MODIFICATION AGREEMENT

 

This Modification Agreement (“Agreement”) dated as of November 28, 2008 is
entered into by and among Wizard Software Corp., a Colorado corporation (the
“Company”) and the subscribers identified on the signature page hereto (each
herein a “Subscriber” and collectively the “Subscribers”).

 

WHEREAS, the Company and the Subscribers are parties to a Subscription Agreement
(“Subscription Agreements”) dated October 27, 2006 and an Amendment Agreement
dated December 8, 2006, relating to an aggregate investment of $2,375,000 by
Subscribers in secured convertible notes as further identified on Schedule A
(“Notes”) convertible into Common Stock of the Company and Class A and Class B
common stock purchase warrants as further identified on Schedule B (“Warrants”);

WHEREAS, the Company is preparing to enter into the following transaction which
will trigger the repricing provisions of Paragraphs 2.1(c)D of the Notes and 3.4
of the Warrants (the “Repricing Provisions”):

(a)  The reduction in the conversion price of the Company’s Series A 7%
Convertible Preferred Stock from $2.05 per share to $1.00 per share (the
“Preferred Stock Conversion Price Reduction”);  

WHEREAS, the Company and Subscribers desire to restructure the terms of the
Notes to their mutual benefit.

 

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.          All the capitalized terms employed herein shall have the meanings
attributed to them in the Subscription Agreements and the documents and
agreements delivered therewith.

 

 

2.

In accordance with Paragraph 2.1(c)D thereof, each of the Notes is amended as
follows:

 

(a)

The Conversion Price is $1.00 subject to adjustment as set forth in Section
2.1(c) of the Notes.

3.

Each of the Subscribers hereby waives the adjustment of the conversion price of
its Warrants under Paragraph 3.4 of such Warrants solely in connection with the
Preferred Stock Conversion Price Reduction.

3.

The holding period of the Notes, any stock issued upon any future conversion of
the Notes including additional shares of common stock that may be issuable due
to the reduction in the Notes’ Conversion Price (the “Additional Conversion
Shares”), the Warrants and any stock issued upon any future cashless exercise of
the Warrants, tacks back to the original issue date of the Notes and the
Warrants for Rule 144 purposes and all stock will be issued without any
restrictive legend in accordance with Rule 144.  Accordingly, each undersigned
Subscriber  hereby waives all registration rights that it may otherwise have
with respect to the Additional Shares and agrees that any obligation of the
Company to register for resale the Additional Conversion Shares shall be
suspended so long as the Subscribers may sell the Additional Conversion Shares
without any restriction or limitation under Rule 144 as of the date of issuance.

4.

The Company and each of the Subscribers hereby agree that the Company shall use
best efforts, as soon as reasonably practicable following the date hereof (but
not later than the fifth business day following the date hereof) to list or
quote all of the Additional Conversion Shares, but in no event less than ____
shares, on such trading market in addition to the shares of common stock already
listed or quoted prior to the date hereof, and each of the Subscribers further
agrees not to pursue any claim that it may otherwise have against the Company as
a result of any delay in the issuance of the Additional Conversion Shares and
which delay is beyond the control of the Company.

5.

All other terms and conditions of the Transaction Documents including the
accrual of regular interest shall remain in full force and effect and payable.

6.

This Modification Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to any other party, it being understood that all parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were an original
thereof. A copy of this Agreement annexed to the Notes or Warrants shall be
sufficient to reflect the amendment thereto.

[REST OF THIS PAGE LEFT INTENTIONALLY BLANK]

7.

Each of the undersigned has read the foregoing Agreement and understands and
agrees to it.

WIZARD SOFTWARE CORP.

(“Company”)

/s/ Chris Spencer

By: Chris Spencer

Its: President

ALPHA CAPITAL ANSTALT

WHALEHAVEN CAPITAL FUND, LTD.

(“Subscriber”)

(“Subscriber”)

/s/ Konrad Ackerman

/s/ Brian Mazzela

By: Konrad Ackerman

By: Brian Mazzela

Its: Director

Its: CFO

GENESIS MICROCAP, INC.

(“Subscriber”)

/s/

By:

Its:

Schedule A

Holder

Date

Principal Amount

Alpha Capital Anstalt

10/27/2006

$1,000,000.00

Alpha Capital Anstalt

12/8/2006

$100,000.00

Whalehaven Capital Fund, Ltd.

10/27/2006

$400,000.00

Whalehaven Capital Fund, Ltd.

12/8/2006

$350,000.00

Genesis Microcap, Inc.

10/27/2006

$350,000.00

Genesis Microcap, Inc.

12/8/2006

$175,000.00

Total

 

$2,375,000.00

 

Schedule B

Holder

Date

Class

Shares

Alpha Capital Anstalt

10/27/2006

Class A

250000

Alpha Capital Anstalt

10/27/2006

Class B

500000

Alpha Capital Anstalt

12/8/2006

Class A

25000

Alpha Capital Anstalt

12/8/2006

Class B

50000

Whalehaven Capital Fund, Ltd.

10/27/2006

Class A

100000

Whalehaven Capital Fund, Ltd.

10/27/2006

Class B

200000

Whalehaven Capital Fund, Ltd.

12/8/2006

Class A

87500

Whalehaven Capital Fund, Ltd.

12/8/2006

Class B

175000

Genesis Microcap, Inc.

10/27/2006

Class A

87500

Genesis Microcap, Inc.

10/27/2006

Class B

175000

Genesis Microcap, Inc.

12/8/2006

Class A

43750

Genesis Microcap, Inc.

12/8/2006

Class B

87500