SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (this “Agreement”), is dated as of December 2, 2008,
by and among Wizzard Software Corporation, a Colorado corporation (the
“Company”), and the subscribers identified on the signature pages hereto (each a
“Subscriber” and collectively “Subscribers”).

WHEREAS, the Company and the Subscribers are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).

WHEREAS, the parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to such Subscribers, as
provided herein, and such Subscribers, in the aggregate, shall purchase for up
to $1,100,000 (the “Purchase Price”) of secured 11% promissory notes of the
Company (“Note” or “Notes”), a form of which is annexed hereto as Exhibit A (the
“Offering”).  The Notes are referred to herein as the “Securities.”; and

WHEREAS, the Purchase Price to be paid by the Subscribers and the Notes to be
issued by the Company as provided herein shall be held in escrow pursuant to the
terms of a Funds Escrow Agreement to be executed by the parties substantially in
the form attached hereto as Exhibit B (the “Escrow Agreement”).

NOW, THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement the Company and the Subscribers hereby agree as
follows:

1.

Closing Date.   The “Closing Date” shall be the date that the Purchase Price is
transmitted by wire transfer or otherwise credited to or for the benefit of the
Company. The consummation of the transactions contemplated herein shall take
place at the offices of Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601,
New York, New York 10176, upon the satisfaction or waiver of all conditions to
closing set forth in this Agreement.

2.

Notes.   Subject to the satisfaction or waiver of the terms and conditions of
this Agreement, on the Closing Date, each Subscriber shall purchase and the
Company shall sell to each Subscriber a Note in the principal amount designated
on the signature page hereto for such Subscriber’s respective portion of the
Purchase Price indicated thereon.

3.

Security Interest.   The Subscribers will be granted a security interest in the
assets of the Company and Subsidiaries (as defined in Section 5(a) of this
Agreement), including ownership of the Subsidiaries and in the assets of the
Subsidiaries, which security interest will be memorialized in a “Security
Agreement,” a form of which is annexed hereto as Exhibit C.   The Subsidiaries
will guaranty the Company’s obligations under the Transaction Documents as
defined in Section 5(c).   Such guaranties will be memorialized in a “Subsidiary
Guaranty”, the form of which is annexed hereto as Exhibit D.  The Company will
execute such other agreements, documents and financing statements reasonably
requested by the Subscribers, which may be filed at the Company’s expense with
the jurisdictions, states and counties designated by the Subscribers.  The
Company will also execute all such documents reasonably necessary in the opinion
of the Subscribers to memorialize and further protect the security interest
described herein.  The Subscribers will appoint a Collateral Agent to represent
them collectively in connection with the security interests to be granted to the
Subscribers. The appointment of the Collateral Agent in connection with the
Security Agreement will be pursuant to a “Collateral Agent Agreement,” a form of
which is annexed hereto as Exhibit E.

1

12/2/2008, 1:59 PM

4.

Subscriber Representations and Warranties.  Each Subscriber hereby represents
and warrants to and agrees with the Company only as to such Subscriber that:

(a)

Organization and Standing of the Subscribers .  If such Subscriber is an entity,
such Subscriber is a corporation, partnership or other entity duly incorporated
or organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.

(b)

Authorization and Power .  Such Subscriber has the requisite power and authority
to enter into and perform this Agreement and the other Transaction Documents and
to purchase the Notes being sold to it hereunder.  The execution, delivery and
performance of this Agreement and the other Transaction Documents by such
Subscriber and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate or partnership
action, and no further consent or authorization of such Subscriber or its Board
of Directors, stockholders, partners, members, as the case may be, is required.
 This Agreement and the other Transaction Documents have been duly authorized,
executed and when delivered by such Subscriber and constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of such
Subscriber enforceable against such Subscriber in accordance with the terms
thereof.

(c)

No Conflicts .  The execution, delivery and performance of this Agreement and
the other Transaction Documents and the consummation by such Subscriber of the
transactions contemplated hereby and thereby or relating hereto do not and will
not (i) result in a violation of such Subscriber’s charter documents, bylaws or
other organizational documents, (ii) conflict with nor constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, nor (iii) result in a violation of any law, rule, or regulation, or any
order, judgment or decree of any court or governmental agency applicable to such
Subscriber or its properties (except for such conflicts, defaults and violations
as would not, individually or in the aggregate, have a material adverse effect
on such Subscriber).  Such Subscriber is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement and the other Transaction Documents  nor to
purchase the Securities in accordance with the terms hereof, provided that for
purposes of the representation made in this sentence, such Subscriber is
assuming and relying upon the accuracy of the relevant representations and
agreements of the Company herein.

(d)

Information on Company.   S uch Subscriber has been furnished with or has had
access at the EDGAR Website of the Commission to the Company's Form 10-K filed
on March 17, 2008 for the fiscal year ended December 31, 2007, and the financial
statements included therein for the year ended December 31, 2007, together with
all subsequent filings made with the Commission available at the EDGAR website
until five days before the Closing Date (hereinafter referred to collectively as
the "Reports").  In addition, such Subscriber may have received in writing from
the Company such other information concerning its operations, financial
condition and other matters as such Subscriber has requested in writing,
identified thereon as OTHER WRITTEN INFORMATION (such other information is
collectively, the "Other Written Information"), and considered all factors such
Subscriber deems material in deciding on the advisability of investing in the
Securities.  

(e)

Information on Subscriber.   Subscriber is, and will be at the time of the
issuance of the Notes, an "accredited investor", as such term is defined in
Regulation D promulgated by the Commission under the 1933 Act, is experienced in
investments and business matters, has made investments of a speculative nature
and has purchased securities of United States publicly-owned companies in
private placements in the past and, with its representatives, has such knowledge
and experience in financial, tax and

2

12/2/2008, 1:59 PM

other business matters as to enable such Subscriber to utilize the information
made available by the Company to evaluate the merits and risks of and to make an
informed investment decision with respect to the proposed purchase, which
represents a speculative investment.  S uch Subscriber has the authority and is
duly and legally qualified to purchase and own the Securities.  S uch Subscriber
is able to bear the risk of such investment for an indefinite period and to
afford a complete loss thereof.  The information set forth on the signature page
hereto regarding such Subscriber is accurate.

(f)

Purchase of Notes.  On the Closing Date, such Subscriber will purchase the Notes
as principal for its own account for investment only and not with a view toward,
or for resale in connection with, the public sale or any distribution thereof.

(g)

Compliance with Securities Act.   S uch Subscriber understands and agrees that
the Securities have not been registered under the 1933 Act or any applicable
state securities laws, by reason of their issuance in a transaction that does
not require registration under the 1933 Act (based in part on the accuracy of
the representations and warranties of such Subscriber contained herein), and
that such Securities must be held indefinitely unless a subsequent disposition
is registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration.  In any event, and subject to compliance with
applicable securities laws, the Subscriber may enter into lawful hedging
transactions in the course of hedging the position they assume and the
Subscriber may also enter into lawful short positions or other derivative
transactions relating to the Securities, or interests in the Securities, and
deliver the Securities, or interests in the Securities, to close out their short
or other positions or otherwise settle other transactions, or loan or pledge the
Securities, or interests in the Securities, to third parties who in turn may
dispose of these Securities.

(h)

Note Legend.  The Note shall bear the following legend:

"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
 THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."

(i)

Communication of Offer.  The offer to sell the Securities was directly
communicated to such Subscriber by the Company.  At no time was such Subscriber
presented with or solicited by any leaflet, newspaper or magazine article, radio
or television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer.

(j)

Restricted Securities.   Such Subscriber understands that the Securities have
not been registered under the 1933 Act and such Subscriber will not sell, offer
to sell, assign, pledge, hypothecate or otherwise transfer any of the Securities
unless pursuant to an effective registration statement under the 1933 Act, or
unless an exemption from registration is available.  Notwithstanding anything to
the contrary contained in this Agreement, such Subscriber may transfer (without
restriction and without the need for an opinion of counsel) the Securities to
its Affiliates (as defined below) provided that each such Affiliate is an
“accredited investor” under Regulation D and such Affiliate agrees to be bound
by the terms and conditions of this Agreement. For the purposes of this
Agreement, an “Affiliate” of any person or entity means any other person or
entity directly or indirectly controlling, controlled by or under direct or
indirect

3

12/2/2008, 1:59 PM

common control with such person or entity.  Affiliate includes each Subsidiary
of the Company.  For purposes of this definition, “control” means the power to
direct the management and policies of such person or firm, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.

(k)

No Governmental Review.  Such Subscriber understands that no United States
federal or state agency or any other governmental or state agency has passed on
or made recommendations or endorsement of the Securities or the suitability of
the investment in the Securities nor have such authorities passed upon or
endorsed the merits of the offering of the Securities.

(l)

Correctness of Representations.  Such Subscriber represents as to such
Subscriber that the foregoing representations and warranties are true and
correct as of the date hereof and, unless such Subscriber otherwise notifies the
Company prior to the Closing Date shall be true and correct as of the Closing
Date.

(m)

Survival.  The foregoing representations and warranties shall survive the
Closing Date.

5.

Company Representations and Warranties.  The Company represents and warrants to
and agrees with each Subscriber that:

(a)

Due Incorporation.  The Company is a corporation or other entity duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization and has the requisite
corporate power to own its properties and to carry on its business as presently
conducted.  The Company is duly qualified as a foreign corporation to do
business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not have
a Material Adverse Effect.  For purposes of this Agreement, a “Material Adverse
Effect” shall mean a material adverse effect on the financial condition, results
of operations, prospects, properties or business of the Company and its
Subsidiaries taken as a whole.  For purposes of this Agreement, “Subsidiary”
means Interim Healthcare of Wyoming, Inc., with respect to any successor entity
or subsidiary to such entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity of which more than 30% of (i) the outstanding
capital stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors or other managing body of such
entity, (ii) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (iii) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such entity.
 Except as indicated on Schedule 5(a) hereto, as of the Closing Date, the
Company’s only Subsidiary is Interim Healthcare of Wyoming, Inc., a Wyoming
corporation, which is wholly-owned by the Company.

(b)

Outstanding Stock.  All issued and outstanding shares of capital stock of the
Company and Subsidiary have been duly authorized and validly issued and are
fully paid and non-assessable.

(c)

Authority; Enforceability.  This Agreement, the Note, the Security Agreement,
Subsidiary Guaranty, the Escrow Agreement, Collateral Agent Agreement, and any
other agreements delivered together with this Agreement or in connection
herewith (collectively “Transaction Documents”) have been duly authorized,
executed and delivered by the Company and Subsidiaries (as applicable) and are
valid and binding agreements of the Company enforceable 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 and to general principles of equity.  The

4

12/2/2008, 1:59 PM

Company has full corporate power and authority necessary to enter into and
deliver the Transaction Documents and to perform its obligations thereunder.

(d)

Consents.  No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Company,
or any of its Affiliates, the American Stock Exchange (“AMEX”) or the Company's
shareholders is required for the execution by the Company of the Transaction
Documents and compliance and performance by the Company of its obligations under
the Transaction Documents, including, without limitation, the issuance and sale
of the Securities.  The Transaction Documents and the Company’s performance of
its obligations thereunder has been unanimously approved by the Company’s Board
of Directors.

(e)

No Violation or Conflict.  Assuming the representations and warranties of the
Subscribers in Section 4 are true and correct, neither the issuance and sale of
the Securities nor the performance of the Company’s obligations under this
Agreement and all other agreements entered into by the Company relating thereto
by the Company will:

(i)

violate, conflict with, result in a breach of, or constitute a default (or an
event which with the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) under (A) the articles or certificate
of incorporation, charter or bylaws of the Company, (B) to the Company's
knowledge, any decree, judgment, order, law, treaty, rule, regulation or
determination applicable to the Company of any court, governmental agency or
body, or arbitrator having jurisdiction over the Company or over the properties
or assets of the Company or any of its Affiliates, (C) the terms of any bond,
debenture, note or any other evidence of indebtedness, or any agreement, stock
option or other similar plan, indenture, lease, mortgage, deed of trust or other
instrument to which the Company or any of its Affiliates is a party, by which
the Company or any of its Affiliates is bound, or to which any of the properties
of the Company or any of its Affiliates is subject, or (D) the terms of any
"lock-up" or similar provision of any underwriting or similar agreement to which
the Company, or any of its Affiliates is a party except the violation, conflict,
breach, or default of which would not have a Material Adverse Effect; or

(ii)

result in the creation or imposition of any lien, charge or encumbrance upon the
Securities or any of the assets of the Company or any of its Affiliates except
in favor of Subscribers as described herein; or

(iii)

result in the activation of any anti-dilution rights or a reset or repricing of
any debt, equity or security instrument of any creditor or equity holder of the
Company, or the holder of the right to receive any debt, equity or security
instrument of the Company nor result in the acceleration of the due date of any
obligation of the Company; or

(iv)

result in the triggering of any piggy-back or other registration rights of any
person or entity holding securities of the Company or having the right to
receive securities of the Company.

(f)

The Securities.  The Securities upon issuance:

(i)

are, or will be, free and clear of any security interests, liens, claims or
other encumbrances, subject only to restrictions upon transfer under the 1933
Act and any applicable state securities laws;

(ii)

have been, or will be, duly and validly authorized and on the dates of issuance
will be validly issued, fully paid and non-assessable;

5

12/2/2008, 1:59 PM

(iii)

will not have been issued or sold in violation of any preemptive or other
similar rights of the holders of any securities of the Company or rights to
acquire securities of the Company;

(iv)

will not subject the holders thereof to personal liability by reason of being
such holders; and

(v)

assuming the representations warranties of the Subscribers as set forth in
Section 4 hereof are true and correct, will not result in a violation of Section
5 under the 1933 Act.

(g)

Litigation.  There is no pending or, to the best knowledge of the Company,
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or any of its Affiliates that would affect the execution by the Company or the
complete and timely performance by the Company of its obligations under the
Transaction Documents.  Except as disclosed in the Reports, there is no pending
or, to the best knowledge of the Company, basis for or threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, or any of its Affiliates which
litigation if adversely determined would have a Material Adverse Effect.

(h)

No Market Manipulation.  The Company and its Affiliates have not taken, and will
not take, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Securities
or affect the price at which the Securities may be issued or resold.

(i)

Information Concerning Company.  The Reports and Other Written Information
contain all material information relating to the Company and its operations and
financial condition as of their respective dates which information is required
to be disclosed therein.   Since December 31, 2007 and except as modified in the
Other Written Information or in the Schedules hereto, there has been no Material
Adverse Event relating to the Company's business, financial condition or
affairs. The Reports and Other Written Information including the financial
statements included therein do not contain any 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, taken as a whole, not misleading in light of the
circumstances when made.

(j)

Solvency.  Except as indicated in Schedule 5(j), based on the financial
condition of the Company as of the Closing Date after giving effect to the
receipt by the Company of the proceeds from the sale of the Notes hereunder, (i)
the Company’s fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities) as they mature; (ii) the
Company’s assets do not constitute unreasonably small capital to carry on its
business for the current fiscal year as now conducted and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof; and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid.  The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).

(k)

Defaults.  The Company is not in violation of its articles of incorporation or
bylaws.  The Company is (i) not in default under or in violation of any other
material agreement or instrument to which it is a party or by which it or any of
its properties are bound or affected, which default or violation would have a
Material Adverse Effect, (ii) not in default with respect to any order of any
court, arbitrator or

6

12/2/2008, 1:59 PM

governmental body or subject to or party to any order of any court or
governmental authority arising out of any action, suit or proceeding under any
statute or other law respecting antitrust, monopoly, restraint of trade, unfair
competition or similar matters, or (iii) not in violation of any statute, rule
or regulation of any governmental authority which violation would have a
Material Adverse Effect.

(l)

No Integrated Offering.   Neither the Company, nor any of its Affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales of any security of the Company nor solicited any offers to buy
any security of the Company under circumstances that would cause the offer of
the Securities pursuant to this Agreement to be integrated with prior offerings
by the Company for purposes of the 1933 Act or any applicable stockholder
approval provisions, including, without limitation, under the rules and
regulations of the AMEX.  No prior offering will impair the exemptions relied
upon in this Offering or the Company’s ability to timely comply with its
obligations hereunder.  Neither the Company nor any of its Affiliates will take
any action or steps that would cause the offer or issuance of the Securities to
be integrated with other offerings which would impair the exemptions relied upon
in this Offering or the Company’s ability to timely comply with its obligations
hereunder.  The Company will not conduct any offering other than the
transactions contemplated hereby that may be integrated with the offer or
issuance of the Securities that would impair the exemptions relied upon in this
Offering or the Company’s ability to timely comply with its obligations
hereunder.

(m)

No General Solicitation.  Neither the Company, nor any of its Affiliates, nor to
its knowledge, any person acting on its or their behalf, has engaged in any form
of general solicitation or general advertising (within the meaning of Regulation
D under the 1933 Act) in connection with the offer or sale of the Securities.

(n)

No Undisclosed Liabilities.  The Company has no liabilities or obligations which
are material, individually or in the aggregate, other than those incurred in the
ordinary course of the Company businesses since December 31, 2007 and which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, except as disclosed in the Reports or on Schedule 5(n).

(o)

No Undisclosed Events or Circumstances.  Since December 31, 2007, except as
disclosed in the Reports, no event or circumstance has occurred or exists with
respect to the Company or its businesses, properties, operations or financial
condition, that, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly announced or disclosed in the Reports.

(p)

Capitalization.  The authorized and outstanding capital stock of the Company and
Subsidiaries on a fully diluted basis as of the date of this Agreement and the
Closing Date (not including the Securities) are set forth on Schedule 5(p).
 Except as indicated on Schedule 5(p), there are no options, warrants, or rights
to subscribe to, securities, rights, understandings or obligations convertible
into or exchangeable for or giving any right to subscribe for any shares of
capital stock or other equity interest of the Company or any of the
Subsidiaries.  The only officer, director, employee and consultant stock option
or stock incentive plan currently in effect or contemplated by the Company is
described on Schedule 5(p).

(q)

No Disagreements with Accountants and Lawyers.  There are no material
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise between the Company and the accountants and lawyers previously
and presently employed by the Company, including but not limited to disputes or
conflicts over payment owed to such accountants and lawyers, nor have there been
any such disagreements during the two years prior to the Closing Date.

(r)

Investment Company.   Neither the Company nor any Affiliate of the Company is an
“investment company” within the meaning of the Investment Company Act of 1940,
as

7

12/2/2008, 1:59 PM

amended.

(s)

Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is  in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

(t)

Reporting Company/Shell Company.  The Company is a publicly-held company subject
to reporting obligations pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended (the "1934 Act") and has a class of Common Stock registered
pursuant to Section 12(g) of the 1934 Act.  Pursuant to the provisions of the
1934 Act, the Company has timely filed all reports and other materials required
to be filed thereunder with the Commission during the preceding twelve months.
 As of the Closing Date, the Company is not a “shell company” nor a “former
shell company” as those terms are employed in Rule 144 under the 1933 Act.

(u)

Listing.  The Company's Common Stock is quoted on the AMEX under the symbol WZE.
 The Company has not received any oral or written notice that its Common Stock
is not eligible nor will become ineligible for quotation on the AMEX nor that
its Common Stock does not meet all requirements for the continuation of such
quotation.  The Company satisfies all the requirements for the continued
quotation of its Common Stock on the AMEX.

(v)

DTC Status.   The Company’s transfer agent is a participant in, and the Common
Stock is eligible for transfer pursuant to, the Depository Trust Company
Automated Securities Transfer Program. The name, address, telephone number, fax
number, contact person and email address of the Company transfer agent is set
forth on Schedule 5(v) hereto.

(w)

Company Predecessor and Subsidiaries.  The Company makes each of the
representations contained in Sections 5(a), (b), (c), (d), (e), (f), (h), (j),
(l), (o), (p), (q), (s), (t) and (u) of this Agreement, as same relate or could
be applicable to each Subsidiary of the Company.  All representations made by or
relating to the Company of a historical or prospective nature and all
undertakings described in Sections 9(g) through 9(l) shall relate, apply and
refer to the Company and its predecessors and successors.  The Company
represents that it owns all of the equity of the Subsidiary and rights to
receive equity of the Subsidiary, free and clear of all liens, encumbrances and
claims.  No person or entity other than the Company has the right to receive any
equity interest in the Subsidiary.

(x)

Correctness of Representations.  The Company represents that the foregoing
representations and warranties are true and correct as of the date hereof in all
material respects, and, unless the Company otherwise notifies the Subscribers
prior to the Closing Date, shall be true and correct in all material respects as
of the Closing Date; provided, that, if such representation or warranty is made
as of a different date in which case such representation or warranty shall be
true as of such date.

(y)

Survival.  The foregoing representations and warranties shall survive the
Closing Date.

6.

Regulation D Offering/Legal Opinion.  The offer and issuance of the Securities
to the Subscribers is being made pursuant to the exemption from the registration
provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933
Act and/or Rule 506 of Regulation D promulgated thereunder.  On

8

12/2/2008, 1:59 PM

the Closing Date, the Company will provide an opinion reasonably acceptable to
the Subscribers from the Company's legal counsel opining on the availability of
an exemption from registration under the 1933 Act as it relates to the offer and
issuance of the Securities and other matters reasonably requested by
Subscribers.  A form of the legal opinion is annexed hereto as Exhibit F.

7.

Subscriber’s Legal Fees.   The Company shall pay to Grushko & Mittman, P.C., a
fee of $10,000 (“Subscriber’s Legal Fees”) as reimbursement for services
rendered to the Subscribers in connection with this Agreement and the purchase
and sale of the Notes (the “Offering”).  The Subscriber’s Legal Fees and
expenses (to the extent known as of the Closing) will be payable out of funds
held pursuant to the Escrow Agreement.  Grushko & Mittman, P.C. will be
reimbursed at Closing for all lien searches, filing fees, and printing and
shipping costs for the closing statements to be delivered to Subscribers.

8.

Covenants of the Company.  The Company covenants and agrees with the Subscribers
as follows:

(a)

Stop Orders.  The Company will advise the Subscribers, within twenty-four hours
after it receives notice of issuance by the Commission, any state securities
commission or any other regulatory authority of any stop order or of any order
preventing or suspending any offering of any securities of the Company, or of
the suspension of the qualification of the Common Stock of the Company for
offering or sale in any jurisdiction, or the initiation of any proceeding for
any such purpose.  The Company will not issue any stop transfer order or other
order impeding the sale, resale or delivery of any of the Securities, except as
may be required by any applicable federal or state securities laws and unless
contemporaneous notice of such instruction is given to the Subscriber.

(b)

Listing/Quotation.  The Company shall promptly secure the quotation or listing
of the Shares upon each national securities exchange, or automated quotation
system upon which they are or become eligible for quotation or listing (subject
to official notice of issuance) and shall maintain same so long as any Notes are
outstanding.  The Company will maintain the quotation or listing of its Common
Stock on the AMEX, Nasdaq Capital Market, Nasdaq Global Market, Nasdaq Global
Select Market, OTC Bulletin Board, or New York Stock Exchange (whichever of the
foregoing is at the time the principal trading exchange or market for the Common
Stock (the “Principal Market”), and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the Principal Market, as applicable. The Company will provide the Subscribers
copies of all notices it receives notifying the Company of the threatened and
actual delisting of the Common Stock from any Principal Market.  As of the date
of this Agreement and the Closing Date, the AMEX is and will be the Principal
Market.

(c)

Market Regulations.  If required, the Company shall notify the Commission, the
Principal Market and applicable state authorities, in accordance with their
requirements, of the transactions contemplated by this Agreement, and shall take
all other necessary action and proceedings as may be required and permitted by
applicable law, rule and regulation, for the legal and valid issuance of the
Securities to the Subscribers and promptly provide copies thereof to the
Subscribers.

(d)

Filing Requirements.  From the date of this Agreement and until the last to
occur of (i) two (2) years after the Closing Date, (ii) until the Notes are no
longer outstanding (the date of such latest occurrence being the “End Date”),
the Company will (A) cause its Common Stock to continue to be registered under
Section 12(b) or 12(g) of the 1934 Act, (B) comply in all respects with its
reporting and filing obligations under the 1934 Act, (C) voluntarily comply with
all reporting requirements that are applicable to an issuer with a class of
shares registered pursuant to Section 12(g) of the 1934 Act, if the Company is
not subject to such reporting requirements, and (D) comply with all requirements
related to any registration statement filed pursuant to this Agreement.  The
Company will use its best efforts not to take any action or file any document
(whether or not permitted by the 1933 Act or the 1934 Act or the rules

9

12/2/2008, 1:59 PM

thereunder) to terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under said acts until the End Date.  Until
the End Date, the Company will continue the listing or quotation of the Common
Stock on a Principal Market and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the
Principal Market.  The Company agrees to timely file a Form D with respect to
the Securities if required under Regulation D and to provide a copy thereof to
each Subscriber promptly after such filing.

(e)

Use of Proceeds.   The proceeds of the Offering will be employed by the Company
for expenses of the Offering and general working capital.  Except as described
on Schedule 8(e), the Purchase Price may not and will not be used for accrued
and unpaid officer and director salaries, payment of financing related debt,
redemption of outstanding notes or equity instruments of the Company nor
non-trade obligations outstanding on a Closing Date.  For so long as any Notes
are outstanding, the Company will not prepay any financing related debt
obligations, except equipment payments, nor redeem any equity instruments of the
Company without the prior consent of the Subscribers.

(f)

Taxes.  From the date of this Agreement and until the End Date, the Company will
promptly pay and discharge, or cause to be paid and discharged, when due and
payable, all lawful taxes, assessments and governmental charges or levies
imposed upon the income, profits, property or business of the Company; provided,
however, that any such tax, assessment, charge or levy need not be paid if the
validity thereof shall currently be contested in good faith by appropriate
proceedings and if the Company shall have set aside on its books adequate
reserves with respect thereto, and provided, further, that the Company will pay
all such taxes, assessments, charges or levies forthwith upon the commencement
of proceedings to foreclose any lien which may have attached as security
therefore.

(g)

Insurance.  From the date of this Agreement and until the End Date, the Company
will keep its assets which are of an insurable character insured by financially
sound and reputable insurers against loss or damage by fire, explosion and other
risks customarily insured against by companies in the Company’s line of business
and location, in amounts sufficient to prevent the Company from becoming a
co-insurer and not in any event less than one hundred percent (100%) of the
insurable value of the property insured less reasonable deductible amounts; and
the Company will maintain, with financially sound and reputable insurers,
insurance against other hazards and risks and liability to persons and property
to the extent and in the manner customary for companies in similar businesses
similarly situated and located and to the extent available on commercially
reasonable terms.

(h)

Books and Records.  From the date of this Agreement and until the End Date, the
Company will keep true records and books of account in which full, true and
correct entries will be made of all dealings or transactions in relation to its
business and affairs in accordance with generally accepted accounting principles
applied on a consistent basis.

(i)

Governmental Authorities.   From the date of this Agreement and until the End
Date, the Company shall duly observe and conform in all material respects to all
valid requirements of governmental authorities relating to the conduct of its
business or to its properties or assets.

(j)

Intellectual Property.  From the date of this Agreement and until the End Date,
the Company shall maintain in full force and effect its corporate existence,
rights and franchises and all licenses and other rights to use intellectual
property owned or possessed by it and reasonably deemed to be necessary to the
conduct of its business, unless it is sold for value.

(j)

Properties.  From the date of this Agreement and until the End Date, the Company
will keep its properties in good repair, working order and condition, reasonable
wear and tear excepted, and from time to time make all necessary and proper
repairs, renewals, replacements, additions and

10

12/2/2008, 1:59 PM

improvements thereto; and the Company will at all times comply with each
provision of all leases and claims to which it is a party or under which it
occupies or has rights to property if the breach of such provision could
reasonably be expected to have a Material Adverse Effect.  The Company will not
abandon any of its assets except for those assets which have negligible or
marginal value or for which it is prudent to do so under the circumstances.

(k)

Confidentiality/Public Announcement.  From the date of this Agreement and until
the End Date, the Company agrees that except in connection with a Form 8-K and
the registration statement or statements regarding the Subscribers’ securities
or in correspondence with the SEC regarding same, it will not disclose publicly
or privately the identity of the Subscribers unless expressly agreed to in
writing by a Subscriber or only to the extent required by law and then only upon
not less than three days prior notice to Subscriber.  In any event and subject
to the foregoing, the Company undertakes to file a Form 8-K describing the
Offering not later than the fourth business day after the Closing Date.  Prior
to the Closing Date, such Form 8-K will be provided to Subscribers for their
review and approval.  Upon  delivery by the Company to the Subscribers after the
Closing Date of any notice or information, in writing, electronically or
otherwise, and while a Note is held by such Subscribers, unless the  Company has
in good faith determined that the matters relating to such notice do not
constitute material, nonpublic information relating to the Company or
Subsidiaries, the Company  shall within one business day after any such delivery
publicly disclose such  material,  nonpublic  information on a
Report on Form 8-K.  In the event that the Company believes that a notice or
communication to a Subscriber contains material, nonpublic information, relating
to the Company or Subsidiaries, the Company shall so indicate to such Subscriber
prior to delivery of such notice or information.  Subscriber will be granted
sufficient time to notify the Company that Subscriber elects not to receive such
information.   In such case, the Company will not deliver such information to
Subscriber.  In the absence of any such indication, such Subscriber shall be
allowed to presume that all matters relating to such notice and information do
not constitute material, nonpublic information relating to the Company or
Subsidiaries.

(l)

Non-Public Information.  The Company covenants and agrees that except for the
Reports, Other Written Information and schedules and exhibits to this Agreement
and any other disclosure required under the Transaction Documents, which
information the Company undertakes to publicly disclose not later than the
sooner of the required or actual filing date of the Form 8-K described in
Section 8(k) above, neither it nor any other person acting on its behalf will at
any time provide any Subscriber or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Subscriber shall have agreed in writing to accept such
information.  The Company understands and confirms that each Subscriber shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

(m)

Negative Covenants.   So long as a Note is outstanding, without the consent of
the Subscribers, the Company will not and will not permit any of its
Subsidiaries to directly or indirectly:

(i)

create, incur, assume or suffer to exist any pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, security title,
mortgage, security deed or deed of trust, easement or encumbrance, or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any lease or title retention agreement,
any financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Uniform Commercial Code or comparable
law of any jurisdiction) (each, a “Lien”) upon any of its property, whether now
owned or hereafter acquired except for:  (A) the Excepted Issuances (as defined
in Section 10 hereof), and (B) (a) Liens imposed by law for taxes that are not
yet due or are being contested in good faith and for which adequate reserves
have been established in accordance with generally accepted accounting
principles; (b) carriers’,

11

12/2/2008, 1:59 PM

warehousemen’s, mechanics’, material men’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or that are being
contested in good faith and by appropriate proceedings; (c) pledges and deposits
made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations; (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business; (e) Liens created with respect to the financing of the purchase of new
property in the ordinary course of the Company’s business up to the amount of
the purchase price of such property; and (f) easements, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected
property (each of (a) through (f), a “Permitted Lien”) and (g) indebtedness for
borrowed money which is not senior or pari passu in right of payment of the
Notes, or distribution or interest in the Company’s assets.

 

(ii)

amend its certificate of incorporation, bylaws or its charter documents so as to
materially and adversely affect any rights of the Subscriber (an increase in the
amount of authorized shares and an increase in the number of directors will not
be deemed adverse to the rights of the Subscribers);

(iii)

repay, repurchase or offer to repay, repurchase or otherwise acquire or make any
dividend or distribution in respect of any of its Common Stock, preferred stock,
or other equity securities other than to the extent permitted or required under
the Transaction Documents or as indicated in Schedule 8(m)(iii).

(iv)

engage in any transactions with any officer, director, employee or any Affiliate
of the Company, including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $100,000 other than (i) for payment of salary, or fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company, and (iii) for
other employee benefits, including stock option agreements under any stock
option plan of the Company; or

(v)

prepay or redeem any financing related debt or past due obligations outstanding
as of the Closing Date.

The Company agrees to provide Subscribers not less than ten (10) days notice
prior to becoming obligated to or effectuating a Permitted Lien or Excepted
Issuance.

(n)

Offering Restrictions.   For so long as any Note is outstanding, the Company
will not enter into any Equity Line of Credit or similar agreement, nor issue
nor agree to issue any floating or Variable Priced Equity Linked Instruments nor
any of the foregoing or equity with price reset rights (collectively, the
“Variable Rate Restrictions”), unless the proceeds of which are used to pay the
Notes in full.   For purposes hereof, “Equity Line of Credit” shall include any
transaction involving a written agreement between the Company and an investor or
underwriter whereby the Company has the right to “put” its securities to the
investor or underwriter over an agreed period of time and at an agreed price or
price formula, and “Variable Priced Equity Linked Instruments” shall include:
(A) any debt or equity securities which are convertible into, exercisable or
exchangeable for, or carry the right to receive additional shares of Common
Stock either (1) at any conversion, exercise or exchange rate or other price
that is based upon and/or varies with the trading prices of or quotations for
Common Stock at any time after the initial issuance of such

12

12/2/2008, 1:59 PM

debt or equity security, or (2) with a fixed conversion, exercise or exchange
price that is subject to being reset at some future date at any time after the
initial issuance of such debt or equity security due to a change in the market
price of the Company’s Common Stock since date of initial issuance, and (B) any
amortizing convertible security which amortizes prior to its maturity date,
where the Company is required or has the option to (or any investor in such
transaction has the option to require the Company to) make such amortization
payments in shares of Common Stock which are valued at a price that is based
upon and/or varies with the trading prices of or quotations for Common Stock at
any time after the initial issuance of such debt or equity security (whether or
not such payments in stock are subject to certain equity conditions).

(o)

Seniority.   Except for Permitted Liens and as otherwise provided for herein,
until the Notes are fully satisfied, the Company shall not grant any security
interest to be taken in the assets of the Company or any Subsidiary; nor issue
any debt, equity or other instrument which would give the holder thereof
directly or indirectly, a right in any assets of the Company or any Subsidiary
equal to or superior to any right of the holder of a Note in or to such assets.

(p)

Notices.   For so long as the Subscribers hold any Securities, the Company will
maintain a United States address and United States fax number for notice
purposes under the Transaction Documents.

(q)       Transactions With Insiders.  So long as any Note is outstanding, the
Company shall not, and shall cause each of its subsidiaries not to, enter into,
amend, modify or supplement, or permit any subsidiary to enter into, amend,
modify or supplement any agreement, transaction, commitment, or arrangement
relating to the sale, transfer or assignment of any of the Company’s tangible or
intangible assets with any of its Insiders (as defined below)(or any persons who
were Insiders at any time during the previous two (2) years), or any Affiliates
(as defined below) thereof, or with any individual related by blood, marriage,
or adoption to any such individual.  Affiliate for purposes of this Section 9(v)
means, with respect to any person or entity, another person or entity that,
directly or indirectly, (i) has a ten percent (10%) or more equity interest in
that person or entity, (ii) has ten percent (10%) or more common ownership with
that person or entity, (iii) controls that person or entity, or (iv) shares
common control with that person or entity.  “Control” or “Controls” for purposes
hereof means that a person or entity has the power, direct or indirect, to
conduct or govern the policies of another person or entity.  For purposes
hereof, “Insiders” shall mean any officer, director or manager of the Company,
including but not limited to the Company’s president, chief executive officer,
chief financial officer and chief operations officer, and any of their
affiliates or family members.

9.

Covenants of the Company and Subscriber Regarding Indemnification.

(a)

The Company agrees to indemnify, hold harmless, reimburse and defend the
Subscribers, the Subscribers' officers, directors, agents, Affiliates, members,
managers, control persons, and principal shareholders, against any claim, cost,
expense, liability, obligation, loss or damage (including reasonable legal fees)
of any nature, incurred by or imposed upon the Subscriber or any such person
which results, arises out of or is based upon (i) any material misrepresentation
by Company or breach of any representation or warranty by Company in this
Agreement or in any Exhibits or Schedules attached hereto in any Transaction
Documents, or other agreement delivered pursuant hereto or in connection
herewith, now or after the date hereof; or (ii) after any applicable notice
and/or cure periods, any breach or default in performance by the Company of any
covenant or undertaking to be performed by the Company hereunder, or any other
agreement entered into by the Company and Subscriber relating hereto.

(b)

In no event shall the liability of any Subscriber or permitted successor
hereunder or under any Transaction Document or other agreement delivered in
connection herewith be greater in amount than the dollar amount of the net
proceeds actually received by such Subscriber upon the sale of Registrable
Securities (as defined herein).

13

12/2/2008, 1:59 PM

10.

Right of First Refusal.  Until the Notes are no longer outstanding, the
Subscribers shall be given not less than ten business days prior written notice
of any proposed sale by the Company of its Common Stock or other securities or
equity linked debt obligations, except in connection with (i) full or partial
consideration in connection with a strategic merger, acquisition, consolidation
or purchase of substantially all of the securities or assets of corporation or
other entity which holders of such securities or debt are not at any time
granted registration rights, (ii) the Company’s issuance of securities in
connection with strategic license agreements and other partnering arrangements
so long as such issuances are not for the purpose of raising capital and which
holders of such securities or debt are not at any time granted registration
rights, (iii) the Company’s issuance of Common Stock or the issuances or grants
of options to purchase Common Stock to employees, directors, and consultants,
pursuant to plans described on Schedule 10, (iv) securities upon the exercise or
exchange of or conversion of any securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, and (v) the payment of any interest on the Notes pursuant to
this Agreement on the terms described in the Transaction Documents (collectively
the foregoing (i) through (v) are “Excepted Issuances”).  The Subscribers who
exercise their rights pursuant to this Section 10 shall have the right during
the five business days following receipt of the notice to purchase for cash or
by using the outstanding balance including principal, interest, liquidated
damages and any other amount then owing to such Subscriber by the Company, such
offered Common Stock, debt or other securities in accordance with the terms and
conditions set forth in the notice of sale, and if the aggregate other offering
is for less than the amounts owned to the Subscribers, collectively; in the same
proportion to each other as their purchase of Notes in the Offering.  In the
event such terms and conditions are modified during the notice period, the
Subscribers shall be given prompt notice of such modification and shall have the
right during the ten business days following the notice of modification to
exercise the right to participate in such offering.

11.

Miscellaneous.

(a)

Notices.  All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company, to: Wizzard Software
Corporation, 5001 Baum Boulevard, Suite 770, Pittsburgh, PA 15213, Attn:
Christopher J. Spencer, President and CEO, Fax: (412) 621-2625, with an
additional copy by fax only to: Burningham & Burningham, 455 East 500 South,
Suite 205, Salt Lake City, Utah 84111, Attn: Branden T. Burningham, Esq., Fax:
(801) 355-7126, and (ii) if to the Subscriber, to: the one or more addresses and
fax numbers indicated on the signature pages hereto, with an additional copy by
fax only to: Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York,
New York 10176, Fax: (212) 697-3575.

 (b)

Entire Agreement; Assignment.  This Agreement and other documents delivered in
connection herewith represent the entire agreement between the parties hereto
with respect to the subject matter hereof and may be amended only by a writing
executed by both parties.  Neither the Company nor the Subscribers have relied
on any representations not contained or referred to in this Agreement and the

14

12/2/2008, 1:59 PM

documents delivered herewith.   No right or obligation of the Company shall be
assigned without prior notice to and the written consent of the Subscribers.

(c)

Counterparts/Execution.  This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.  This Agreement
may be executed by facsimile signature and delivered by facsimile transmission.

(d)

Law Governing this Agreement.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state and county of New York.  The parties to this Agreement hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens.  The parties executing
this Agreement and other agreements referred to herein or delivered in
connection herewith on behalf of the Company agree to submit to the in personam
jurisdiction of such courts and hereby irrevocably waive trial by jury.  The
prevailing party shall be entitled to recover from the other party its
reasonable attorney's fees and costs.  In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law.  Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.
 Each party hereby irrevocably waives personal service of process and consents
to process being served in any suit, action or proceeding in connection with
this Agreement or any other Transaction Document by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained herein shall be deemed to limit
in any way any right to serve process in any other manner permitted by law.

(e)

Specific Enforcement, Consent to Jurisdiction.  The Company and Subscriber
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.  It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.  Subject to Section 11(d)
hereof, the Company hereby irrevocably waives, and agrees not to assert in any
such suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction in New York of such court, that the suit, action or proceeding
is brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper.  Nothing in this Section shall affect or limit any right
to serve process in any other manner permitted by law.

(f)

Independent Nature of Subscribers.     The Company acknowledges that the
obligations of each Subscriber under the Transaction Documents are several and
not joint with the obligations of any other Subscriber, and no Subscriber shall
be responsible in any way for the performance of the obligations of any other
Subscriber under the Transaction Documents. The Company acknowledges that each
Subscriber has represented that the decision of each Subscriber to purchase
Securities has been made by such Subscriber independently of any other
Subscriber and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company which may have been made or given by any other
Subscriber or by any agent or employee of any other Subscriber, and no
Subscriber or any of its agents or

15

12/2/2008, 1:59 PM

employees shall have any liability to any Subscriber (or any other person)
relating to or arising from any such information, materials, statements or
opinions.  The Company acknowledges that nothing contained in any Transaction
Document, and no action taken by any Subscriber pursuant hereto or thereto
(including, but not limited to, the (i) inclusion of a Subscriber in a
registration statement and (ii) review by, and consent to, such registration
statement by a Subscriber) shall be deemed to constitute the Subscribers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Subscribers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  The Company acknowledges that each Subscriber shall be
entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of the Transaction Documents, and it shall
not be necessary for any other Subscriber to be joined as an additional party in
any proceeding for such purpose.  The Company acknowledges that it has elected
to provide all Subscribers with the same terms and Transaction Documents for the
convenience of the Company and not because Company was required or requested to
do so by the Subscribers.  The Company acknowledges that such procedure with
respect to the Transaction Documents in no way creates a presumption that the
Subscribers are in any way acting in concert or as a group with respect to the
Transaction Documents or the transactions contemplated thereby.

(g)

Damages.   In the event the Subscriber is entitled to receive any liquidated
damages pursuant to the Transactions, the Subscriber may elect to receive the
greater of actual damages or such liquidated damages.

(h)

Consent.   As used in this Agreement and the Transaction Documents and any other
agreement delivered in connection herewith, “consent of the Subscribers” or
similar language means the consent of holders of not less than 60% of the
outstanding principal amount of the Notes on the date consent is requested (such
amount being a “Majority in Interest”).  A Majority in Interest may consent to
take or forebear from any action permitted under or in connection with the
Transaction Documents, modify any Transaction Document or waive any default or
requirement applicable to the Company, Subsidiaries or Subscribers under the
Transaction Documents provided the effect of such action does not waive any
accrued damages and further provided that the relative rights of the Subscribers
to each other remains unchanged.

(i)

Equal Treatment.   No consideration shall be offered or paid to any person to
amend or consent to a waiver or modification of any provision of the Transaction
Documents unless the same consideration is also offered and paid to all the
Subscribers and their permitted successors and assigns who agree or are deemed
to have agreed to such amendment or consent.

(j)

Maximum Payments.   Nothing contained herein or in any document referred to
herein or delivered in connection herewith shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law.  In the event that the rate of interest or
dividends required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the Subscriber and thus refunded to the
Company.

(k)

Calendar Days.   All references to “days” in the Transaction Documents shall
mean calendar days unless otherwise stated.  The terms “business days” and
“trading days” shall mean days that the New York Stock Exchange is open for
trading for three or more hours.  Time periods shall be determined as if the
relevant action, calculation or time period were occurring in New York City.
 Any deadline that falls on a non-business day in any of the Transaction
Documents shall be automatically extended to the next business day and interest,
if any, shall be calculated and payable through such extended period.

(l)

Maximum Liability.   In no event shall the liability of any Subscriber or
permitted successor hereunder or under any Transaction Document or other
agreement delivered in

16

12/2/2008, 1:59 PM

connection herewith be greater in amount than the dollar amount of the net
proceeds actually received by such Subscriber upon the sale of the Shares.

(m)

Captions: Certain Definitions.  The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.  As used in this Agreement the term “person” shall
mean and include an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization and a
government or any department or agency thereof.

(n)

Severability.  In the event that any term or provision of this Agreement shall
be finally determined to be superseded, invalid, illegal or otherwise
unenforceable pursuant to applicable law by an authority having jurisdiction and
venue, that determination shall not impair or otherwise affect the validity,
legality or enforceability: (i) by or before that authority of the remaining
terms and provisions of this Agreement, which shall be enforced as if the
unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.

(o)

Successor Laws.  References in the Transaction Documents to laws, rules,
regulations and forms shall also include successors to and functionally
equivalent replacements of such laws, rules, regulations and forms.  A successor
rule to Rule 144(b)(1)(i) shall include any rule that would be available to a
non-Affiliate of the Company for the sale of Common Stock not subject to volume
restrictions and after a six month holding period.

17

12/2/2008, 1:59 PM

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A)

Please acknowledge your acceptance of the foregoing Subscription Agreement by
signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.

WIZZARD SOFTWARE CORPORATION

a Colorado corporation

By: /s/ Chris Spencer

November 26, 2008

Name: Chris Spencer

Title: President

Dated: November 26, 2008

SUBSCRIBER

PURCHASE PRICE AND PRINCIPAL AMOUNT OF NOTE

ALPHA CAPITAL ANSTALT

Pradafant 7

9490 Furstentums

Vaduz, Lichtenstein

Fax: 011-42-32323196

/s/

(Signature)

By:

$200,000.00

18

12/2/2008, 1:59 PM

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (B)

Please acknowledge your acceptance of the foregoing Subscription Agreement by
signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.

WIZZARD SOFTWARE CORPORATION

a Colorado corporation

By:/s/ Chris Spencer

Name: Chris Spencer

Title: President

Dated: November 26, 2008

SUBSCRIBER

PURCHASE PRICE AND PRINCIPAL AMOUNT OF NOTE

MILL CITY VENTURES, LP

900 IDS Center

Minneapolis, MN 55402

Fax No.: _____________________________________

Taxpayer ID# (if applicable): _______________________

/s/

(Signature)

By:

$500,000.00

19

12/2/2008, 1:59 PM

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (C)

Please acknowledge your acceptance of the foregoing Subscription Agreement by
signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.

WIZZARD SOFTWARE CORPORATION

a Colorado corporation

By: /s/ Chris Spencer

Name: /s/ Chris Spencer

Title: President

Dated: November 26, 2008

SUBSCRIBER

PURCHASE PRICE AND PRINCIPAL AMOUNT OF NOTE

ISLE CAPITAL, LLC

900 IDS Center

80 South 8th Street

Minneapolis, MN 55402

Fax No.: _____________________________________

Taxpayer ID# (if applicable): _______________________

/s/

(Signature)

By:

$300,000.00

20

12/2/2008, 1:59 PM

LIST OF EXHIBITS AND SCHEDULES

Exhibit A

Form of Note

Exhibit B

Escrow Agreement

Exhibit C

Form of Security Agreement

Exhibit D

Form of Subsidiary Guaranty

Exhibit E

Form of Collateral Agent Agreement

Exhibit F

Form of Legal Opinion

Schedule 5(a)

Subsidiaries

Schedule 5(j)

Notes Payable - Solvency

Schedule 5(n)

Undisclosed Liabilities

Schedule 5(p)

Capitalization

Schedule 5(v)

Transfer Agent

Schedule 8(e)

Use of Proceeds

Schedule 8(m)(iii)

Dividends

Schedule 10

Plans for Issuances of Common Stock or Grants of Options to Purchase Common
Stock to Employees, Directors and Consultants

21

12/2/2008, 1:59 PM

Schedule 5(a) – Subsidiaries of Wizzard Software Corporation

Subsidiary

% Owned

Webmayhem Inc. d/b/a Liberated Syndication

100%

MedivoxRx Technologies Inc.

100%

Interim Healthcare of Wyoming, Inc.

100%

22

12/2/2008, 1:59 PM

Schedule 5(j) – Notes Payable excluded

Holder

Current Balance

ALPHA CAPITAL ANSTALT

 $1,075,000

WHALEHAVEN CAPITAL FUND LTD.

 $285,300

GENESIS MICROCAP

 $139,710

23

12/2/2008, 1:59 PM

Schedule 5(n) – Undisclosed Liabilities

NONE

24

12/2/2008, 1:59 PM

Schedule 5(p) – Capitalization

Description

Number/Amount

Common Stock Equivalent

Common Stock

 45,451,177

 45,451,177

Preferred Stock

 6,083

2,967,317

Warrants

4,523,851

4,523,851

Notes Payable

$1,500,010

750,005

Stock Options

2,750,000

2,750,000

25

12/2/2008, 1:59 PM

Schedule 5(v) – Transfer Agent

Interwest Transfer Company Inc.
Melinda Orth
1981 East 4800 South
Suite 100
Salt Lake City, UT 84117
(801) 277-3147 – Fax
(801) 272-9294 ext. 15

26

12/2/2008, 1:59 PM

Schedule 8(e) – Use of Proceeds

·

There are currently no accrued payments to any officers or directors.

·

Officers and Directors ongoing compensation

27

12/2/2008, 1:59 PM

Schedule 8(m)(iii) – Dividends

Holders of the Series A Convertible Preferred Stock are entitled to receive
cumulative dividends of 7% per annum for the first two years after issuance of
the Preferred Stock and 18% per annum thereafter, payable on January 1 and July
1, beginning on January 1, 2008.

28

12/2/2008, 1:59 PM

Schedule 10 – Company Stock Option Plans

·

2006 Stock Option Plan

·

2007 Stock Option Plan

·

2007 Key Employee Stock Option Plan

·

2008 Stock Option Plan

·

2008 Key Employee Stock Option Plan

·

2009 Stock Option Plan

29

12/2/2008, 1:59 PM