WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is entered into as of the
18th day of October, 2001, by and between WIZZARD SOFTWARE CORPORATION, a
Colorado corporation (the "Company"), and INTERWEST TRANSFER CO., a securities
transfer agency incorporated under the laws of the State of Utah, as warrant
agent (the "Warrant Agent").
Recitals
A. The Company is conducting a private placement of Warrants as
outlined in Exhibit A attached hereto and incorporated herein by reference
entitling the holder to purchase, during the Exercise Period as defined in
Exhibit A for the price outlined in Exhibit A, one share of Common Stock (the
"Warrant Price"). This Agreement governs both the Warrants, including the
issuance, exercise, and redemption of such Warrants, and the rights and
obligations of the holders thereof. The shares of Common Stock issuable on
exercise of the Warrants are collectively referred to herein as the "Warrant
Shares."
B. The Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to act in connection with the
issuance, division, transfer, exchange, and exercise of the Warrants.
Agreement
In consideration of the foregoing and for the purpose of defining
the terms and provisions of the Warrants and the respective rights and
obligations thereunder of the Company and the registered and record owners of
the Warrants (the "Holders"), the Company and the Warrant Agent hereby agree
as follows:
1. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
2. Transferability and Form of Warrants.
2.1 Registration. The Warrants shall be designated by
class and numbered and shall be registered in registers as they
are issued. The Company and the Warrant Agent shall be entitled
to treat the Holder of any Warrant as the owner in fact thereof
for all purposes and shall not be bound to recognize any equitable
or other claim to or interest in such Warrant on the part of any
other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made
with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or
transfer, or with knowledge of such facts that the Warrant Agent's
participation therein amounts to bad faith.
2.2 Transfer. The Warrants shall be non-transferable
without the prior written consent of the Company.
2.3 Form of Warrants. The Warrants, including the form of
election to purchase Warrant Shares, shall be represented by
certificates in substantially the form set forth as Exhibits "B,"
"C," "D" and "E" which are attached hereto and incorporated herein
by reference. The price per Warrant Share and the number of
Warrant Shares issuable on exercise of Warrants are subject to
adjustment on the occurrence of certain events, all as hereinafter
provided. The Warrants shall be executed on behalf of the Company
by the manual or facsimile signature of the present or any future
president or vice-president of the Company, under its corporate
seal, affixed or in facsimile, attested by the manual or facsimile
signature of the present or any future secretary or assistant
secretary of the Company. The Warrants shall be dated as of the
date of countersignature thereof by the Warrant Agent, either on
initial issuance or on division, exchange, substitution or
transfer.
3. Countersignature of Warrants. The Warrants shall be
countersigned by the Warrant Agent (or any successor to the Warrant Agent then
acting as warrant agent under this Agreement) and shall not be valid for any
purpose unless so countersigned. The Warrants may be countersigned by the
Warrant Agent (or by its successor as warrant agent) and may be delivered by
the Warrant Agent, notwithstanding that the persons whose manual or facsimile
signatures appearing thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature, issuance or
delivery.
4. Exchange of Warrants. Any Warrant may be exchanged for
another Warrant of the same class entitling the holder thereof to purchase a
like aggregate number of Warrant Shares as the Warrant surrendered then
entitles the holder to purchase. Any Holder of a Warrant desiring to exchange
Warrants shall make such request in writing delivered to the Warrant Agent,
and shall surrender, properly endorsed, the Warrant to be so exchanged.
Thereupon, the Warrant Agent shall countersign and deliver to the person
entitled thereto a Warrant of the same class as requested. The Warrant
Agent's duty to transfer any Warrants shall be governed by the applicable
Uniform Commercial Code.
5. Term of Warrants; Exercise of Warrants.
5.1 Term of Warrants. Each Holder of Warrants shall have
the right, which may be exercised no later than the expiration
date set forth in Exhibit A (the "Warrant Exercise Period"), to
purchase from the Company one fully paid and non-assessable
Warrant Share for each Warrant held at the warrant price as set
forth in Sections 9 and 10 hereof (the "Warrant Price"), subject
to the conditions set forth in this Agreement. If the Warrant is
not exercised during the Warrant Exercise Period, it shall expire.
The Warrant Shares shall be issuable on exercise of the
Warrants on surrender to the Company at the principal office of
the Warrant Agent in Salt Lake City, Utah, with the form of
election to purchase attached thereto duly completed and signed,
and on payment to the Warrant Agent for the account of the Company
of the Warrant Price for the number of Warrant Shares in respect
of which such Warrants are then exercised. Payment of the
applicable Warrant Price shall be made in cash or by cashier's
check or by collection of checks or drafts. Subject to
Subsections 5.1 and 5.2 of this Section, on payment of the
applicable Warrant Price as aforesaid, the Company shall issue and
cause to be delivered with all reasonable dispatch to or on the
written order of the Holder and in such name or names as the
Holder may designate, a certificate or certificates for the number
of full Warrant Shares so purchased on the exercise of such
Warrants. No fractional Warrant Shares shall be issuable on such
surrender. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant
Shares as of the date of the surrender of such Warrants and
payment of the applicable Warrant Price, as aforesaid; provided,
however, that if, at the date of surrender of such Warrants and
payment of such Warrant Price, the transfer books for the Warrant
Shares on the exercise of such Warrants shall be closed, the
certificates for the Warrant Shares in respect of which such
Warrants are then exercised shall be issuable as of the date on
which such books shall next be opened (whether before or after
expiration of the exercise period) and until such date the Company
shall be under no duty to deliver any certificate for such Warrant
Shares; provided further, however, that the transfer books of
record, unless otherwise required by law, shall not be closed at
any one time for a period longer than 60 days. The right of
purchase represented by the Warrants shall be exercisable, at the
election of the Holder thereof, either in full or from time to
time in part and, in the event that any Warrant is exercised in
respect of less than all of the Warrant Shares specified therein
at any time prior to the date of expiration of the applicable
Warrant class, a new Warrant or Warrants of the same class will be
issued for the remaining number of Warrant Shares, and the Warrant
Agent is hereby irrevocably authorized to countersign and to
deliver the required new Warrants pursuant to the provisions of
this Section and of Section 3 hereof. The Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with
Warrants of the applicable class, duly executed on behalf of the
Company for such purpose.
5.2 Exercise of Warrants. The Warrants may not be
exercised by the Holders thereof in the absence of an exemption
from registration under the Securities Act of 1933, as amended (
the "Securities Act") and applicable state securities laws or an
effective registration statement pertaining to the Warrant Shares.
The Warrant Shares shall specifically have "piggy back"
registration rights and shall be included in the next SB-2
Registration Statement to be filed by the Company with the
Securities and Exchange Commission. Notwithstanding the
foregoing, however, if any underwriter participating in any
registered public offering determines that marketing factors
require a limitation on the number of shares to be underwritten,
the underwriter may exclude from such registration and
underwriting some of the Warrant Shares which would otherwise be
underwritten. In such an event, the Company shall advise all
Holders of the registration and the number of Warrant Shares that
are entitled to be included in the registration and underwriting
shall be allocated pro rata among each Holder in accordance with
the proportion that the number of Warrant Shares he, she or it
holds bears to the total number of authorized but unissued Warrant
Shares at that time. The Company shall bear all registration
expenses in connection with any registration, qualification and
compliance by the Company.
6. Payment of Taxes. The Company will pay all documentary
stamp taxes, if any, attributable to the initial issuance of Warrant Shares;
provided, however, that the Company shall not be required to pay any tax or
taxes which may be payable in respect to the issuance or delivery of any
Warrants or certificates for Warrant Shares involving a transfer of record or
beneficial ownership.
7. Mutilated or Missing Warrants. In case any certificate
representing any Warrant is mutilated, lost, stolen or destroyed, the Company
may at its discretion issue and the Warrant Agent shall countersign and
deliver in exchange and substitution for and on cancellation of the mutilated
Warrant, or in lieu of and substitution for the Warrant lost, stolen or
destroyed, a new Warrant of the same class and representing an equivalent
right or interest, but only on receipt of evidence satisfactory to the Company
and the Warrant Agent of such loss, theft or destruction of such Warrant and
indemnity, if requested, also satisfactory to them. Applicants for such
substitute Warrants shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company or the Warrant Agent may
prescribe.
8. Reservation of Warrant Shares. There have been reserved,
and the Company shall at all times keep reserved, out of the authorized and
unissued shares of Common Stock, a number of shares sufficient to provide for
the exercise of the rights of purchase represented by the outstanding
Warrants, assuming exercise of all Warrants. The transfer agent for the
Warrant Shares and every subsequent transfer agent for any Warrant Shares
issuable on the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized and unissued Warrant Shares as shall be requisite for such purpose.
The Company will keep a copy of this Agreement on file with the transfer agent
for the Warrant Shares and with every subsequent transfer agent for any
Warrant Shares of the Company's capital stock issuable on the exercise of the
rights of purchase represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such transfer
agent stock certificates required to honor outstanding Warrants on exercise
thereof in accordance with the terms of this Agreement. The Company will
supply such transfer agent with duly executed stock certificates for such
purpose and will provide or otherwise make available any cash which may be
payable as provided in Section 11 hereof. All Warrants surrendered in the
exercise of the rights thereby evidenced shall be canceled by the Warrant
Agent and shall be maintained by the Warrant Agent, as the Company's property.
Promptly after the date of expiration of the Warrants, the Warrant Agent shall
certify to the Company the total aggregate amount of Warrants then
outstanding, and thereafter no Warrant Shares shall be subject to reservation
in respect of such Warrants.
9. Warrant Price. The Warrant Price shall be as set forth in
Exhibit A. The Warrant Price shall be subject to adjustment pursuant to
Section 10 hereof.
10. Adjustment of Warrant Prices and Number of Warrant Shares.
10.1 Adjustments. The number of Warrant Shares issuable on
the exercise of each Warrant and the applicable Warrant Price
shall be subject to adjustment as follows:
(a)(1) In case the Company shall (i) pay a
dividend in Common Stock or make a distribution in Common
Stock; (ii) subdivide its outstanding Common Stock; (iii)
combine its outstanding Common Stock into a smaller number
of shares; or (iv) issue by reclassification of its Common
Stock other securities of the Company, the number of Warrant
Shares issuable on exercise of each Warrant immediately
prior thereto shall be adjusted so that the Holder of each
Warrant shall be entitled to receive on exercise the kind
and number of Warrant Shares of the Company which he would
have owned or been entitled to receive after the happening
of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event
or any record date with respect thereto.
(2) Any adjustment made pursuant to this paragraph
(a) shall become effective immediately after the effective
date of such event retroactive to the record date for such
event.
(b) No adjustment in the number of Warrant Shares
issuable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one
percent in the number of Warrant Shares issuable on the
exercise of each Warrant; provided, however, that any
adjustments which by reason of this paragraph (b) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(c) Except for adjustments made pursuant to
paragraph (a)(2) hereof, whenever the number of Warrant
Shares issuable on the exercise of each Warrant is adjusted,
as herein provided, the applicable Warrant Price payable on
exercise of each Warrant shall be adjusted by multiplying
such Warrant Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of
Warrant Shares issuable on the exercise of each Warrant
immediately prior to such adjustment and the denominator of
which shall be the number of Warrant Shares so issuable
immediately thereafter.
(d) Whenever the number of Warrant Shares issuable
on the exercise of each Warrant or the applicable Warrant
Price of such Warrant Shares issuable are adjusted, as
herein provided, the Company shall cause the Warrant Agent
to promptly mail by first class mail, postage prepaid, to
each Holder of Warrants notice of such adjustment or
adjustments and shall deliver to the Warrant Agent a
certificate of a firm of independent accountants selected by
the Board of Directors of the Company (which may be the
regular accountants employed by the Company) setting forth
the number of Warrant Shares issuable on the exercise of
each Warrant and the Warrant Price of such Warrant Shares
issuable after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made.
Such certificate, in the absence of manifest error, shall be
conclusive evidence of the correctness of adjustment. The
Warrant Agent shall be under no duty or responsibility with
respect to any such certificate, except to exhibit the same,
from time to time, to any Holder of Warrants desiring an
inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or
responsibility to any Holder of Warrants to determine
whether any facts exist which may require any adjustment of
the Warrant Prices of the number of Warrant Shares issuable
or other securities purchasable or with respect to the
nature or extent of any such adjustment when made, or with
respect to the method employed in making such adjustment.
(e) For purposes of this Subsection 10.1, the term
"Common Stock" shall mean (i) the class of stock designated
as the common stock of the Company at the date of this
Agreement, or (ii) any other class of stock resulting from
successive changes or reclassifications of such shares
consisting solely of changes in par value, or from par value
to no par value, or from no par value to par value. In the
event that at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the Holders of Warrants
shall become entitled to purchase any securities of the
Company other than Warrant Shares, thereafter the number of
such other securities so purchasable on exercise of each
Warrant and the Warrant Price of such securities shall be
subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in paragraphs (a)
through (d), inclusive, above, and the provisions of Section
5 and Subsections 10.2 through 10.5, inclusive, with respect
to the Warrant Shares shall apply on like terms to any such
other securities.
10.2 No Adjustments for Dividends. Except as provided in
Subsection 10.1, no adjustment in respect of any dividends shall
be made during the term of the Warrants or on the exercise of the
Warrants.
10.3 No Adjustment in Certain Cases. No adjustments shall
be made:
(a) In connection with the issuance of any Warrant
Shares on the exercise of the Warrants;
(b) In connection with the issuance or conversion of
shares of preferred stock, if any;
(c) In connection with the issuance of additional
Warrant Shares or other securities on account of any
anti-dilution provisions contained in or relating to the
Warrants;
(d) In connection with the purchase or other
acquisition by the Company of any shares of Common Stock,
preferred stock, evidences of its indebtedness or assets, or
rights, options, warrants, or convertible securities
containing the right to subscribe for or purchase Common
Stock; or
(e) In connection with the sale or exchange by the
Company of any preferred stock, evidences of its
indebtedness or assets, or rights, options, warrants, or
convertible securities containing the right to subscribe for
or purchase Common Stock.
10.4 Preservation of Purchase Rights on Reclassification,
Consolidation, Etc. In case of any consolidation of the Company
with or merger of the Company into another corporation or in case
of any sale or conveyance to another corporation of the property
of the Company as an entirety or substantially as an entirety, the
Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrant Agent an agreement that
each Holder of a Warrant shall have the right thereafter on
payment of the Warrant Price in effect immediately prior to such
action to purchase on exercise of each Warrant the kind and amount
of Warrant Shares and other securities and property which he would
have owned or would have been entitled to receive after the
happening of such consolidation, merger, sale, or conveyance had
such Warrant been exercised immediately prior to such action. The
Company shall mail by first class mail, postage prepaid, to the
Holder of each Warrant notice of the execution of any such
agreement. Such agreement shall provide for adjustments, which
shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 10. The provisions of
this Subsection 10.4 shall similarly apply to successive
consolidations, mergers, sales or conveyances. The Warrant Agent
shall be under no duty or responsibility to determine the
correctness of any provisions contained in any such agreement
relating either to the kind or amount of Warrant Shares of stock
or other securities or property receivable on exercise of Warrants
or with respect to the method employed and provided therein for
any adjustments.
10.5 Statement on Warrants. Irrespective of any
adjustments in the applicable Warrant Price or the number or kind
of Warrant Shares purchasable on the exercise of the Warrants,
Warrants theretofore or hereafter issued may continue to express
the same price and number and kind of Warrant Shares as are stated
in the Warrants initially issuable pursuant to this Agreement.
11. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable on the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares represented by the Warrants so presented. If any fraction of a
share would, except for the provisions of this Section 11, be issuable on the
exercise of any Warrant (or specified portion thereof), the Company shall pay
an amount in cash equal to the current value of such fraction computed on the
basis of (i) the highest closing bid price of the Common Stock, as reported by
NASDAQ on the last business day prior to the date of exercise; (ii) the last
reported sale price of the Common Stock on the national stock exchange on
which the Common Stock is listed on the last business day prior to the date of
exercise on which such a sale shall have been effected, if the Common Stock is
listed on such an exchange, or (iii) if not quoted on NASDAQ or listed on an
exchange as reported on the Electronic Bulletin Board maintained by the NASD
or, if not on the Electronic Bulletin Board, any other reliable medium of
quotation.
12. No Rights as Shareholders; Notices to Warrant Holders.
Nothing contained in this Agreement or in the Warrants shall be construed as
conferring on the Holders or their transferees the right to vote or to receive
dividends or to consent to or to receive notice as shareholders in respect of
the meeting of shareholders for the election of directors of the Company or
any other matter, or any rights whatsoever as shareholders of the Company.
13. Disposition of Proceeds on Exercise of Warrants; Inspection
of Warrant Agreement. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
moneys collected by the Warrant Agent for the purchase of the Company's
Warrant Shares through the exercise of such Warrants. The Warrant Agent shall
keep copies of this Agreement and any notices given or received hereunder
available for inspection by Holders of Warrants during normal business hours
at its principal office in Salt Lake City, Utah. The Company shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement
as the Warrant Agent may request.
14. Merger or Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of
any paper or any further act on the part of any of the parties hereto;
provided, that such corporation would be eligible for appointment as a
successor Warrant Agent under the provisions of Section 16 hereof. In case at
the time such successor to the Warrant Agent shall succeed to the agency
created by this Agreement, any of the Warrants shall have been countersigned
but not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrants so
countersigned, and in case at that time any of the Warrants shall not have
been countersigned, any successor to the Warrant Agent may countersign such
Warrants either in the name of the predecessor Warrant Agent or in the name of
the successor Warrant Agent, and in all such cases, the Warrant shall have the
full force provided in the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed
and at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior
name and deliver Warrants so countersigned, and in case at that time any of
the Warrants shall not have been countersigned, the Warrant Agent may
countersign such Warrants either in its prior name or in its changed name, and
in all such cases such Warrants shall have the full force provided in the
Warrants and in this Agreement.
15. Concerning the Warrant Agent. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement on the following terms
and conditions, by all of which the Company and the Holders of Warrants, by
their acceptance thereof shall be bound:
15.1 The statements contained herein and in the
Warrants shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any
of the same except such as describe the Warrant Agent or action
taken by it. The Warrant Agent assumes no responsibility with
respect to the distribution of the Warrants except as herein
otherwise provided.
15.2 The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrants to be complied with
by the Company.
15.3 The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys, agents or employees
and the Warrant Agent shall not be answerable or accountable for
any act of any such attorneys, agents or employees or for any loss
to the Company resulting from such act, except for the negligence
or bad faith of such attorneys, agents or employees; provided,
reasonable care shall have been exercised in the selecting and
continued employment thereof.
15.4 The Warrant Agent may consult at any time with legal
counsel satisfactory to it (who may be counsel for the Company),
and the Warrant Agent shall incur no liability or responsibility
to the Company or to any Holder of any Warrant in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel.
15.5 Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the president or a
vice-president or the treasurer or the secretary of the Company
and delivered to the Warrant Agent, and such certificate shall be
full authorization to the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance on such certificate.
15.6 The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of its duties under the terms of this Agreement, to
reimburse the Warrant Agent for all expenses, taxes and
governmental charges, and other charges of any kind and nature
incurred by the Warrant Agent in the execution of its duties under
the terms of this Agreement and to indemnify the Warrant Agent and
save it harmless against any and all liabilities, including
judgments, costs and counsel fees, for anything done or omitted by
the Warrant Agent in the execution of its duties under the terms
of this Agreement, except as a result of the Warrant Agent's
negligence or bad faith.
15.7 The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one
or more Holders of Warrants shall furnish the Warrant Agent with
reasonable security and indemnity for any costs and expenses which
may be incurred, but this provision shall not affect the power of
the Warrant Agent to take such action as the Warrant Agent may
consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under
any of the Warrants may be enforced by the Warrant Agent without
the possession of any of the Warrants or the production thereof at
any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall
be brought in its name as Warrant Agent, and any recovery of
judgment shall be for the ratable benefit of the Holders of the
Warrants, as their respective rights or interests may appear.
15.8 The Warrant Agent and any stockholder, director,
officer or employee of the Warrant Agent may buy, sell or deal in
any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may
be interested, or contract with or lend money to or otherwise act
as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other
legal entity.
15.9 The Warrant Agent shall act hereunder solely as agent,
and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which
it may do or refrain from doing in connection with this Agreement,
except for its own negligence or bad faith.
15.10 The Warrant Agent will not incur any liability or
responsibility to the Company or to any Holder of any Warrant for
any action taken in reliance on any notice, resolution, waiver,
consent, order, certificate or other paper, document or instrument
reasonably believed by it to be genuine and to have been signed,
sent, or presented by the proper party or parties.
15.11 The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by
the Warrant Agent) or in respect of the validity or execution of
any Warrant (except its countersignature thereof), nor shall the
Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any Warrant Shares (or other stock) to be issued pursuant to
this Agreement or any Warrant or as to whether any Warrant Shares
(or other stock) will when issued be validly issued, fully paid,
and non-assessable or as to the Warrant Price, or the number or
kind or amount of Warrant Shares or other securities or other
property issuable on exercise of any Warrant.
15.12 The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the chairman of the board or the president or a
vice-president or the secretary or the treasurer of the Company,
and to apply to such officers for advice or instructions in
connection with its duties, and shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
16. Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company 30
days' notice in writing. The Warrant Agent may be removed by like notice to
the Warrant Agent from the Company. If the Warrant Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent. If the Company shall fail to make
such appointment within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the Holder of a Warrant (who shall with such
notice submit his Warrant for inspection by the Company), then the Holder of
any Warrant may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Any successor warrant agent,
whether appointed by the Company or such a court, shall be a bank, trust
company or securities transfer agency, in good standing, incorporated under
the laws of the States of Colorado, Utah or any other jurisdiction within the
United States of America. After appointment, the successor warrant agent
shall be vested with the same powers, rights, duties, and responsibilities as
if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor
warrant agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act, or deed necessary for the
purpose. Failure to file any notice provided for in this Section 16, however,
or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the
successor warrant agent, as the case may be. In the event of such resignation
or removal, the successor warrant agent shall mail, first class, to each
Holder, written notice of such removal or resignation and the name and address
of such successor warrant agent.
17. Identity of Transfer Agent. Forthwith on the appointment of
any subsequent Transfer Agent for the Company's Warrant Shares, or any other
shares of the Company's capital stock issuable on the exercise of the rights
of purchase represented by the Warrants, the Company will file with the
Warrant Agent a statement setting forth the name and address of such Transfer
Agent.
18. Notices. Any notice pursuant to this Agreement by the
Company or by the Holder of any Warrant to the Warrant Agent, or by the
Warrant Agent or by the Holder of any Warrant to the Company, shall be in
writing and shall be deemed to have been duly given if delivered or mailed
certified mail, return receipt requested (a) if to the Company, to Wizzard
Software Corporation, 000 Xxxx Xxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, and (b) if
to the Warrant Agent, to Interwest Transfer Co., 0000 Xxxx Xxxxxx-Xxxxxxxx
Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000. Each party hereto may from time to time
change the address to which notices to it are to be delivered or mailed
hereunder by notice in writing to the other party.
Any notice mailed pursuant to this Agreement by the Company or the
Warrant Agent to the Holders of Warrants shall be in writing and shall be
deemed to have been duly given if mailed, postage prepaid, to such Holders at
their respective addresses as reflected on the books of the Warrant Agent.
19. Supplements and Amendments. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement, without the
approval of any Holders of Warrants, in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not be
inconsistent with the provision of the Warrants and which shall not adversely
affect the interests of the Holders of the Warrants. In this regard, but not
by way of limitation, establishing an earlier date of exercise without a
change in the expiration date of the Warrants set forth in Section 5 or
extending the period for exercise without a change in the date on which the
Warrants are first exercisable set forth in Section 5 shall not be deemed to
adversely affect the interests of the Holders. As such, the board of
directors of the Company and the Warrant Agent may at their discretion extend
the exercise periods for the Warrants.
20. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
21. Merger or Consolidation of the Company. The Company will
not merge or consolidate with or into any other corporation unless the
corporation resulting from such merger or consolidation (if not the Company)
shall expressly assume, by supplemental agreement satisfactory in form to the
Warrant Agent and executed and delivered to the Warrant Agent, the due and
punctual performance and observance of each and every covenant and condition
of this Agreement to be performed and observed by the Company.
22. Applicable Law. This Agreement and each Warrant issued
hereunder shall be deemed to be a contract made under the laws of the state of
Utah and for all purposes shall be construed in accordance with the laws of
said state.
23. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent, and the Holders of the Warrants any legal or equitable right,
remedy or claim under this Agreement, but this Agreement shall be for the sole
and exclusive benefit of the Company, the Warrant Agent and the Holders of the
Warrants.
24. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
25. Captions. The captions of the Sections and subsections of
this Agreement have been inserted for convenience only and shall have no
substantive effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the date first above written.
WIZZARD SOFTWARE CORPORATION
By/s/Xxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxxxxx,
President and Director
INTERWEST TRANSFER CO., as Warrant Agent
By/s/Xxxx Xxxxxx
Xxxx Xxxxxx, President
