Document:

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                                                                   Exhibit 10.13

                           AGREEMENT OF SHAREHOLDERS

     THIS AGREEMENT OF SHAREHOLDERS is made this 12th day of November, 1992, by
and among Edward W. Stack, a resident of the State of New York ("E. Stack"),
Richard T. Stack, a resident of the state of Florida ("R. Stack") and Dick's
Clothing & Sporting Goods, Inc., a New York corporation (the "Company").

                             W I T N E S S E T H:

     WHEREAS, E. Stack and R. Stack currently are holders of Common Stock of the
Company; and

     WHEREAS, R. Stack is acquiring from E. Stack simultaneously herewith two
hundred ninety thousand shares of Series B Convertible Preferred Stock (the
"Series B Preferred Stock") of the Company pursuant to a Stock Purchase
Agreement (the "Purchase Agreement") of even date herewith; and

     WHEREAS, E. Stack is an officer, employee and member of the Board of
Directors of the Company and fully knowledgeable about the Company and its
business and affairs; and

     WHEREAS, E. Stack and R. Stack have also executed and delivered a
Stockholders' Agreement (the "Stockholders Agreement") of even date herewith
among E. Stack, R. Stack, the Company and the other holders of capital stock of
the Company; and

     NOW, THEREFORE, in consideration of the sale by E. Stack to R. Stack of the
Series B Preferred Stock, and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company, E. Stack and R. Stack agree as
follows:

     1. IRREVOCABLE PROXY. R. Stack hereby grants to E. Stack an irrevocable
proxy in the form attached hereto as Exhibit 1 in respect of all shares of
capital stock of the Company owned by R. Stack, whether now owned or hereafter
acquired by R. Stack. R. Stack hereby agrees that he will, as and when necessary
or advisable, execute and deliver such additional irrevocable proxies or other
documents as requested by E. Stack from time to time during the term of this
Agreement to ensure that E. Stack is fully and completely authorized to act as
proxy for R. Stack for all matters in respect of all shares of capital stock of
the Company held by R. Stack. R. Stack hereby represents and warrants that as of
the date of this Agreement he is the owner of two hundred fifty thousand
(250,000) shares of Common Stock of the Company and two hundred ninety thousand
(290,000) shares of Series B Preferred Stock, inclusive of the shares being
acquired pursuant to the Purchase Agreement.

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The irrevocable proxy granted to E. Stack hereunder shall be effective until
terminated in writing by E. Stack, PROVIDED, that in the event R. Stack desires
to sell common stock of the Company (subject to the limitation on sale set forth
in Section 2.1 of this Agreement) to a bonafide unaffiliated purchaser after
there has been a public offering of the Company's common stock, E. Stack will
agree to terminate the irrevocable proxy only as to the shares of common stock
that are sold to such bonafide unaffiliated purchaser.

[The rest of this page 1A has been left intentionally blank.]

                                      -1A-
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2. OPTION.

     2.1 GRANT. R. Stack hereby grants to E. Stack an option (the "Option") to
purchase one hundred forty five thousand (145,00) shares of Common Stock of the
Company owned by R. Stack, for the exercise price and on the other terms set
forth in this Section 2. R. Stack covenants and agrees that he shall at all
times maintain ownership of sufficient shares of Common Stock of the Company in
order to satisfy any exercise of the Option, such shares to be free and clear of
all liens, claims and encumbrances except those hereunder and under the
Stockholders' Agreement.

     2.2 TIME OF EXERCISE; TERM. The Option shall be exercisable by E. Stack in
whole or in part at any time after the completion of a public offering of shares
of Common Stock of the Company. The Option shall be irrevocable and shall not
terminate unless and until the earlier of (a) the tenth anniversary of the date
of this Agreement or (b) E. Stack agrees in writing to a termination of the
Option. Upon any partial exercise of the Option, the Option shall remain
outstanding for all remaining shares as to which it has not been exercised.

     2.3 EXERCISE PRICE. Subject to any adjustment required by Section 2.6 of
this Agreement, the exercise price of the Option for each share of Common Stock
covered thereby shall be equal to seventy five percent (75%) of the per share
Market Price (as hereinafter defined) of the Common Stock of the Company on the
date the Option is exercised. For purposes of this Agreement, the Market Price
of the Common Stock of the Company shall be deemed to be the mean between the
high and low prices of the Common Stock on the national securities exchange on
the day on which the Option is exercised, if the Common Stock is then being
traded on a national securities exchange, and if the Common Stock is then being
traded on such an exchange but there are no sales on such day, the Market Price
shall be deemed to be the mean between the high and low prices of the Common
Stock on the national securities exchange on the day on which the most recent
sales occurred prior to the date of exercise; and if the Common Stock is not
then traded on such an exchange, then the Market Price shall be deemed to be the
mean between the high and low bid and asked prices for the Common Stock on the
over-the-counter market on the day on which the Option is exercised.

     2.4 MANNER OF EXERCISE. E. Stack shall exercise the Option, as to all or a
portion of the shares covered thereby, by providing written notice of exercise
to R. Stack. The notice of exercise shall be signed by E. Stack and shall
specify the number of shares to be purchased and the exercise price to be paid
therefor, and shall be accompanied by the payment of the exercise price for the
shares as to which the Option is then being exercised. The exercise price must
be payable in United States dollars and may be paid by check or wire transfer
payable to R. Stack. Upon notice of exercise and payment of the exercise

                                      -2-

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price, R. Stack shall deliver to E. Stack a stock certificate or certificates
representing the number of shares of Common Stock as to which the Option has
been exercised, duly endorsed for transfer to E. Stack or accompanied by
executed stock powers reflecting transfer to E. Stack, in each case with his
signature(s) guaranteed. All such shares shall be free and clear of all liens,
claims and encumbrances except those imposed by this Agreement.

     2.5 TRANSFERABILITY. The Option granted hereby shall not be assignable or
transferable by E. Stack except that upon his death the Option shall be
transferable to the executors or administrators of his estate or any person or
persons who shall have acquired the right to exercise the Option by bequest or
inheritance. Transferability of shares of Common Stock issued upon the exercise
of the Option shall not be restricted by this Agreement.

     2.6 ADJUSTMENTS FOR CERTAIN TRANSACTIONS.

         (a) In case the Company shall (i) declare a dividend on outstanding
shares of its Common Stock in shares of its Common Stock, (ii) subdivide
outstanding shares of Common Stock, (iii) combine outstanding shares of Common
Stock into a smaller number of such shares, (iv) issue by reclassification of
shares of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation) any
shares of any class of stock, or (v) distribute any other property (other than
cash) as a distribution or dividend on or in exchange for shares of Common Stock
(including any such distribution in connection with a consolidation, merger,
sale of assets or liquidation), the number of shares of Common Stock or other
consideration for which the Option may be exercised at the time of the record
date for such dividend or the effective date of such subdivision, combination or
reclassification (the "Determination Date") shall be proportionately adjusted in
such manner that the number of shares of Common Stock for which E. Stack has an
Option shall be equal to the number of shares or other consideration that he
would be entitled to receive if the Option (or any unexercised portion thereof)
had been exercised immediately prior to the Determination Date.

         (b) In the event the Company takes any action described in subsections
(a)(i), (ii), (iii), (iv) or (v), above, the Company shall give written notice
of such action to E. Stack at least thirty (30) days prior to the action. Upon
any such action, the exercise price shall be increased or decreased, as the case
may be, such that the exercise price is equal to (i) the aggregate exercise
price less any amounts paid to R. Stack upon the partial exercise of the Option
prior to the Determination Date, (ii) divided by the number of shares of Common
Stock for which the Option may be exercised after the adjustment described in
subsection (a) above is made.

                                      -3-

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     3. TERMINATION. This Agreement, and the respective rights and obligations
of the parties hereto, shall terminate only upon a written agreement of
termination executed by all parties hereto.

     4. NOTICES. All notices and other communications hereunder shall be in
writing and shall be delivered to each party as follows:

                if to E. Stack to:

                        804 Overbrook Drive
                        Vestal, New York 13850

                if to R. Stack to:

                        15218 86th Way N.
                        Palm Beach Gardens, Florida  33418

                if to the Company to:

                        Dick's Clothing & Sporting Goods, Inc.
                        Corporate Park Drive
                        RD2, Box 34-B
                        Conklin, New York 13748

or to such other address as any party may specify in writing to other parties.
All such notices and other communications shall be effective after delivery to
the address specified.

     5. SPECIFIC PERFORMANCE. The rights of the parties under this Agreement are
unique and, accordingly, the parties shall, in addition to such other remedies
as may be available to any of them at law or in equity, have the right to
enforce their rights hereunder by actions for specific performance to the extent
permitted by law.

     6. LEGEND. The certificates representing all shares of capital stock of the
Company owned by R. Stack shall bear on their face a legend indicating the
existence of the restrictions imposed hereby.

     7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings between them or any of them as to such subject
matter.

     8. WAIVERS AND FURTHER AGREEMENTS. Any waiver by any party of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach of that provision or of any other provision hereof. Each
of the parties hereto agrees to execute all such further instruments and
documents and to take all such further action as any other party

                                      -4-

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may reasonably require in order to effectuate the terms and purposes of this
Agreement.

     9. ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
executors, legal representatives, successors and permitted transferees,
PROVIDED, HOWEVER, that except as specifically provided herein, this Agreement
shall not be assignable by any party without the written consent of the other
parties hereto.

     10. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and such invalid, illegal
and unenforceable provision shall be reformed and construed so that it will be
valid, legal, and enforceable to the maximum extent permitted by law.

     11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     12. SECTION HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

     13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as a
sealed instrument as of the day and year first above written.

                                DICK'S CLOTHING AND SPORTING GOODS, INC.

                                By:/s/
                                   -------------------------------
                                   President

                                /s/ Edward W. Stack
                                -------------------------------
                                EDWARD W. STACK

                                /s/ Richard T. Stack
                                -------------------------------
                                RICHARD T. STACK

                                      -5-
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                                                                       EXHIBIT 1

                               IRREVOCABLE PROXY
                               -----------------

     KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby make,
constitute and appoint EDWARD W. STACK his true and lawful attorney, for him and
in his name, place and stead, to act as his proxy in respect of all of the
shares of capital stock of Dick's Clothing & Sporting Goods, Inc., a New York
corporation (hereinafter referred to as the "Corporation"), which he now or
hereafter may own or hold, including, without limitation, the right, on his
behalf, to demand the call by any proper officer of the Corporation pursuant to
the provisions of its Certificate of Incorporation or By-Laws and as permitted
by law of a meeting of its shareholders and at any such meeting of shareholders,
annual, general or special, to vote for the transaction of any and all business
that may come before such meeting, or any adjournment thereof, including,
without limitation, the right to vote for the sale of all or any part of the
assets of the Corporation and/or the liquidation and dissolution of the
Corporation; giving and granting to his said attorney full power and authority
to do and perform each and every act and thing whether necessary or desirable to
be done in and about the premises, as fully as he might or could do if
personally present with full power of substitution, appointment and revocation,
hereby ratifying and confirming all that his said attorney shall do or cause to
be done by virtue hereof.

     This Proxy is given to EDWARD W. STACK pursuant to the Agreement of
Shareholders of even date herewith by and among Edward W. Stack, Richard T.
Stack and the Corporation, and this Proxy shall not be revocable or revoked by
the undersigned, shall be binding upon his heirs, administrators, successors and
assigns until such Agreement of Shareholders is terminated as provided therein.
This Proxy shall survive so long as such Agreement of Shareholders is in effect.

     IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this ___ day of November, 1992.

                                           -------------------------------------
                                                     RICHARD T. STACK

STATE OF        )
                )   ss:
COUNTY OF       )

     On November ___, 1992 before me personally came Richard T. Stack to me
known, and known to me to be the individual described in, and who executed the
foregoing IRREVOCABLE PROXY, and duly acknowledged to me that he executed the
same.

                                        ________________________________________
                                        Notary Public

<PAGE>

                                                                    EXHIBIT 2

                                    RELEASE

     To all whom these presents shall come or may concern, know that Richard T.
Stack, residing at 15218 86th Way N., Palm Beach Gardens, Florida, as RELEASOR,
in consideration of the sum of one ($1) dollar and all other good and valuable
consideration received from Dick's Clothing & Sporting Goods, Inc. (the
"Company"), and Edward W. Stack, individually and as an officer, director and
shareholder of the Company, as RELEASEES, receipt and sufficiency of which are
hereby acknowledged, releases and discharges each RELEASEE, jointly and
severally, and each RELEASEE's officers, directors, shareholders, employees,
investors, agents, affiliates, administrators, heirs, successors and assigns,
individually and as representatives of RELEASEES, from all actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, claims, and
demands whatsoever, in law, admiralty or equity (hereinafter "ACTIONS"), which
against each RELEASEE, jointly or severally, the RELEASOR, RELEASOR'S, agents,
affiliates, administrators, successors or assigns ever had, now have or
hereafter can, shall or may, have, individually or as representatives of
RELEASOR, for, upon, or by reason of any matter, cause or thing, including
without limitation all ACTIONS arising out of the operation, management,
restructuring, recapitalization or issuance of capital stock of the Company,

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                                      -2-

from the beginning of the world to the day of the date of this RELEASE; except
for (a) ACTIONS under the Agreement of Shareholders dated as of November 11,
1992 among RELEASOR and RELEASEES, and (b) ACTIONS under the Stockholder's
Agreement dated as of November 11, 1992 among RELEASOR, RELEASEES, and the other
shareholders of the Company.

     This RELEASE may not be changed orally.

     IN WITNESS WHEREOF, the RELEASOR has hereunto set RELEASOR'S hand and seal
on November __, 1992.

In Presence of

--------------------------              ----------------------------------------
                                        RICHARD STACK

STATE OF                        )
                                )  SS.
COUNTY OF                       )

     On November __, 1992, before me personally came Richard T. Stack to me
known to be the individual described in, and who executed the foregoing RELEASE,
and duly acknowledged to me that he executed the same.

                                        ----------------------------------------
                                        Notary Republic

<PAGE>

                                                                      EXHIBIT 3

                            SHAREHOLDER CERTIFICATE

     The undersigned, Richard T. Stack, a shareholder of Dick's Clothing &
Sporting Goods, Inc., a New York corporation (the "Company"), does hereby
certify as follows:

     1.  I have reviewed and understand the proposed transaction involving the
Company pursuant to which the capital structure of the Company will be changed,
the rights and preferences of outstanding stock will be changed, additional
preferred stock that is convertible to common stock will be issued to certain
new investors, and a stockholders' agreement restricting my ability to transfer
my stock will be signed. I understand that this transaction will dilute my
interest in the Company and that certain rights that I may presently have,
including pre-emptive rights under New York law, will be eliminated.

     2.  I have been represented by counsel that I believe to be competent in
connection with the proposed transaction.

     3.  I have read the following documents relating to this transaction:

         (a)  Series A Preferred Stock Purchase Agreement and the Schedules to
              the Purchase Agreement;

         (b)  Stockholders Agreement;

         (c)  Registration Rights Agreement;

         (d)  Restatement of Certification of Incorporation;

         (e)  Stock Purchase Agreement;
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                                      -2-

         (f)  Unanimous Consent of Shareholders and related Resolutions;

         (g)  Termination of Stock Purchase Agreement;

         (h)  Agreement of Shareholders;

         (i)  Release; and

         (j)  Irrevocable Proxy.

All of the foregoing documents have been explained to me by my counsel and I
understand their effect on me and my ownership in the Company. My attorney and
I have been provided with the opportunity to speak with and ask questions of
the officers, directors and other shareholders of the Company, and the
Company's counsel, and to review documents and information regarding the
Company and the proposed transaction. To the extent questions have been asked
or documents or information requested they have been answered or provided to my
satisfaction and to the satisfaction of my attorney.

     4.  I have given careful consideration of the proposed transaction and have
decided to vote in favor of and to consummate the proposed transaction based
upon my personal review and investigation of the Company and the transaction and
upon the advice of my counsel. I am not relying on any representations, promises
or agreements of any other person except to the extent any representations,
promises or agreements are specifically set forth in one of the documents
described above.

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                                      -3-

     5.  I believe the proposed transaction is in my best interest as a
shareholder of the Company.

     Executed this ________ of November, 1992.

                                             ___________________________________
                                             RICHARD T. STACK

STATE OF               )
                       )      ss:
COUNTY OF              )

     On November ___, 1992 before me personally came Richard T. Stack to me
known, and known to me to be the individual described in, and who executed the
foregoing SHAREHOLDER CERTIFICATE, and duly acknowledged to me that he executed
the same.

                                             ___________________________________
                                             Notary Public<PAGE>

                                                                    Exhibit 10.1
                                                                    ------------

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.

                               SONIC FOUNDRY, INC.

                                     WARRANT

2002-13                                                     Dated: July 27, 2002

     Sonic Foundry, Inc., a Maryland corporation (the "Company"), hereby
certifies that, in exchange for services to be provided, Gary Feracota
("Holder") is entitled, subject to the terms set forth below, to purchase from
the Company up to a total of 50,000 shares of common stock, $.01 par value per
share (the "Common Stock"), of the Company (each such share, a "Warrant Share"
and all such shares, the "Warrant Shares") at an exercise price equal to $1.16
per share (as adjusted from time to time as provided in Section 9, the "Exercise
Price"), at any time and from time to time from and after the date hereof and
through and including July 27, 2007 (the "Expiration Date"), and subject to the
following terms and conditions:

1.         Registration of Warrant on Books and Records of the Company. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the "Warrant Register"), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes,
and the Company shall not be affected by notice to the contrary.

<PAGE>

2.        Registration of Transfers and Exchanges.

(a)             The Company shall register the transfer of any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant, with the Form
of Assignment attached hereto duly completed and signed, to the Transfer Agent
or to the Company at the office specified in or pursuant to Section 3(b). Upon
any such registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a "New Warrant"),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance of such transferee of all of the rights and obligations of a holder
of a Warrant.

(b)             This Warrant is exchangeable, upon the surrender hereof by the
Holder to the office of the Company specified in or pursuant to Section 3(b) for
one or more New Warrants, evidencing in the aggregate the right to purchase the
number of Warrant Shares which may then be purchased hereunder. Any such New
Warrant will be dated the date of such exchange.

3.        Duration and Exercise of Warrants.

(a)             This Warrant shall be exercisable by the registered Holder on
any business day before 8:00 P.M., New York City time, at any time and from time
to time on or after the date hereof to and including the Expiration Date. At
8:00 P.M., New York City time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value.
Prior to the Expiration Date, the Company may not call or otherwise redeem this
Warrant without the prior written consent of the Holder.

(b)             Subject to Sections 2(b), 6 and 10, upon surrender of this
Warrant, with the Form of Election to Purchase attached hereto duly completed
and signed, to the Company at its address for notice set forth in Section 13 and
upon payment of the Exercise Price multiplied by the number of Warrant Shares
that the Holder intends to purchase hereunder, in the manner provided hereunder,
all as specified by the Holder in the Form of Election to Purchase, the Company
shall promptly (but in no event later than 3 business days after the Date of
Exercise (as defined herein)) issue or cause to be issued and cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate, a certificate for the Warrant Shares issuable upon
such exercise, free of restrictive legends except (i) either in the event that a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), or (ii) if this Warrant shall have been issued pursuant to a written
agreement between the original Holder and the Company, as required by such
agreement. Any person so designated by the Holder to receive Warrant Shares
shall be

                                        2

<PAGE>

deemed to have become holder of record of such Warrant Shares as of the Date of
Exercise of this Warrant.

                A "Date of Exercise" means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the holder hereof to be
purchased.

                This Warrant shall be exercisable, either in its entirety or,
from time to time, for a portion of the number of Warrant Shares. If less than
all of the Warrant Shares which may be purchased under this Warrant are
exercised at any time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares for which no exercise has been evidenced by this Warrant.

4.              Registration. The Company shall, no later than September 1,
2002, file with the SEC a registration statement for all of the Warrant Shares
in accordance with the rules and regulations of the Securities and Exchange
Commission under the Securities Act of 1933.

5.              Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

6.              Replacement of Warrant. If this Warrant is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
indemnity, if requested, satisfactory to it. Applicants for a New Warrant under
such circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe.

7.              Reservation of Warrant Shares. The Company covenants that it
will at all times reserve and keep available out of the aggregate of its
authorized but unissued Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other actual
contingent purchase rights of persons other than the Holder (taking into account
the adjustments and restrictions of Section 9). The Company covenants that all
Warrant Shares that shall be so

                                        3

<PAGE>

issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.

8.              Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 8. Upon each such adjustment of the
Exercise Price pursuant to this Section 8, the Holder shall thereafter prior to
the Expiration Date be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.

(a)             If the Company, at any time while this Warrant is outstanding,
(i) shall pay a stock dividend (except scheduled dividends paid on outstanding
preferred stock as of the date hereof which contain a stated dividend rate) or
otherwise make a distribution or distributions on shares of its Common Stock or
on any other class of capital stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock into a larger number of shares, or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding before such event and of which the denominator shall
be the number of shares of Common Stock (excluding treasury shares, if any)
outstanding after such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision or
combination, and shall apply to successive subdivisions and combinations.

(b)             In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the sale or
transfer of all or substantially all of the assets of the Company or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then the Holder shall have the right
thereafter to exercise this Warrant only into the shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such reclassification, consolidation, merger, sale,
transfer or share exchange, and the Holder shall be entitled upon such event to
receive such amount of securities or property equal to the amount of Warrant
Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification, consolidation, merger, sale,
transfer or share exchange. The terms of any such consolidation, merger, sale,
transfer or share exchange shall include such terms so as to continue to give to
the Holder the right to receive the securities or property set forth in this
Section 9(b) upon any exercise following any such reclassification,
consolidation, merger, sale, transfer or share exchange.

                                        4

<PAGE>

(c)                   If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to holders
of this Warrant) evidences of its indebtedness or assets or rights or warrants
to subscribe for or purchase any security (excluding those referred to in
Sections 8(a), (b) and (d)), then in each such case the Exercise Price shall be
determined by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the Exercise Price
determined as of the record date mentioned above, and of which the numerator
shall be such Exercise Price on such record date less the then fair market value
at such record date of the portion of such assets or evidence of indebtedness so
distributed applicable to one outstanding share of Common Stock as determined by
the Company's independent certified public accountants that regularly examines
the financial statements of the Company (an "Appraiser").

(d)                   In case of any (1) merger or consolidation of the Company
with or into another Person, or (2) sale by the Company of more than one-half of
the assets of the Company (on a book value basis) in one or a series of related
transactions, or (3) tender or other offer or exchange (whether by the Company
or another Person) pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, stock, cash or property of
the Company or another Person; then the Holder shall have the right thereafter
to (A) exercise this Warrant for the shares of stock and other securities, cash
and property receivable upon or deemed to be held by holders of Common Stock
following such merger, consolidation or sale, and the Holder shall be entitled
upon such event or series of related events to receive such amount of
securities, cash and property as the Common Stock for which this Warrant could
have been exercised immediately prior to such merger, consolidation or sales
would have been entitled, (B) in the case of a merger or consolidation, (x)
require the surviving entity to issue to the Holder a warrant entitling the
Holder to acquire shares of such entity's common stock, which warrant shall have
terms identical (including with respect to exercise) to the terms of this
Warrant and shall be entitled to all of the rights and privileges set forth
herein and the agreements pursuant to which this Warrant was issued (including,
without limitation, as such rights relate to the acquisition, transferability,
registration and listing of such shares of stock other securities issuable upon
exercise thereof), or (C) in the event of an exchange or tender offer or other
transaction contemplated by clause (3) of this Section, tender or exchange this
Warrant for such securities, stock, cash and other property receivable upon or
deemed to be held by holders of Common Stock that have tendered or exchanged
their shares of Common Stock following such tender or exchange, and the Holder
shall be entitled upon such exchange or tender to receive such amount of
securities, cash and property as the shares of Common Stock for which this
Warrant could have been exercised immediately prior to such tender or exchange
would have been entitled as would have been issued. In the case of clause (B),
the exercise price applicable for the newly issued warrant shall be based upon
the amount of securities, cash and property that each shares of Common Stock
would receive in such transaction and the Exercise Price immediately prior to
the effectiveness or closing date for such transaction. The terms of any such
merger, sale, consolidation, tender or exchange shall include such terms so as
continue to give the Holder

                                       5

<PAGE>

the right to receive the securities, cash and property set forth in this Section
upon any conversion or redemption following such event. This provision shall
similarly apply to successive such events.

(e)                   For the purposes of this Section 8, the following clauses
shall also be applicable:

         (i)          Record Date. In case the Company shall take a record of
         the holders of its Common Stock for the purpose of entitling them (A)
         to receive a dividend or other distribution payable in Common Stock or
         in securities convertible or exchangeable into shares of Common Stock,
         or (B) to subscribe for or purchase Common Stock or securities
         convertible or exchangeable into shares of Common Stock, then such
         record date shall be deemed to be the date of the issue or sale of the
         shares of Common Stock deemed to have been issued or sold upon the
         declaration of such dividend or the making of such other distribution
         or the date of the granting of such right of subscription or purchase,
         as the case may be.

         (ii)         Treasury Shares. The number of shares of Common Stock
         outstanding at any given time shall not include shares owned or held by
         or for the account of the Company, and the disposition of any such
         shares shall be considered an issue or sale of Common Stock.

(f)                   No adjustments in the Exercise Price shall be required if
such adjustment is less than $0.01; provided, however, that any adjustments
which by reason of this Section 8 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 8 shall be made to the nearest cent or to the nearest 1/100th
of a share, as the case may be.

(g)                   Whenever the Exercise Price is adjusted pursuant to
Section 8(c) above, the Holder, after receipt of the determination by the
Appraiser, shall have the right to select an additional appraiser (which shall
be a nationally recognized accounting firm), in which case the adjustment shall
be equal to the average of the adjustments recommended by each of the Appraiser
and such appraiser. The Holder shall promptly mail or cause to be mailed to the
Company, a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Such
adjustment shall become effective immediately after the record date mentioned
above.

(i)                   If:

                                    (i)     the Company shall declare a dividend
                                            (or any other distribution) on its
                                            Common Stock; or

                                       6

<PAGE>

                                    (ii)    the Company shall declare a special
                                            nonrecurring cash dividend on or a
                                            redemption of its Common Stock; or

                                    (iii)   the Company shall authorize the
                                            granting to all holders of the
                                            Common Stock rights or warrants to
                                            subscribe for or purchase any shares
                                            of capital stock of any class or of
                                            any rights; or

                                    (iv)    the approval of any stockholders of
                                            the Company shall be required in
                                            connection with any reclassification
                                            of the Common Stock, any
                                            consolidation or merger to which the
                                            Company is a party, any sale or
                                            transfer of all or substantially all
                                            of the assets of the Company, or any
                                            compulsory share exchange whereby
                                            the Common Stock is converted into
                                            other securities, cash or property;
                                            or

                                    (v)     the Company shall authorize the
                                            voluntary dissolution, liquidation
                                            or winding up of the affairs of the
                                            Company,

then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, at least 30 calendar days prior
to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; provided, however, that the failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.

10.                   Payment of Exercise Price. The Holder shall pay the
Exercise Price in one of the following manners:

               (a)    Cash Exercise.  The Holder may deliver immediately
available funds; or

               (b)    Cashless  Exercise.  The Holder may surrender this Warrant
to the Company together with a notice of cashless exercise, in which event the
Company shall issue to the Holder the number of Warrant Shares determined as
follows:

                                       7

<PAGE>

                                    X = Y (A-B)/A

         where:
                                    X = the number of Warrant Shares to be
                                    issued
         to the Holder.

                                    Y = the number of Warrant Shares with
                                    respect to which this Warrant is being
                                    exercised.

                                    A = the average of the closing sale prices
                                    of the Common Stock for the five (5) trading
                                    days immediately prior to (but not
                                    including) the Date of Exercise.

                                    B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have been
commenced, on the issue date.

11.                   Certain Exercise Restrictions.

                      a) The Holder may not exercise  this Warrant to the extent
such exercise would result in the Holder, together with any affiliate thereof,
beneficially owning (as determined in accordance with Section 13(d) of the
Exchange Act of 1934 (the "Exchange Act") and the rules thereunder) in excess of
4.999% of the then issued and outstanding shares of Common Stock, including
shares issuable upon exercise of this Warrant after application of this Section.
The Holder shall have the sole authority and obligation to determine whether and
to what Warrant Shares the restriction contained in this Section applies. The
provisions of this Section may be waived by the Holder upon not less than 61
days prior notice to the Company.

                      (b) The Holder may not exercise  this Warrant to the
extent such exercise would result in the Holder, together with any affiliate
thereof, beneficially owning (as determined in accordance with Section 13(d) of
the Exchange Act and the rules thereunder) in excess of 9.999% of the then
issued and outstanding shares of Common Stock, including shares issuable upon
exercise of this Warrant after application of this Section. The Holder shall
have the sole authority and obligation to determine whether and to what Warrant
Shares the restriction contained in this Section applies. The provisions of this
Section may be waived by the Holder upon not less than 61 days prior notice to
the Company.

                                       8

<PAGE>

12.            Fractional Shares. The Company shall not be required to issue or
cause to be issued fractional Warrant Shares on the exercise of this Warrant.
The number of full Warrant Shares which shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section, be issuable on
the exercise of this Warrant, the Company shall pay an amount in cash equal to
the Exercise Price multiplied by such fraction.

13.            Notices. Any and all notices or other communications or
deliveries hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section prior to 8:00 p.m. (New York City time) on a business day, (ii) the
business day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section later than 8:00 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on such date, (iii) the business day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i) if to the Company, to
Sonic Foundry, Inc., 1617 Sherman Avenue, Madison, WI 53704, Attention: Chief
Financial Officer, or to Facsimile No. (608) 204-8804, or (ii) if to the Holder,
to the Holder at the address or facsimile number appearing on the Warrant
Register or such other address or facsimile number as the Holder may provide to
the Company in accordance with this Section.

14.            Warrant Agent. The Company shall serve as warrant agent under
this Warrant. Upon thirty (30) days' notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant Register.

15.            Miscellaneous.
(a)            This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. This Warrant may be
amended only in writing signed by the Company and the Holder and their
successors and assigns.

(b)            Subject to Section 14(a), above, nothing in this Warrant shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or cause under this Warrant. This
Warrant shall inure to the sole and exclusive benefit of the Company and the
Holder.

                                       9

<PAGE>

(c)            The corporate laws of the State of Maryland shall govern all
issues concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. The Company and the Holder hereby
irrevocably submit to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, borough of Manhattan, for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, or that such suit,
action or proceeding is improper. Each of the Company and the Holder hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by receiving a copy thereof sent
to the Company at the address in effect for notices to it under this instrument
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 manner permitted by law.

(d)            The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

(e)            In case any one or more of the provisions of this Warrant shall
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS

                                       10

<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

SONIC FOUNDRY, INC.

    /s/  Kenneth A. Minor
By:______________________

Name: Kenneth A. Minor
      ___________________

       CFO
Title:___________________

                                       11

<PAGE>

                          FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To Sonic Foundry, Inc.:

     In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of common stock, $.01 par value per share, of Sonic Foundry, Inc. (the
"Common Stock") and, if such Holder is not utilizing the cashless exercise
provisions set forth in this Warrant, encloses herewith $________ in cash,
certified or official bank check or checks, which sum represents the aggregate
Exercise Price (as defined in the Warrant) for the number of shares of Common
Stock to which this Form of Election to Purchase relates, together with any
applicable taxes payable by the undersigned pursuant to the Warrant.

     The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of

                                                PLEASE INSERT SOCIAL SECURITY OR
                                                TAX IDENTIFICATION NUMBER

                                                __________________________

                         (Please print name and address)

     If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock which the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests that
a New Warrant (as defined in the Warrant) evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:

_______________________
                        (Please print name and address)

_______________________

_______________________

Dated:________,__                 Name of Holder:

                                      (Print)________________________

                                      (By:)__________________________

                                      (Name:)________________________

                                      (Title:)_______________________
                                      (Signature must conform in all respects to
                                      name of holder as specified on the face of
                                      the Warrant)

<PAGE>

                               FORM OF ASSIGNMENT

           [To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant to
purchase ____________ shares of Common Stock of Sonic Foundry, Inc. to which the
within Warrant relates and appoints ________________ attorney to transfer said
right on the books of Sonic Foundry, Inc. with full power of substitution in the
premises.

Dated:

_______________, ____

                              _______________________________________________
                              (Signature must conform in all respects to name of
                              holder as specified on the face of the Warrant)

                              _______________________________________________
                              Address of Transferee

                              _______________________________________________

                              _______________________________________________

In the presence of:

____________________

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