,  officers,  employees  or
consultants of the Company in connection  with their service as directors of the
Company,  their  employment by the Company or their  retention as consultants by
the Company pursuant to an equity compensation program approved by the Company's
Board of  Directors or the  compensation  committee  of the  Company's  Board of
Directors,  (ii) the  issuance or sale of Common  Stock upon the  conversion  or
exercise of securities  issued prior to the date hereof,  and (iii) the issuance
or  sale  of  Common  Stock  in any  stock  split,  stock  dividend  or  similar
recapitalization  of the Company's capital stock, to the extent, but only to the
extent  that such  issuance  or sale also  results  in a change in the Per Share
Selling Price as set forth above.

               (c) If an adjustment of the Purchase  Price is required  pursuant
to Section 7.10(a),  to effect such adjustment the Company shall deliver to each
Investor  within  twenty (20)  calendar  days of the closing of the  transaction
giving rise to the  adjustment  ("Delivery  Date")  additional  shares of Common
Stock in an amount equal to (i) the portion of the Aggregate Purchase Price paid
by the Investor  divided by the Per Share Selling Price determined under Section
7.10(a),  minus (ii) the  aggregate  of (A) the total number of shares of Common
Stock originally  purchased by that Investor hereunder plus (B) the total number
of shares of Common Stock previously issued to such Investor in respect of prior

                                      -20-
<PAGE>
adjustments  to the  Purchase  Price  pursuant  to  this  Section  7.10  ("Prior
Adjustment Shares");  provided,  however,  that if at the time of the closing of
the transaction  giving rise to the  adjustment,  the Investor and its assignees
hereunder  collectively own less than all of the Shares originally  purchased by
the Investor  hereunder,  the additional shares to be delivered pursuant to this
adjustment  shall be pro rated by a fraction,  the numerator of which is the sum
of (X) the number of original Shares owned by the Investor and such assignees at
the time of the closing of the transaction giving rise to the adjustment and (Y)
the Prior Adjustment Shares owned by the Investor and such assignees at the time
of the  closing  of the  transaction  giving  rise  to the  adjustment  and  the
denominator  of which is the sum of (A) the total  number  of Shares  originally
purchased by the Investor  hereunder as set forth on the signature  pages hereto
and (B) the  total  Prior  Adjustment  Shares  issued to the  Investor  and such
assignees hereunder (the "Adjustment Factor"), and; provided,  further, that for
purposes of calculating any such  adjustment,  the Investor or an assignee shall
be deemed to have sold a number  of Shares  equal to any short  position  in the
Common Stock  maintained by the Investor or any such  assignee,  as the case may
be, at the time of the transaction  giving rise to the adjustment.  In the event
the Company fails to deliver the  additional  shares by the Delivery  Date,  the
Company  shall be liable to the Investors  and/or their  assignees for a penalty
equal to 1.5% of the Aggregate Purchase Price (in each instance to such Investor
or its assignees pro rata in accordance with its participation in this offering)
multiplied  by the  Adjustment  Factor,  per  30-day  period or pro rata for any
portion thereof following the Delivery Date until the delivery of the additional
shares,  payable in cash. In lieu of any  fractional  share interest to which an
Investor or its assignee may be entitled,  the Company shall pay to the Investor
or such assignee an amount in cash equal to the  fractional  interest  times the
Per Share Selling  Price then in effect (after giving effect to the  transaction
giving rise to such fractional interest).

               (d) In case of any stock  split or  reverse  stock  split,  stock
dividend,  reclassification  of the Common  Stock,  recapitalization,  merger or
consolidation,  or like  capital  adjustment  affecting  the Common Stock of the
Company,  the  provisions of Section 7.10 shall be applied in a fair,  equitable
and reasonable manner so as to give effect, as nearly as may be, to the purposes
hereof.

          7.11 PROXY STATEMENT; STOCKHOLDERS MEETING. (a) Promptly following the
execution  and  delivery of this  Agreement,  the Company  shall take all action
necessary to call a meeting of its stockholders (the "Stockholders Meeting") for
the purpose of seeking  approval of the Company's  stockholders for the issuance
and  sale  of the  Shares  to the  Investors  (the  "Proposal").  In  connection
therewith,  the  Company  will  promptly  prepare  and file  with the SEC  proxy
materials  (including  a  proxy  statement  and  form of  proxy)  for use at the
Stockholders  Meeting  and,  after  receiving  and  promptly  responding  to any
comments of the SEC thereon,  shall  promptly  mail such proxy  materials to the
stockholders of the Company.  Each Investor shall promptly furnish in writing to
the Company such information relating to such Investor and its investment in the
Company  as the  Company  may  reasonably  request  for  inclusion  in the Proxy
Statement.  The Company will comply with  Section  14(a) of the 1934 Act and the
rules  promulgated  thereunder in relation to any proxy statement (as amended or
supplemented,  the  "Proxy  Statement")  and any form of proxy to be sent to the
stockholders of the Company in connection with the Stockholders Meeting, and the
Proxy  Statement shall not, on the date of the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to shareholders or at the time of

                                      -21-
<PAGE>
the  Stockholders  Meeting,  contain any untrue  statement of a material fact or
omit to state any material fact necessary in order to make the  statements  made
therein not false or misleading, or omit to state any material fact necessary to
correct  any  statement  in  any  earlier  communication  with  respect  to  the
solicitation  of proxies or the  Stockholders  Meeting which has become false or
misleading.  If the Company should  discover,  at any time prior to the Closing,
any event  relating  to the Company or any of its  Subsidiaries  or any of their
respective affiliates, officers or directors that is required to be set forth in
a supplement or amendment to the Proxy  Statement,  in addition to the Company's
obligations  under the 1934 Act, the Company will promptly  inform the Investors
thereof.

               (b) Subject to their fiduciary  obligations  under applicable law
(as  determined  in  good  faith  by the  Company's  Board  of  Directors  after
consultation  with  the  Company's  outside  counsel),  the  Company's  Board of
Directors shall recommend to the Company's stockholders (and not revoke or amend
such  recommendation)  that the  stockholders  vote in favor of the Proposal and
shall cause the Company to take all commercially  reasonable action  (including,
without  limitation,  the  hiring  of a proxy  solicitation  firm of  nationally
recognized  standing)  to  solicit  the  approval  of the  stockholders  for the
Proposal. Whether or not the Company's Board of Directors determines at any time
after the date hereof that, due to its fiduciary duties, it must revoke or amend
its  recommendation to the Company's  stockholders,  the Company is required to,
and  will  take,  in  accordance  with  applicable  law and its  Certificate  of
Incorporation  and Bylaws,  all action  necessary  to convene  the  Stockholders
Meeting as promptly as practicable to consider and vote upon the approval of the
Proposal.

     8. SURVIVAL AND INDEMNIFICATION.

          8.1  SURVIVAL.   All   representations,   warranties,   covenants  and
agreements  contained in this Agreement  shall be deemed to be  representations,
warranties, covenants and agreements as of the date hereof and shall survive the
execution and delivery of this  Agreement  for a period of eighteen  months from
the date of this Agreement;  provided, however, that the provisions contained in
Section 7 hereof shall survive in accordance therewith.

          8.2  INDEMNIFICATION.   The  Company  agrees  to  indemnify  and  hold
harmless,  on an after-tax and after insurance recovery basis, each Investor and
its Affiliates and their respective  directors,  officers,  employees and agents
from and against any and all losses, claims,  damages,  liabilities and expenses
(including  without  limitation  reasonable  attorney fees and disbursements and
other expenses incurred in connection with investigating, preparing or defending
any  action,  claim  or  proceeding,  pending  or  threatened  and the  costs of
enforcement  hereof)  (collectively,  "Losses")  to which such Person may become
subject  as a result of any  breach of  representation,  warranty,  covenant  or
agreement  made by or to be  performed  on the  part of the  Company  under  the
Agreements or otherwise  resulting from any action,  claim or proceeding arising
out of the matters or  transactions  contemplated  by the  Agreements,  and will
reimburse  any such  Person for all such  amounts as they are  incurred  by such
Person.

          8.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS.  Promptly after receipt by
any  Person  (the  "Indemnified  Person")  of  notice  of any  demand,  claim or
circumstances  which would or might give rise to a claim or the  commencement of
any action,  proceeding or  investigation  in respect of which  indemnity may be
sought  pursuant to Section 8.2, such  Indemnified  Person shall promptly notify

                                      -22-
<PAGE>
the  Company in writing  and the  Company  shall  assume  the  defense  thereof,
including the employment of counsel reasonably  satisfactory to such Indemnified
Person,  and  shall  assume  the  payment  of all fees and  expenses;  PROVIDED,
HOWEVER,  that the  failure of any  Indemnified  Person so to notify the Company
shall not relieve the Company of its obligations  hereunder except to the extent
that the Company is materially prejudiced by such failure to notify. In any such
proceeding,  any  Indemnified  Person  shall  have the right to  retain  its own
counsel,  but the fees and expenses of such  counsel  shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed in writing to the retention of such counsel; or (ii) in the
reasonable judgment of such Indemnified Person representation of both parties by
the same counsel  would be  inappropriate  due to actual or potential  differing
interests  between them.  The Company shall not be liable for any  settlement of
any proceeding effected without its written consent,  which consent shall not be
unreasonably  withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff,  the Company shall  indemnify and hold harmless such
Indemnified  Person from and against any loss or liability (to the extent stated
above) by reason of such  settlement  or  judgment.  Without  the prior  written
consent of the  Indemnified  Person,  which  consent  shall not be  unreasonably
withheld,  the  Company  shall not  effect  any  settlement  of any  pending  or
threatened  proceeding  in respect of which any  Indemnified  Person is or could
have  been a party  and  indemnity  could  have been  sought  hereunder  by such
Indemnified Party, unless such settlement  includes an unconditional  release of
such Indemnified Person from all liability arising out of such proceeding.

     9. MISCELLANEOUS.

          9.1  SUCCESSORS  AND ASSIGNS.  This Agreement may not be assigned by a
party hereto  without the prior  written  consent of the Company or the Required
Investors,  as applicable,  except that without the prior written consent of the
Company,  but after  notice  duly given,  an Investor  may assign its rights and
delegate its duties  hereunder in whole or in part to an Affiliate or to a third
party  acquiring some or all of its Shares in a private  transaction.  The terms
and  conditions of this  Agreement  shall inure to the benefit of and be binding
upon the respective permitted successors and assigns of the parties.  Nothing in
this Agreement,  express or implied,  is intended to confer upon any party other
than the parties hereto or their respective successors and permitted assigns any
rights,  remedies,  obligations,  or  liabilities  under  or by  reason  of this
Agreement, except as expressly provided in this Agreement.

          9.2 COUNTERPARTS; FAXES. 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 also
be executed via facsimile, which shall be deemed an original.

          9.3  TITLES AND  SUBTITLES.  The  titles  and  subtitles  used in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

                                      -23-
<PAGE>
          9.4  NOTICES.  Unless  otherwise  provided,  any  notice  required  or
permitted  under this  Agreement  shall be given in writing  and shall be deemed
effectively  given as hereinafter  described (i) if given by personal  delivery,
then such  notice  shall be deemed  given upon such  delivery,  (ii) if given by
telex or  telecopier,  then such notice  shall be deemed  given upon  receipt of
confirmation of complete  transmittal,  (iii) if given by mail, then such notice
shall be deemed  given  upon the  earlier of (A)  receipt of such  notice by the
recipient  or (B) three days after such notice is deposited in first class mail,
postage prepaid,  and (iv) if given by an internationally  recognized  overnight
air courier,  then such notice  shall be deemed given one day after  delivery to
such carrier.  All notices shall be addressed to the party to be notified at the
address as follows,  or at such other address as such party may designate by ten
days' advance written notice to the other party pursuant to this Section 9.4:

                           If to the Company:

                                    Artisoft, Inc.
                                    5 Cambridge Center
                                    Cambridge, Massachusetts 02142
                                    Attn:   President
                                    Fax:    (617) 354-3564

                           With a copy to:

                                    Hale and Dorr LLP
                                    60 State Street
                                    Boston, Massachusetts 02109
                                    Attn:   Peter B. Tarr, Esq.
                                    Fax:    (617) 526-5000

                           If to the  Investors,  to the  addresses set forth on
                           the signature pages hereto.

          9.5  EXPENSES.  The  parties  hereto  shall  pay  their  own costs and
expenses  in  connection  herewith,  except  that  the  Company  shall  pay  the
reasonable  fees and  expenses of counsel to SSF,  but not in excess of $20,000.
Such payment  shall be made no later than the Closing  Date.  The Company  shall
reimburse the Investors  upon demand for all reasonable  out-of-pocket  expenses
incurred  by  the  Investors,  including  without  limitation  reimbursement  of
reasonable fees and expenses for one counsel selected by SSF, in connection with
any  amendment,  modification  or  waiver  of the  Agreements  requested  by the
Company.  In the event that legal proceedings are commenced by any party to this
Agreement  against  another  party  to this  Agreement  in  connection  with the
Agreements,  the party or parties which do not prevail in such proceedings shall
severally,  but  not  jointly,  pay  their  pro  rata  share  of the  reasonable
attorneys' fees and other reasonable  out-of-pocket  costs and expenses incurred
by the prevailing party in such proceedings.

          9.6 AMENDMENTS AND WAIVERS.  Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular  instance and either  retroactively or  prospectively),  only

                                      -24-
<PAGE>
with the written  consent of the Company and (i) prior to the Closing,  SSF, and
(ii) after the Closing, the Required Investors. Any amendment or waiver effected
in  accordance  with this  paragraph  shall be binding  upon each  holder of any
Shares  purchased  under this  Agreement  at the time  outstanding,  each future
holder of all such securities, and the Company.

          9.7  PUBLICITY.  No public  release  or  announcement  concerning  the
transactions contemplated hereby shall be issued by the Company or the Investors
without  the  prior  consent  of the  Company  (in  the  case  of a  release  or
announcement  by the Investors) or SSF (in the case of a release or announcement
by the Company) (which consents shall not be unreasonably  withheld),  except as
such release or announcement  may be required by law or the applicable  rules or
regulations of any securities  exchange or securities  market, in which case the
Company or the Investors, as the case may be, shall allow SSF or the Company, as
applicable,  reasonable  time to comment  on such  release  or  announcement  in
advance of such issuance.

          9.8  SEVERABILITY.  Any provision of this Agreement that is prohibited
or  unenforceable  in  any  jurisdiction  shall,  as to  such  jurisdiction,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating the remaining  provisions  hereof but shall be interpreted as if it
were  written  so as to be  enforceable  to  the  maximum  extent  permitted  by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall  not  invalidate  or  render  unenforceable  such  provision  in any other
jurisdiction.  To the extent  permitted by  applicable  law, the parties  hereby
waive any provision of law which  renders any  provisions  hereof  prohibited or
unenforceable in any respect.

          9.9 ENTIRE  AGREEMENT.  This  Agreement,  including  the  Exhibits and
Schedules hereto,  and the Registration  Rights Agreement  constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof and supersede all prior  agreements  and  understandings,  both oral and
written,  between the parties  with  respect to the  subject  matter  hereof and
thereof.

          9.10 FURTHER  ASSURANCES.  The parties  shall  execute and deliver all
such further  instruments  and  documents and take all such other actions as may
reasonably be required to carry out the transactions  contemplated hereby and to
evidence the fulfilment of the agreements herein contained.

          9.11  APPLICABLE  LAW.  This  Agreement  shall  be  governed  by,  and
construed in accordance  with, the laws of the State of Delaware  without regard
to principles of conflicts of laws.

          9.12 PREEMPTIVE RIGHTS. The Investors acknowledge that the acquisition
of the Shares  pursuant to the terms of this Agreement  satisfies the provisions
of Section 7.1 of the Prior  Purchase  Agreement.  In  addition,  the  Investors
hereby consent to a waiver by the other parties to the Prior Purchase  Agreement
of their rights under Section 7.1 of the Prior Purchase Agreement.

                            [signature page follows]

                                      -25-
<PAGE>
     IN WITNESS  WHEREOF,  the parties have  executed  this  Agreement or caused
their duly  authorized  officers to execute this  Agreement as of the date first
above written.

The Company:                                ARTISOFT, INC.

                                            By: /s/ Steven G. Manson
                                                --------------------------------
                                            Name: Steven G. Manson
                                            Title: President & CEO

                                      -26-
<PAGE>
The Investors:                              SPECIAL SITUATIONS FUND III, L.P.

                                            By: /s/ Austin Marxe
                                                --------------------------------
                                            Name: Austin Marxe
                                            Title: General Partner

Pro Rata Purchase Price: $1,085,700
Number of Shares: 1,034,000

Address for Notice:
                                            153 E. 53rd Street
                                            55th Floor
                                            New York, NY  10022

                                            with a copy to:

                                            Lowenstein Sandler PC
                                            65 Livingston Avenue
                                            Roseland, NJ  07068
                                            Attn:  John D. Hogoboom, Esq.
                                            Telephone: 973.597.2500
                                            Facsimile: 973.597.2400

                                            SPECIAL SITUATIONS CAYMAN FUND, L.P.

                                            By: /s/ Austin Marxe
                                                --------------------------------
                                            Name: Austin Marxe
                                            Title: General Partner

Pro Rata Purchase Price: $361,935
Number of Shares: 344,700

Address for Notice:
                                            153 E. 53rd Street
                                            55th Floor
                                            New York, NY  10022

                                      -27-
<PAGE>
                                            with a copy to:

                                            Lowenstein Sandler PC
                                            65 Livingston Avenue
                                            Roseland, NJ  07068
                                            Attn:  John D. Hogoboom, Esq.
                                            Telephone: 973.597.2500
                                            Facsimile: 973.597.2400

                                            SPECIAL SITUATIONS PRIVATE
                                            EQUITY FUND, L.P.

                                            By: /s/ Austin Marxe
                                                --------------------------------
                                            Name: Austin Marxe
                                            Title: General Partner

Pro Rata Purchase Price: $361,935
Number of Shares: 344,700

Address for Notice:
                                            153 E. 53rd Street
                                            55th Floor
                                            New York, NY  10022

                                            with a copy to:

                                            Lowenstein Sandler PC
                                            65 Livingston Avenue
                                            Roseland, NJ  07068
                                            Attn:  John D. Hogoboom, Esq.
                                            Telephone: 973.597.2500
                                            Facsimile: 973.597.2400

                                      -28-
<PAGE>
                                            SPECIAL SITUATIONS TECHNOLOGY FUND,
                                            L.P.

                                            By: /s/ Austin Marxe
                                                --------------------------------
                                            Name: Austin Marxe
                                            Title: General Partner

Pro Rata Purchase Price: $190,470
Number of Shares: 181,400

Address for Notice:
                                            153 E. 53rd Street
                                            55th Floor
                                            New York, NY  10022

                                            with a copy to:

                                            Lowenstein Sandler PC
                                            65 Livingston Avenue
                                            Roseland, NJ  07068
                                            Attn:  John D. Hogoboom, Esq.
                                            Telephone: 973.597.2500
                                            Facsimile: 973.597.2400

                                      -29-EXHIBIT 10.17

                          REGISTRATION RIGHTS AGREEMENT

     This  Registration  Rights Agreement (the  "Agreement") is made and entered
into as of this 27th day of  September,  2002 by and  among  Artisoft,  Inc.,  a
Delaware corporation (the "Company"),  and the "Investors" named in that certain
Purchase  Agreement,  dated  August 8, 2002,  by and between the Company and the
Investors (the "Purchase Agreement").

     The parties hereby agree as follows:

     1. CERTAIN DEFINITIONS.

          As used  in  this  Agreement,  the  following  terms  shall  have  the
following meanings:

          "AFFILIATE"  means, with respect to any person, any other person which
directly or indirectly  controls,  is controlled  by, or is under common control
with, such person.

          "COMMON STOCK" means the common stock,  $0.01 par value per share,  of
the  Company,  and any  capital  stock  of any  class of the  Company  hereafter
authorized that shall not be entitled to a fixed sum in respect of the rights of
the holders thereof to participate in dividends or in the distribution of assets
upon the voluntary or involuntary liquidation,  dissolution or winding up of the
Company.

          "INVESTORS"  shall  mean  the  Investors  identified  in the  Purchase
Agreement  and any  Affiliate or permitted  transferee  of any Investor who is a
subsequent holder of any Registrable Securities.

          "PROSPECTUS"  shall mean the prospectus  included in any  Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the  terms of the  offering  of any  portion  of the  Registrable  Securities
covered  by  such  Registration  Statement  and  by  all  other  amendments  and
supplements  to the  prospectus,  including  post-effective  amendments  and all
material incorporated by reference in such prospectus.

          "REGISTER,"  "REGISTERED" and  "REGISTRATION"  refer to a registration
made by preparing  and filing a  Registration  Statement or similar  document in
compliance with the 1933 Act (as defined below), and the declaration or ordering
of effectiveness of such Registration Statement or document.

          "REGISTRABLE  SECURITIES" shall mean the shares of Common Stock issued
pursuant to the Purchase Agreement  (including shares issued pursuant to Section
7.10 thereof) and any other securities  issued or issuable with respect to or in
exchange  for the  shares  of  Common  Stock  (because  of stock  splits,  stock
dividends,   reclassifications,   recapitalizations,   combinations  or  similar
events);  provided, that, shares of Common Stock that are Registrable Securities
shall  cease  to  be  Registrable   Securities  upon  (A)  sale  pursuant  to  a
Registration  Statement  or Rule 144  under  the 1933  Act,  or (B) such  shares
becoming eligible for sale by the Investors pursuant to Rule 144(k).
<PAGE>
          "REGISTRATION  STATEMENT" shall mean any registration statement of the
Company  filed  under  the  1933  Act  that  covers  the  resale  of  any of the
Registrable Securities pursuant to the provisions of this Agreement,  amendments
and  supplements  to  such  Registration  Statement,   including  post-effective
amendments,  all  exhibits and all  material  incorporated  by reference in such
Registration Statement.

          "REQUIRED  INVESTORS"  shall mean the Investors  holding a majority of
the Registrable Securities at the time of determination.

          "SEC" means the U.S. Securities and Exchange Commission.

          "1933 ACT" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

          "1934 ACT" means the Securities Exchange Act of 1934, as amended,  and
the rules and regulations promulgated thereunder.

     2. REGISTRATION.

               (a) REGISTRATION STATEMENTS.

               (i)  Promptly  following  the  Closing  Date (as  defined  in the
Purchase  Agreement)  but no later than thirty (30) days after the Closing  Date
(the "Filing  Deadline"),  the Company  shall  prepare and file with the SEC one
Registration Statement on Form S-3 (or, if Form S-3 is not then available to the
Company, on such form of registration statement as is then available to effect a
registration for resale of the Registrable  Securities),  covering the resale of
all of the Registrable Securities then outstanding;  provided, however, that the
Filing  Deadline may be extended for up to 30 days in the event that the Company
is not then eligible to use Form S-3 to effect a registration  for resale of the
Registrable  Securities.  Such  Registration  Statement also shall cover, to the
extent  allowable  under  the  1933  Act and the  rules  promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with
respect to the Registrable Securities. The Company shall use its best efforts to
obtain from each person who now has  piggyback  registration  rights a waiver of
those  rights  with  respect to the  Registration  Statement.  The  Registration
Statement  (and each  amendment  or  supplement  thereto,  and each  request for
acceleration  of  effectiveness  thereof)  shall be provided in accordance  with
Section 3(c) to the  Investors  and their  counsel  prior to its filing or other
submission.  If a Registration  Statement covering the Registrable Securities is
not  filed  with the SEC on or  prior to the  Filing  Deadline  (as such  Filing
Deadline may be extended  pursuant to the proviso in the first  sentence of this
clause  (i),  the  Company  will make pro rata  payments  to each  Investor,  as
liquidated  damages  and not as a  penalty,  in an  amount  equal to 1.5% of the
aggregate  amount  invested by such  Investor in the Shares for any month or pro
rata for any  portion  thereof  following  the date by which  such  Registration
Statement  should have been filed for which no  Registration  Statement is filed
with respect to the Registrable Securities.

               (ii) ADDITIONAL REGISTRABLE  SECURITIES.  Upon the written demand
of any Investor  following the issuance by the Company of  additional  shares of

                                      -2-
<PAGE>
Common Stock  pursuant to Section 7.10 of the  Purchase  Agreement,  the Company
shall prepare and file with the SEC one or more Registration  Statements on Form
S-3 (or,  if Form S-3 is not then  available  to the  Company,  on such  form of
registration  statement as is then available to effect a registration for resale
of such additional shares of Common Stock (the "Additional Shares") covering the
resale of the Additional Shares.  Such Registration  Statement also shall cover,
to the extent allowable under the 1933 Act and the rules promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with
respect to the  Additional  Shares.  The Company  shall use its best  efforts to
obtain from each person who now has  piggyback  registration  rights a waiver of
those  rights with  respect to such  Registration  Statement.  The  Registration
Statement  (and each  amendment  or  supplement  thereto,  and each  request for
acceleration  of  effectiveness  thereof)  shall be provided in accordance  with
Section  3(c) to the  Investor  and its  counsel  prior to its  filing  or other
submission.  If a Registration  Statement  covering the Additional Shares is not
filed with the SEC within  thirty (30) days of the request of any Investor  (the
"Demand Deadline"), the Company will make pro rata payments to each Investor, as
liquidated  damages  and not as a  penalty,  in an amount  equal to 1.5% of such
portion of the  aggregate  amount  invested by such Investor in the Shares as is
represented by such Additional  Shares for any month or pro rata for any portion
thereof following the date by which such Registration Statement should have been
filed  for  which  no  Registration  Statement  is  filed  with  respect  to the
Additional Shares;  provided,  however, that the Demand Deadline may be extended
for up to 30 days in the event that the Company is not then eligible to use Form
S-3 to effect a registration for resale of the Registrable Securities.

               (b) EXPENSES.  The Company will pay all expenses  associated with
each  registration,  including filing and printing fees,  reasonable  accounting
fees  and  expenses,  reasonable  fees  and  expenses  of one  counsel  for  the
Investors,  costs  associated with clearing the Registrable  Securities for sale
under  applicable  state  securities  laws,  listing  fees  and  the  Investors'
reasonable   expenses  in  connection  with  the  registration,   but  excluding
discounts,  commissions, fees of underwriters,  selling brokers, dealer managers
or similar  securities  industry  professionals  with respect to the Registrable
Securities being sold.

               (c) EFFECTIVENESS.

               (i) The Company shall use commercially reasonable efforts to have
the  Registration  Statement  declared  effective  as soon as  practicable.  The
Company  shall  notify the  Investors  by  facsimile  or e-mail as  promptly  as
practicable,  and in  any  event,  within  twenty-four  (24)  hours,  after  any
Registration  Statement is declared effective and shall  simultaneously  provide
the  Investors  with copies of any related  Prospectus  to be used in connection
with the sale or other disposition of the securities covered thereby. If (A) (x)
a Registration  Statement  covering the  Registrable  Securities is not declared
effective  by the SEC  within 90 days  after the  Closing  Date (120 days if the
Registration  Statement  is subject  to an SEC  review),  or (y) a  Registration
Statement covering Additional Shares is not declared effective by the SEC within
90 days following the demand of an Investor  relating to the  Additional  Shares
covered  thereby  (120 days if the  Registration  Statement is subject to an SEC
review)  (each  of  the   deadlines   specified  in  clauses  (x)  and  (y),  an
"Effectiveness  Deadline"), (B) after a Registration Statement has been declared

                                      -3-
<PAGE>
effective  by the  SEC,  sales  cannot  be made  pursuant  to such  Registration
Statement  for any  reason  (including  without  limitation  by reason of a stop
order,  or the  Company's  failure to update the  Registration  Statement),  but
excluding  the  inability  of any  Investor to sell the  Registrable  Securities
covered  thereby  due to market  conditions  and except as excused  pursuant  to
subparagraph  (ii) below,  then the Company will make pro rata  payments to each
Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5%
of the  aggregate  amount  invested by such Investor in the Shares or Additional
Shares,  as  applicable,  for any  month  or pro rata  for any  portion  thereof
following  the  date by which  such  Registration  Statement  should  have  been
effective as described in (A) or (B) above (the  "Blackout  Period") ; provided,
however, that an Effectiveness Deadline may be extended for up to 30 days in the
event  that the  Company  is not  then  eligible  to use  Form  S-3 to  effect a
registration for resale of the Registrable  Securities..  Such payments shall be
in  partial  compensation  to  the  Investors,  and  shall  not  constitute  the
Investors' exclusive remedy for such events. The Blackout Period shall terminate
upon (x) the effectiveness of the applicable  Registration Statement in the case
of (A) above; and (y) the Registration Statement again being available for sales
by the  Investors in the case of (B) above.  The amounts  payable as  liquidated
damages  pursuant  to this  paragraph  shall be payable  in lawful  money of the
United States,  and amounts payable as liquidated  damages shall be paid monthly
within  five  (5)  business  days of the last day of each  month  following  the
commencement  of the  Blackout  Period  until the  termination  of the  Blackout
Period.

               (ii) For not more than fifteen (15)  consecutive  trading days or
for a total of not more than thirty (30)  trading  days in any twelve (12) month
period, the Company may delay the disclosure of material non-public  information
concerning  the Company,  by  terminating  or  suspending  effectiveness  of any
registration  contemplated  by this Section  containing  such  information,  the
disclosure  of which  at the  time is not,  in the  good  faith  opinion  of the
Company,  in the best interests of the Company (an "Allowed  Delay");  provided,
that the  Company  shall  promptly  (a) notify the  Investors  in writing of the
existence of (but in no event, without the prior written consent of an Investor,
shall the Company  disclose to such  Investor any of the facts or  circumstances
regarding) material non-public  information giving rise to an Allowed Delay, and
(b) advise the  Investors  in writing to cease all sales under the  Registration
Statement until the end of the Allowed Delay.

               (d)  UNDERWRITTEN   OFFERING.  If  any  offering  pursuant  to  a
Registration  Statement pursuant to Section 2(a) hereof involves an underwritten
offering,  the Company shall have the right to select an  investment  banker and
manager to administer the offering,  which investment banker or manager shall be
reasonably satisfactory to the Investors.

     3.  COMPANY  OBLIGATIONS.  The  Company  will use  commercially  reasonable
efforts to effect the  registration of the Registrable  Securities in accordance
with the terms hereof,  and pursuant  thereto the Company will, as expeditiously
as possible:

               (a)  use   commercially   reasonable   efforts   to  cause   such
Registration  Statement to become effective and to remain continuously effective
for a period that will  terminate  upon the earlier of (i) the date on which all
Registrable  Securities  covered by such Registration  Statement as amended from

                                      -4-
<PAGE>
time to time,  have  been  sold,  and (ii)  the  date on which  all  Registrable
Securities  covered by such Registration  Statement may be sold pursuant to Rule
144(k);

               (b)   prepare  and  file  with  the  SEC  such   amendments   and
post-effective  amendments to the  Registration  Statement and the Prospectus as
may be necessary to keep the  Registration  Statement  effective  for the period
specified in Section 3(a) and to comply with the  provisions of the 1933 Act and
the  1934  Act  with  respect  to the  distribution  of  all of the  Registrable
Securities covered thereby;

               (c)  provide  copies  to and  permit  counsel  designated  by the
Investors  to  review  each  Registration   Statement  and  all  amendments  and
supplements  thereto no fewer than five (5) days prior to their  filing with the
SEC and not file any document to which such counsel reasonably objects;

               (d) furnish to the Investors and their legal counsel (i) promptly
after the same is  prepared  and  publicly  distributed,  filed with the SEC, or
received  by the  Company  (but not later than two (2)  business  days after the
filing date,  receipt date or sending  date, as the case may be, one (1) copy of
any  Registration   Statement  and  any  amendment  thereto,   each  preliminary
prospectus and Prospectus  and each  amendment or supplement  thereto,  and each
letter  written  by or on behalf of the  Company  to the SEC or the staff of the
SEC,  and each item of  correspondence  from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment),  and (ii)  such  number  of  copies  of a  Prospectus,  including  a
preliminary  prospectus,  and all  amendments and  supplements  thereto and such
other  documents as each Investor may reasonably  request in order to facilitate
the  disposition of the Registrable  Securities  owned by such Investor that are
covered by the related Registration Statement;

               (e) in the event  the  Company  selects  an  underwriter  for the
offering,  the Company shall enter into and perform its  reasonable  obligations
under an underwriting agreement, in usual and customary form, including, without
limitation,  customary  indemnification and contribution  obligations,  with the
underwriter of such offering;

               (f)  if  required  by the  underwriter,  or if  any  Investor  is
described in the  Registration  Statement as an  underwriter,  the Company shall
furnish,  on the  effective  date of the  Registration  Statement  (except  with
respect to clause (i) below)  and on the date that  Registrable  Securities  are
delivered  to  an  underwriter,   if  any,  for  sale  in  connection  with  the
Registration Statement (including any Investor deemed to be an underwriter), (i)
an opinion, dated as of the closing date of any sales of Registrable Securities,
from  independent  legal counsel  representing  the Company for purposes of such
Registration  Statement, in form, scope and substance as is customarily given in
an underwritten public offering,  addressed to the underwriter and the Investors
and (ii) a letter,  dated such date,  from the Company's  independent  certified
public  accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed  to  the  underwriters   (including  any  Investor  deemed  to  be  an
underwriter);

                                      -5-
<PAGE>
               (g) make  effort to  prevent  the  issuance  of any stop order or
other  suspension  of  effectiveness  and,  if such order is issued,  obtain the
withdrawal of any such order at the earliest possible moment;

               (h) prior to any public offering of Registrable  Securities,  use
commercially  reasonable  efforts to register or qualify or  cooperate  with the
Investors and their counsel in connection with the registration or qualification
of such  Registrable  Securities for offer and sale under the securities or blue
sky laws of such  jurisdictions  requested  by the  Investor  and do any and all
other  commercially  reasonable acts or things  necessary or advisable to enable
the distribution in such jurisdictions of the Registrable  Securities covered by
the Registration Statement;

               (i) cause all  Registrable  Securities  covered by a Registration
Statement to be listed on each securities exchange, interdealer quotation system
or other  market on which  similar  securities  issued by the  Company  are then
listed;

               (j)  immediately  notify  the  Investors,  at  any  time  when  a
Prospectus relating to Registrable  Securities is required to be delivered under
the 1933 Act,  upon  discovery  that,  or upon the  happening  of any event as a
result of which, the Prospectus included in a Registration Statement, as then in
effect,  includes an untrue  statement of a material  fact or omits to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading in light of the circumstances  then existing,  and at the
request of any such  holder,  promptly  prepare  and  furnish  to such  holder a
reasonable  number  of  copies  of a  supplement  to or  an  amendment  of  such
Prospectus  as  may  be  necessary  so  that,  as  thereafter  delivered  to the
purchasers of such Registrable Securities,  such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein not misleading in
light of the circumstances then existing; and

               (k) otherwise use commercially  reasonable efforts to comply with
all applicable  rules and regulations of the SEC under the 1933 Act and the 1934
Act, take such other actions as may be  reasonably  necessary to facilitate  the
registration of the Registrable Securities hereunder;  and make available to its
security  holders,  as soon as  reasonably  practicable,  but not later than the
Availability Date (as defined below), an earnings statement covering a period of
at  least  twelve  (12)  months,  beginning  after  the  effective  date of each
Registration Statement, which earnings statement shall satisfy the provisions of
Section  11(a)  of the  1933  Act (for  the  purpose  of this  subsection  3(k),
"Availability  Date" means the 45th day  following  the end of the fourth fiscal
quarter that includes the effective date of such Registration Statement,  except
that, if such fourth fiscal quarter is the last quarter of the Company's  fiscal
year, "Availability Date" means the 90th day after the end of such fourth fiscal
quarter).

     4. DUE DILIGENCE  REVIEW;  INFORMATION.  The Company shall make  available,
during  normal  business  hours,  for  inspection  and review by the  Investors,
advisors  to  and  representatives  of the  Investors  (who  may  or may  not be
affiliated with the Investors and who are reasonably acceptable to the Company),
any  underwriter  participating  in any disposition of Common Stock on behalf of
the Investors pursuant to a Registration  Statement or amendments or supplements
thereto or any blue sky, NASD or other filing,  all financial and other records,
all SEC Filings (as defined in the Purchase  Agreement)  and other  filings with

                                      -6-
<PAGE>
the SEC, and all other corporate  documents and properties of the Company as may
be reasonably  necessary for the purpose of such review, and cause the Company's
officers,  directors and employees,  within a reasonable time period,  to supply
all  such  information  reasonably  requested  by  the  Investors  or  any  such
representative,  advisor or  underwriter  in connection  with such  Registration
Statement (including, without limitation, in response to all questions and other
inquiries  reasonably made or submitted by any of them),  prior to and from time
to time after the filing and effectiveness of the Registration Statement for the
sole purpose of enabling the  Investors and such  representatives,  advisors and
underwriters and their  respective  accountants and attorneys to conduct initial
and ongoing due  diligence  with respect to the Company and the accuracy of such
Registration Statement.

               The Company shall not disclose material nonpublic  information to
the Investors,  or to advisors to or  representatives  of the Investors,  unless
prior to disclosure of such information the Company  identifies such information
as being  material  nonpublic  information  and  provides  the  Investors,  such
advisors and representatives  with the opportunity to accept or refuse to accept
such material nonpublic information for review.

     5. OBLIGATIONS OF THE INVESTORS.

               (a) Each  Investor  shall  furnish in writing to the Company such
information  regarding  itself,  the  Registrable  Securities  held  by it,  the
intended method of disposition of the Registrable Securities held by it and such
other information, as shall be reasonably required to effect the registration of
such Registrable  Securities and shall execute such documents in connection with
such  registration  as the Company  may  reasonably  request.  At least ten (10)
business  days prior to the first  anticipated  filing date of any  Registration
Statement, the Company shall notify each Investor of the information the Company
requires  from  such  Investor  if  such  Investor  elects  to  have  any of the
Registrable Securities included in the Registration Statement. An Investor shall
provide such  information to the Company at least two (2) business days prior to
the  first  anticipated  filing  date of  such  Registration  Statement  if such
Investor  elects  to have  any of the  Registrable  Securities  included  in the
Registration Statement.

               (b)  Each  Investor,   by  its  acceptance  of  the   Registrable
Securities  agrees to cooperate with the Company as reasonably  requested by the
Company  in  connection  with  the  preparation  and  filing  of a  Registration
Statement hereunder, unless such Investor has notified the Company in writing of
its election to exclude all of its Registrable Securities from such Registration
Statement.

               (c) In the event the  Company,  at the request of the  Investors,
determines to engage the services of an  underwriter,  such  Investor  agrees to
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution  obligations,  with the managing  underwriter  of such offering and
take such other  actions as are  reasonably  required  in order to  expedite  or
facilitate the dispositions of the Registrable Securities.

                                      -7-
<PAGE>
               (d) Each  Investor  agrees that,  upon receipt of any notice from
the Company of the happening of any event rendering a Registration  Statement no
longer  effective,  such Investor will  immediately  discontinue  disposition of
Registrable  Securities  pursuant to the  Registration  Statement  covering such
Registrable  Securities,  until  the  Investor's  receipt  of the  copies of the
supplemented  or amended  prospectus  filed with the SEC and declared  effective
and, if so directed by the Company,  the Investor  shall  deliver to the Company
(at the  expense of the  Company)  or  destroy  (and  deliver  to the  Company a
certificate  of  destruction)  all copies in the  Investor's  possession  of the
Prospectus covering the Registrable Securities current at the time of receipt of
such notice.

               (e) No Investor may  participate in any third party  underwritten
registration  hereunder unless it (i) agrees to sell the Registrable  Securities
on the basis provided in any  underwriting  arrangements  in usual and customary
form   entered   into  by  the  Company,   (ii)   completes   and  executes  all
questionnaires,  powers of attorney,  indemnities,  underwriting  agreements and
other  documents  reasonably  required  under  the  terms  of such  underwriting
arrangements,  and (iii)  agrees to pay its pro rata  share of all  underwriting
discounts and commissions.  Notwithstanding the foregoing,  no Investor shall be
required to make any representations to such underwriter,  other than those with
respect to itself and the  Registrable  Securities  owned by it,  including  its
right to sell the Registrable  Securities,  and any  indemnification in favor of
the  underwriter by the Investors  shall be several and not joint and limited in
the case of any  Investor,  to the proceeds  received by such  Investor from the
sale of its Registrable  Securities.  The scope of any such  indemnification  in
favor of an  underwriter  shall be limited to the same  extent as the  indemnity
provided in Section 6(b) hereof.

     6. INDEMNIFICATION.

               (a)  INDEMNIFICATION  BY THE COMPANY.  The Company will indemnify
and hold  harmless  each  Investor  and their  respective  officers,  directors,
members, employees and agents, successors and assigns, and each other person, if
any, who controls such Investor within the meaning of the 1933 Act,  against any
losses, claims, damages or liabilities,  joint or several, to which such seller,
officer,  director,  member, or controlling  person may become subject under the
1933 Act or otherwise,  insofar as such losses,  claims,  damages or liabilities
(or actions in respect  thereof)  arise out of or are based upon: (i) any untrue
statement or alleged  untrue  statement of any  material  fact  contained in any
Registration Statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement  thereof;  (ii) any blue sky application
or other document executed by the Company specifically for that purpose or based
upon written  information  furnished by the Company  filed in any state or other
jurisdiction in order to qualify any or all of the Registrable  Securities under
the  securities  laws thereof  (any such  application,  document or  information
herein called a "Blue Sky Application");  (iii) the omission or alleged omission
to state therein a material  fact required to be stated  therein or necessary to
make the statements therein not misleading; (iv) any violation by the Company or
its agents of any rule or regulation  promulgated  under the 1933 Act applicable
to the Company or its agents and relating to action or inaction  required of the
Company in connection with such registration;  or (v) any failure to register or
qualify the  Registrable  Securities  included in any such  Registration  in any
state where the Company or its agents has affirmatively  undertaken or agreed in
writing that the Company will undertake such registration or qualification on an
Investor's  behalf (the  undertaking  of any  underwriter  chosen by the Company

                                      -8-
<PAGE>
being attributed to the Company) and will reimburse such Investor, and each such
officer,  director or member and each such  controlling  person for any legal or
other expenses  reasonably  incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED,  HOWEVER,
that the  Company  will not be liable in any such case if and to the extent that
any such  loss,  claim,  damage or  liability  arises out of or is based upon an
untrue  statement or alleged untrue statement or omission or alleged omission so
made in  conformity  with  information  furnished  by such  Investor or any such
controlling  person  in  writing  specifically  for  use  in  such  Registration
Statement or Prospectus.

               (b)  INDEMNIFICATION  BY THE  INVESTORS.  In connection  with any
registration pursuant to the terms of this Agreement, each Investor will furnish
to the Company in writing such  information as the Company  reasonably  requests
concerning  the holders of  Registrable  Securities  or the  proposed  manner of
distribution for use in connection with any Registration Statement or Prospectus
and agrees,  severally but not jointly,  to indemnify and hold harmless,  to the
fullest  extent  permitted  by  law,  the  Company,  its  directors,   officers,
employees,  stockholders  and each person who controls  the Company  (within the
meaning of the 1933 Act) against any losses,  claims,  damages,  liabilities and
expense (including reasonable attorney fees) resulting from any untrue statement
of a material  fact or any omission of a material  fact required to be stated in
the Registration  Statement or Prospectus or preliminary prospectus or amendment
or  supplement   thereto  or  necessary  to  make  the  statements  therein  not
misleading,  to the extent, but only to the extent that such untrue statement or
omission is contained in any  information  furnished in writing by such Investor
to the Company  specifically  for  inclusion in such  Registration  Statement or
Prospectus  or amendment or  supplement  thereto and that such  information  was
substantially  relied upon by the  Company in  preparation  of the  Registration
Statement or  Prospectus or any  amendment or  supplement  thereto.  In no event
shall the  liability of an Investor be greater in amount than the dollar  amount
of the proceeds  (net of all expense paid by such Investor and the amount of any
damages such holder has otherwise  been required to pay by reason of such untrue
statement  or  omission)  received  by  such  Investor  upon  the  sale  of  the
Registrable  Securities  included in the  Registration  Statement giving rise to
such indemnification obligation.

               (c) CONDUCT OF INDEMNIFICATION  PROCEEDINGS.  Any person entitled
to  indemnification  hereunder shall (i) give prompt notice to the  indemnifying
party of any  claim  with  respect  to which it seeks  indemnification  and (ii)
permit such indemnifying  party to assume the defense of such claim with counsel
reasonably  satisfactory  to the  indemnified  party;  PROVIDED  that any person
entitled to  indemnification  hereunder  shall have the right to employ separate
counsel  and to  participate  in the  defense  of such  claim,  but the fees and
expenses of such counsel  shall be at the expense of such person  unless (a) the
indemnifying  party  has  agreed  to pay  such  fees  or  expenses,  or (b)  the
indemnifying  party  shall have  failed to assume the  defense of such claim and
employ counsel  reasonably  satisfactory to such person or (c) in the reasonable
judgment  of any such  person,  based  upon  written  advice of its  counsel,  a
conflict of interest exists between such person and the indemnifying  party with
respect to such claims (in which case, if the person  notifies the  indemnifying
party in  writing  that such  person  elects to employ  separate  counsel at the
expense of the indemnifying  party,  the  indemnifying  party shall not have the
right to  assume  the  defense  of such  claim on behalf  of such  person);  and
PROVIDED,  FURTHER,  that the failure of any indemnified party to give notice as

                                      -9-
<PAGE>
provided  herein  shall not relieve the  indemnifying  party of its  obligations
hereunder,  except  to the  extent  that  such  failure  to  give  notice  shall
materially  adversely affect the  indemnifying  party in the defense of any such
claim or litigation.  It is understood that the indemnifying party shall not, in
connection with any proceeding in the same  jurisdiction,  be liable for fees or
expenses of more than one  separate  firm of  attorneys at any time for all such
indemnified  parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that  does not  include  as an  unconditional  term  thereof  the  giving by the
claimant or plaintiff to such indemnified  party of a release from all liability
in respect of such claim or litigation.

               (d) CONTRIBUTION.  If for any reason the indemnification provided
for in the preceding  paragraphs  (a) and (b) is  unavailable  to an indemnified
party or  insufficient  to hold it harmless,  other than as expressly  specified
therein,  then the  indemnifying  party shall  contribute  to the amount paid or
payable  by the  indemnified  party as a result of such loss,  claim,  damage or
liability in such  proportion as is appropriate to reflect the relative fault of
the indemnified party and the indemnifying  party, as well as any other relevant
equitable  considerations.  No  person  guilty of  fraudulent  misrepresentation
within  the  meaning  of  Section  11(f) of the 1933 Act  shall be  entitled  to
contribution from any person not guilty of such fraudulent misrepresentation. In
no event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of all expenses
paid by such holder and the amount of any damages such holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission) received by it upon the sale of the Registrable  Securities
giving rise to such contribution obligation.

     7. MISCELLANEOUS.

               (a) AMENDMENTS AND WAIVERS. This Agreement may be amended only by
a writing signed by the Company and the Required Investors. The Company may take
any action herein  prohibited,  or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written  consent to
such amendment, action or omission to act, of the Required Investors.

               (b) NOTICES. All notices and other communications provided for or
permitted  hereunder  shall be made as set forth in Section 9.4 of the  Purchase
Agreement.

               (c)  ASSIGNMENTS  AND TRANSFERS BY INVESTORS.  The  provisions of
this  Agreement  shall be binding upon and inure to the benefit of the Investors
and their respective successors and assigns. An Investor may transfer or assign,
in  whole  or from  time  to time in  part,  to one or more  persons  it  rights
hereunder in connection with the transfer of shares of Registrable Securities by
such Investor to such person, provided that such Investor complies with all laws
applicable thereto, the transferee agrees in writing to be bound by the terms of
this Agreement and the Investor provides written notice of assignment and of the
transferee's notice information to the Company promptly after such assignment is
effected.

                                      -10-
<PAGE>
               (d) ASSIGNMENTS AND TRANSFERS BY THE COMPANY.  This Agreement may
not be assigned by the Company without the prior written consent of the Required
Investors.

               (e) BENEFITS OF THE AGREEMENT. Subject to Section 7(d), the terms
and  conditions of this  Agreement  shall inure to the benefit of and be binding
upon the respective permitted successors and assigns of the parties.  Nothing in
this Agreement,  express or implied,  is intended to confer upon any party other
than the parties hereto or their  respective  successors and assigns any rights,
remedies,  obligations,  or  liabilities  under or by reason of this  Agreement,
except as expressly provided in this Agreement.

               (f) COUNTERPARTS; FAXES. 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 also
be executed via facsimile, which shall be deemed an original.

               (g) TITLES AND  SUBTITLES.  The titles and subtitles used in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

               (h)  SEVERABILITY.  Any  provision  of  this  Agreement  that  is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating the remaining  provisions  hereof but shall be interpreted as if it
were  written  so as to be  enforceable  to  the  maximum  extent  permitted  by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall  not  invalidate  or  render  unenforceable  such  provision  in any other
jurisdiction.  To the extent  permitted by  applicable  law, the parties  hereby
waive any provision of law which  renders any  provisions  hereof  prohibited or
unenforceable in any respect.

               (i) FURTHER ASSURANCES. The parties shall execute and deliver all
such further  instruments  and  documents and take all such other actions as may
reasonably be required to carry out the transactions  contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

               (j) ENTIRE  AGREEMENT.  This Agreement is intended by the parties
as a final  expression  of their  agreement  and  intended to be a complete  and
exclusive  statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained  herein.  This Agreement  supersedes all
prior  agreements  and  understandings  between the parties with respect to such
subject matter.

               (k)  APPLICABLE  LAW.  This  Agreement  shall be governed by, and
construed in accordance  with, the laws of the State of Delaware  without regard
to principles of conflicts of law.

                                      -11-
<PAGE>
     IN WITNESS  WHEREOF,  the parties have  executed  this  Agreement or caused
their duly  authorized  officers to execute this  Agreement as of the date first
above written.

The Company:                            ARTISOFT, INC.

                                        By: /s/ Steven G. Manson
                                            ------------------------------------
                                        Name:  Steven G. Manson
                                        Title: President and CEO

The Investors:                          SPECIAL SITUATIONS FUND III, L.P.

                                        By: /s/ David Greenhouse
                                            ------------------------------------
                                        Name: David Greenhouse
                                        Title: General Partner

                                        SPECIAL SITUATIONS CAYMAN FUND, L.P.

                                        By: /s/ David Greenhouse
                                            ------------------------------------
                                        Name: David Greenhouse
                                        Title: General Partner

                                        SPECIAL SITUATIONS PRIVATE EQUITY
                                        FUND, L.P.

                                        By: /s/ David Greenhouse
                                            ------------------------------------
                                        Name: David Greenhouse
                                        Title: General Partner

                                        SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.

                                        By: /s/ David Greenhouse
                                            ------------------------------------
                                        Name: David Greenhouse
                                        Title: General Partner

                                      -12-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]