SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”), dated as of June 10,
2009, is entered into by and between CyberDefender Corporation, a California
corporation (the “Company”), and Shimski L.P., a California Limited Partnership
(the “Purchaser”).
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act and Rule 506 promulgated
thereunder, the board of directors of the Company has authorized the sale and
issuance to the Purchaser of 632,500 shares of Common Stock, for a purchase
price of $1.75 per share, subject to the terms and conditions of this Agreement
(the “Offering”).
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchaser agree
as follows:
 
 
ARTICLE I.
DEFINITIONS
 
1.1           Definitions.  In addition to the terms defined elsewhere in this
Agreement, the following terms have the meanings indicated in this Section 1.1:
 
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
 
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the
Securities Act.  With respect to the Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as the Purchaser will be deemed to be an Affiliate of the Purchaser.
 
“Business Day” means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close or any day that the Common Stock is not traded on
the Trading Market.
 
 “Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.
 
“Closing Date” means the Business Day when all of the Transaction Documents have
been executed and delivered by the Company and the Purchaser, and all conditions
precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and
(ii) the Company’s obligations to deliver the Securities have been satisfied or
waived.
 
  “Commission” means the United States Securities and Exchange Commission.
 

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“Common Stock” means the common stock of the Company, no par value per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed into.
 
“Common Stock Equivalents” means any securities of the Company which would
entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
 
“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

 
“Material Adverse Effect” shall have the meaning ascribed to such term in
Section 3.1(b).
 
 “Offering” has the meaning set forth in the recitals hereof.
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
 “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Registration Statement” means a registration statement covering the resale of
the Securities filed with the Commission pursuant to the Company’s obligations
under Section 4.3 of this Agreement.
 
“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“Securities” means the shares of Common Stock sold to the Purchaser pursuant to
this Agreement.
 
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“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated hereunder.
 
“Subscription Amount” means $1,106,875 United States Dollars in immediately
available funds.
 
“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the American
Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.
 
“Transaction Documents” means this Agreement and any other documents,
instruments or agreements executed in connection with the transactions
contemplated hereby.
 
 
ARTICLE II.
PURCHASE AND SALE
 
2.1         Closing.  On the Closing Date, upon the terms and subject to the
conditions set forth herein and substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell and
the Purchaser agrees to purchase the Securities.  At or prior to the Closing,
the Purchaser shall deliver the Subscription Amount to the Company by wire
transfer in accordance with the Company’s written wire instructions to be
provided to Purchaser.  On the Closing Date, the Company shall deliver to the
Purchaser a certificate issued in the name of the Purchaser representing the
Securities, and the Company and the Purchaser shall deliver the other items set
forth in Section 2.2 deliverable at the Closing. The Closing shall occur upon
satisfaction of the conditions set forth in Sections 2.2 and 2.3.
 
2.2         Deliveries
 
(a)          On the Closing Date, the Company shall deliver or cause to be
delivered to the Purchaser the following:
 
 
(i)
this Agreement duly executed by the Company; and

 
(ii)           a certificate for 632,500 shares of Common Stock issued in the
name of the Purchaser; provided, however, that the Company may provide to
Purchaser, and for the purposes of consummating the Closing the Purchaser shall
accept, an electronic “pdf” copy such certificate, with the original certificate
to be delivered to the Purchaser no later than two Business Days following the
Closing Date.
 

(b)          On the Closing Date, the Purchaser shall deliver or cause to be
delivered to the Company the following:
 
 
(i)
this Agreement duly executed by the Purchaser; and

 
(ii)           the Subscription Amount.
 
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2.3         Closing Conditions.
 
(a)             The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:
 
(i)           the accuracy in all material respects when made and on the Closing
Date of the representations and warranties of the Purchaser contained herein;
 
(ii)           all obligations, covenants and agreements of the Purchaser
required to be performed at or prior to the Closing Date shall have been
performed; and
 
(iii)           the delivery by the Purchaser to the Company of the items set
forth in Section 2.2(b) of this Agreement.
 
(b)             The obligations of the Purchaser hereunder in connection with
the Closing are subject to the following conditions being met:
 
(i)           the accuracy in all material respects when made and on the Closing
Date of the representations and warranties of the Company contained herein;
 
(ii)           all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been performed;
 
(iii)           the delivery by the Company to the Purchaser of the items set
forth in Section 2.2(a) of this Agreement;
 
(iv)           there shall have been no Material Adverse Effect with respect to
the Company since March 31, 2009; and
 
(v)           from the date hereof to the Closing Date, a banking moratorium
shall not have been declared either by the United States or New York State
authorities nor shall there have occurred any material outbreak or escalation of
hostilities or other national or international calamity of such magnitude in its
effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of the Purchaser, makes it impracticable
or inadvisable to purchase the Securities at the Closing.
 
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
3.1         Representations and Warranties of the Company.  Except as set forth
in the SEC Documents or as specifically disclosed herein, the Company hereby
represents and warrants, as of the date hereof and as of the Closing Date, to
the Purchaser as follows:
 
(a)           Subsidiaries.  The Company has no (and has never had any)
subsidiaries and does not presently own, or record or beneficially, or control,
directly or indirectly, any capital stock, securities convertible into capital
stock or other equity interest in any corporation, association or business
entity, nor is the Company, directly or indirectly, a participant in any joint
venture, partnership or other entity.
 
(b)           Organization and Qualification.  The Company is an entity duly
incorporated, validly existing and in good standing under the laws of the State
of California, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.  The
Company is not in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.  The Company is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not have or
reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company, taken as a
whole, or (iii) a material adverse effect on the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
Proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.
 
(c)           Authorization; Enforcement.  The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, its board of directors or its stockholders in connection therewith
other than in connection with the Required Approvals.  Each Transaction Document
has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
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(d)           No Conflicts.  Except as set forth on Schedule 3.1(d), the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not: (i) conflict with or violate any
provision of the Company’s articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
debt or otherwise) or other understanding to which the Company is a party or by
which any property or asset of the Company is bound or affected (or result in
the imposition of any material Liens upon any of the Company’s assets), or (iii)
subject to the Required Approvals, conflict with or result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company is bound or affected; except in the case of
each of clauses (ii) and (iii), such as could not have or reasonably be expected
to result in a Material Adverse Effect.
 
(e)           Filings, Consents and Approvals.  The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
other than (i) the filing with the Commission of a Registration Statement as
required by this Agreement, and (ii) the filing of Form D with the Commission
and such filings as are required to be made under applicable state securities
laws (collectively, the “Required Approvals”).
 
(f)           Issuance of the Securities.  The Securities are duly authorized
and, when issued and paid for in accordance with this Agreement, will be duly
and validly issued, fully paid and non-assessable.
 
(g)           Capitalization.  Except as set forth on Schedule 3.1(g), the
capitalization of the Company is as disclosed in its Quarterly Report on Form
10-Q for the quarter ended March 31, 2009.  Except as a result of the purchase
and sale of the Securities or otherwise as set forth on Schedule 3.1(g) or in
such Quarterly Report, there are no outstanding options, warrants, script rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or is or may become bound to issue additional
shares of Common Stock or Common Stock Equivalents. Except as set forth on
Schedule 3.1(g), the issuance and sale of the Securities will not obligate the
Company to issue shares of Common Stock or other securities to any Person (other
than the Purchaser) and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price under any
of such securities. No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  All of the outstanding shares of
capital stock of the Company are validly issued, fully paid and non-assessable,
have been issued in compliance with all federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities.  No further approval
or authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and sale of the Securities.  There are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders.  Except as set forth on Schedule 3.1(g) and except for (a) shares
of Common Stock or Common Stock Equivalents issued to employees, officers,
directors or consultants (other than any consultant which engages in any
business which is competitive with or provides any services which are similar to
the business of or services provided by the Purchaser or any of its Affiliates
as determined at the time of the issuance) of the Company, (b) securities issued
upon the exercise, exchange,  conversion or amendment of any securities issued
and outstanding on the date hereof, or (c) securities issued pursuant to
acquisitions or strategic transactions, since March 31, 2009, the Company has
not sold or and issued any shares of Common Stock or Common Stock Equivalents at
a price per share (or conversion or exercise price, as the case may be) of less
than $1.75.
 
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(h)           SEC Documents.    The Company hereby makes reference to the
following documents filed by the Company with the Commission, which are
available for review on the Commission’s website, www.sec.gov (collectively, the
“SEC Documents”): (a) Annual Report on Form 10-K for the fiscal year ended
December 31, 2008; (b) and the Quarterly Report on Form 10-Q for the period
ended March 31, 2009; and any amendments thereto.  As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
Exchange Act, as amended, and the rules and regulations promulgated thereunder
and none of the SEC Documents contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles in the United States (“GAAP”) (except, in the case of
unaudited statements, as permitted by the applicable form under the Exchange
Act) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the financial position of the
Company as of the dates thereof and its consolidated statements of operations,
stockholders’ equity and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal and recurring year-end audit adjustments
which were and are not expected to have a Material Adverse Effect.  Except as
and to the extent set forth on the balance sheet of the Company as of March 31,
2009, including the notes thereto, the Company has no liability or obligation of
any nature (whether accrued, absolute, contingent or otherwise and whether
required to be reflected on a balance sheet or not).
 
(i)           Material Changes.  Since March 31, 2009, except as disclosed as a
subsequent event in the Company’s Quarterly Report on Form 10-Q for the quarter
ended March 31, 2009 (i) there has been no event, occurrence or development that
has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any
request for confidential treatment of information.
 
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(j)           Litigation.  There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect.  Neither the Company nor any director or
officer thereof is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty.  There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of
the Company.
 
(k)           Compliance. Except as set forth on Schedule 3.1(k), the Company is
not (i) in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a
default by the Company under), nor has the Company received notice of a claim
that it is in default under or that it is in violation of, any indenture, loan
or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) in violation of any order of any court,
arbitrator or governmental body, or (iii) in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws applicable to its business and all such
laws that affect the environment, except in each case as could not have or
reasonably be expected to result in a Material Adverse Effect.
 
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(l)           Title to Assets. The Company has good and marketable title in fee
simple to all real property owned by it that is material to the business of the
Company and good and marketable title in all personal property owned by it that
is material to the business of the Company, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and Liens for the payment of federal, state or
other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company are
held by it under valid, subsisting and enforceable leases with which the Company
is in compliance.
 
(m)         Intellectual Property.
 
(i)           Patents and Trademarks. The Company has, or has the rights to use,
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, trade secrets, inventions, copyrights, licenses and other
intellectual property rights and similar rights necessary or material for use in
connection with its business and which the failure to so have could have a
Material Adverse Effect (collectively, the "Intellectual Property Rights"). The
Company has not received a notice (written or otherwise) that the Intellectual
Property Rights used by the Company violate or infringe upon the rights of any
Person. To the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any
of the Intellectual Property Rights. The Company has taken reasonable security
measures to protect the secrecy, confidentiality and value of all of its
intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
(ii)           Know-How Necessary for the Business. The Intellectual Property
Rights are all those necessary for the operation of the Company's businesses as
it is currently conducted or as reflected in SEC Documents. The Company is the
owner of all right, title, and interest in and to each of the Intellectual
Property Rights, free and clear of all liens, security interests, charges,
encumbrances, equities, and other adverse claims, and has the right to use
without payment to a third party all of the Intellectual Property Rights.
 
(n)           Broker’s Fees. The Purchaser shall not be obligated to pay any
commission, brokerage fee, or finder’s fee based on any alleged agreement or
understanding between the Company and a third person in respect of the
transactions contemplated hereby.  The Company hereby agrees to indemnify the
Purchaser against any claim by any third person for any commission, brokerage
fee, finder’s fee, or other payment with respect to this Agreement or the
transactions contemplated hereby based on any alleged agreement or understanding
between the Company and any such third person, whether express or implied from
the actions of the Company or anyone acting or purporting to act on behalf of
the Company.
 
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(o)           Disçlosure. All disclosures furnished by or on behalf of the
Company to the Purchaser regarding the Company, its business and the
transactions contemplated hereby with respect to the representations and
warranties made herein are true and correct with respect to such representations
and warranties and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.

3.2          Representations and Warranties of the Purchaser.  The Purchaser
hereby represents and warrants as of the date hereof and as of the Closing Date
to the Company as follows:
 
(a)           Organization; Authority.  The Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full right, limited liability company power and authority to enter
into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution, delivery and performance by the Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
limited liability company action on the part of the Purchaser.  Each Transaction
Document has been duly executed by the Purchaser, and when delivered by the
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
(b)           Own Account.  The Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
in violation of the Securities Act or any applicable state securities law (this
representation and warranty not limiting the Purchaser’s right to sell the
Securities pursuant to a Registration Statement or otherwise in compliance with
applicable federal and state securities laws).
 
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(c)           Purchaser Status.  At the time the Purchaser was offered the
Securities, it was, and at the date hereof it is: (i) an “accredited investor”
as defined in Rule 501 under the Securities Act or (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act.  The
Purchaser is not required to be registered as a broker-dealer under Section 15
of the Exchange Act.
 
(d)           Experience of the Purchaser.  The Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters as to be capable of evaluating the
merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment.  The Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.
 
(e)           General Solicitation.  The Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
 
(f)           Access to Company Information.  The Purchaser acknowledges that it
has been afforded access and the opportunity to obtain all financial and other
information concerning the Company that the Purchaser desires (including the
opportunity to meet with the Company’s executive officers, either in person or
telephonically). The Purchaser has reviewed copies of the SEC Documents and is
familiar with the contents thereof, including, without limitation, the risk
factors contained in the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2008, and there is no further information about the
Company that the Purchaser desires in determining whether to acquire the
Securities.
 
(g)           Broker’s Fees. The Company shall not be obligated to pay any
commission, brokerage fee, or finder’s fee based on any alleged agreement or
understanding between the Purchaser and a third person in respect of the
transactions contemplated hereby.  The Purchaser hereby agrees to indemnify the
Company against any claim by any third person for any commission, brokerage fee,
finder’s fee, or other payment with respect to this Agreement or the
transactions contemplated hereby based on any alleged agreement or understanding
between the Purchaser and any such third person, whether express or implied from
the actions of the Purchaser or anyone acting or purporting to act on behalf of
the Purchaser.
 
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ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
4.1         Transfer Restrictions.
 
(a)           The Securities may only be disposed of in compliance with state
and federal securities laws.  In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the
Company or to an Affiliate of the Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act.  As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
the Purchaser under this Agreement.
 
(b)           The Purchaser agrees to the imprinting, so long as is required by
this Section 4.1, of a legend on any of the Securities in substantially the
following form:
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE 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, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.
 
The Company acknowledges and agrees that the Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, the Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties.  Such a pledge
or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in
connection therewith.  Further, no notice shall be required of such pledge.  At
the Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities, the preparation and
filing of any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders thereunder.
 
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(c)           The Purchaser agrees that the removal of the restrictive legend
from certificates representing Securities as set forth in this Section 4.1 is
predicated upon the Company’s reliance that the Purchaser will sell any
Securities pursuant to either the registration requirements of the Securities
Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a Registration Statement,
they will be sold in compliance with the plan of distribution set forth therein.
 
4.2         Form D; Blue Sky Filings.  The Company agrees to timely file a Form
D with respect to the Securities as required under Regulation D and to provide a
copy thereof, promptly upon request of the Purchaser. The Company shall take
such action as the Company shall reasonably determine is necessary in order to
obtain an exemption for, or to qualify the Securities for, sale to the Purchaser
under applicable securities or “Blue Sky” laws of the states of the United
States, and shall provide evidence of such actions promptly upon request of any
Purchaser.
 
4.3         Registration Rights.
 
(a)           Piggyback Rights.  The Purchaser shall have piggy-back
registration rights with respect to all of the Securities (except for
registrations on Commission Form S-4, S-8 or equivalent forms). Accordingly, the
Company agrees to include all of the Securities (other than Securities that have
been previously registered for resale under this Section 4.3(a)) in any
registration statement on Form S-1 or equivalent form filed with the Commission,
in order to register the resale of such shares pursuant and subject to Rule 415
of the Securities Act.  In addition, the Company agrees to use its commercially
reasonable efforts to register and qualify the securities covered by such
registration statement under such other state securities or state blue-sky laws
as shall be reasonably requested by the Purchaser; provided, however, that the
Company shall not be required to qualify to do business or to file a general
consent to service of process in any such states unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act.  The Company acknowledges and agrees that it shall make all
filings, disclosures, updates and any other actions which are necessary in order
to keep any registration statement which includes any shares issuable upon
exercise hereof effective for at least 24 months following the effective date of
such registration statement.  Notwithstanding the foregoing, the Company may
suspend the effectiveness of such registration statement for a period not to
exceed 90 days after the effective date thereof if the Company’s Board of
Directors reasonably believes that the continued effectiveness thereof would be
materially detrimental to the Company because such action would (i) materially
interfere with a significant acquisition, corporate reorganization, or other
similar transaction involving the Company; (ii) require premature disclosure of
material information that the Company has a bona fide business purpose for
preserving as confidential; or (iii) render the Company unable to comply with
requirements under the Securities Act or the Exchange Act, as applicable (each,
a “Material Suspension Event”), and any time periods with respect to filing or
effectiveness thereof shall be tolled correspondingly; provided, however, that
the Company shall not register any securities for resale for its own account or
that of any other stockholder during such 90 day period.  All expenses (other
than underwriting discounts, commissions and special counsel fees of the
Purchaser) incurred in connection with registration pursuant to this Section
4.3(a) shall be borne and paid by the Company.
 
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(b)          Demand Rights.
 
(i)           Upon written demand by the Purchaser to the Company, the Company
shall (i) prepare and file with the SEC, as soon as practicable thereafter but
in no event later than 45 days thereafter, a registration statement on Form S-1
or other applicable form in order to register the resale of all the Securities
that the Purchaser requests to be registered (other than Securities that have
been previously registered for resale under this Section 4.3(b)), pursuant and
subject to Rule 415 of the Act, (ii) use its best efforts to cause such
registration statement to become effective as soon as practicable after the
filing date thereof, and (iii) make all filings, disclosures, updates and any
other actions which are necessary in order to keep such registration statement
effective for at least 24 months following the effective date of such
registration statement.  Notwithstanding anything herein to the contrary, in the
event that all of the Securities that are requested by the Purchaser to be
registered on a registration statement pursuant to this Section 4.3(b) are not
registered on such registration statement, the Purchaser shall have the right to
demand that the Company register any such remaining unregistered Securities on a
subsequent registration statement on Form S-1 or other applicable form on the
terms and conditions set forth in this Section 4.3(b).
 
(ii)           Notwithstanding the foregoing, the Company may elect to delay the
filing of such registration statement for a period not to exceed 90 days, or may
suspend the effectiveness of such registration statement after the effective
date thereof for a period not to exceed 90 days, if, in either case, the
Company’s Board of Directors reasonably believes that the filing or continued
effectiveness, as the case may be, of such registration statement would be
materially detrimental to the Company because such action would cause a Material
Suspension Event, and any time periods with respect to filing or effectiveness
thereof shall be tolled correspondingly; provided, however, that the Company may
not invoke this right more than once in any twelve (12) month period, and
provided further that the Company shall not register any securities for resale
for its own account or that of any other stockholder during such 90 day
period.  All expenses (other than underwriting discounts, commissions and
special counsel fees of the Purchaser) incurred in connection with registration
pursuant to this Section 4.3(b) shall be borne and paid by the Company.  Except
as otherwise provided in Section 4(b)(i) above, the Purchaser may not exercise
its demand right pursuant to this Section 4.3(b) more than twice.
 
(c)           Rule 144.  The Company shall keep available adequate
current public information, as that term is defined in Rule 144 promulgated by
the Commission under the Securities Act, file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act or the Exchange Act (or within any extension periods permitted
under applicable regulations of the Commission), as applicable, and provide to
the Purchaser such information as may be reasonably requested by the Purchaser
in order to make available to the Purchaser the benefits of Rule 144 of the
Securities Act and any other rule or regulation of the Securities Act or the
Exchange Act, as applicable,  that may at any time permit the Purchaser to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-1 or any equivalent form.
 
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4.4           Use of Proceeds.

 
Working Capital.  The Company shall use the net proceeds from the Offering for
working capital purposes only and not for the satisfaction of any portion of the
Company's debt (other than payment of trade payables in the ordinary course of
the Company's business and prior practices), to redeem any Common Stock or
Common Stock Equivalents, or to settle any outstanding litigation without the
prior written consent of the Purchaser.

4.5           Indemnification of the Purchaser. The Company will indemnify and
hold the Purchaser and its Affiliates, and each of their directors, managers,
officers, shareholders, members, employees and agents, as the case may be (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title) (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents, provided that the Company’s liability under this Section
for a breach of any representations or warranties made by the Company in this
Agreement shall in no event exceed the Subscription Amount.

 
4.7           Securities Laws Disclosure; Publicity. The Company and the
Purchaser shall consult with each other in issuing any press releases with
respect to the transactions contemplated hereby, and neither the Company nor the
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of the Purchaser, or without the prior consent of the Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law or regulation, in which case the disclosing party shall promptly provide the
other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of the Purchaser, or include the name of the Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of the Purchaser, except (i) as required by federal securities law or
regulation in connection with (A) any registration statement contemplated herein
and (B) the filing with the Commission on Form 8-K of final Transaction
Documents (including signature pages thereto) and a summary thereof and (ii) to
the extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Purchaser with prior notice of such
disclosure permitted under this subclause (ii).
 
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4.8           Subsequent Equity Sales. If, at any time within ninety (90) days
following the Closing Date, the Company sells and issues any shares of Common
Stock or Common Stock Equivalents at a price per share (or conversion or
exercise price, as the case may be) of less than  $1.75 (a “Dilutive Issuance”),
then, not later than ten (10) business days following such Dilutive Issuance,
the Company shall be required to issue to the Purchaser, for no additional
consideration, an additional number shares of Common Stock equal to the
difference of (i) an amount equal to (A) the Subscription Amount divided by (B)
the price per share of shares issued or underlying Common Stock Equivalents in
connection with such Dilutive Issuance, less (ii) the number of shares of Common
Stock issued to the Purchaser hereunder, less (iii) the number of shares of
Common Stock issued to the Purchaser pursuant to this Section 4.8 as a result of
a prior Dilutive Issuance.  Such additional shares of Common Stock shall be
issued to the Purchaser whenever a Dilutive Issuance occurs.  A Dilutive
Issuance shall not include:  (a) shares of Common Stock or Common Stock
Equivalents issued to employees, officers, directors or consultants (other than
any consultant which engages in any business which is competitive with or
provides any services which are similar to the business of or services provided
by the Purchaser or any of its Affiliates as determined at the time of the
Dilutive Issuance) of the Company, (b) securities issued upon the exercise,
exchange, conversion or amendment of any securities issued and outstanding on
the date hereof, or (c) securities issued pursuant to acquisitions or strategic
transactions.
 
ARTICLE V.
MISCELLANEOUS
 
5.1           Fees and Expenses.  Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.  The Company
shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchaser.
 
5.2           Entire Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
 
5.3           Notices.  Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on a Business Day, (b) the next Business Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a
day that is not a Business Day or later than 5:30 p.m. (New York City time) on
any Business Day, (c) the 2nd Business Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual
receipt by the party to whom such notice is required to be given.  The address
for such notices and communications shall be as set forth on the signature pages
attached hereto.
 
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5.4           Amendments; Waivers.  Except as otherwise set forth herein, any
provision of this Agreement may be waived, modified, supplemented or amended in
a written instrument signed by the Company and the Purchaser.  No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.
 
5.5           Headings.  The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
 
5.6           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns.  Neither the Company nor the Purchaser may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
(other than by merger).
 
5.7           No Third-Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
 
5.8           Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of
the State of California, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of Los Angeles.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of Los Angeles for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), 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, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding.  The parties hereby waive all
rights to a trial by jury.  If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
 
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5.9           Survival.  The representations and, warranties, shall survive the
Closing and the delivery, of the Securities, for the applicable statue of
limitations.
 
5.10           Execution.  This 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 the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
 
5.11           Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
 
5.12           Remedies.  In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Purchaser
and the Company will be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agrees to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.
 
5.13           Construction. The parties agree that each of them and/or their
respective counsel has reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.
 
5.14           Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.
 
 (Signature Pages Follow)
 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
CYBERDEFENDER CORPORATION
   
Address for Notice:
                     
By:  /s/ Gary Guseinov

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Name:  Gary Guseinov
Title:  Chief Executive Officer
   
617 West 7th Street, Suite 401
Los Angeles CA 90017
Fax:  213.689.8640
           
With a copy to (which shall not constitute notice):
               
Richardson & Patel, LLP
       
10900 Wilshire Blvd., Suite 500
       
Los Angeles, CA 90024
       
Fax:  310.208.1154
       
Attention:  Kevin Friedmann
       

 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
 
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[PURCHASER SIGNATURE PAGE TO
CYBERDEFENDER SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned has caused this Securities Purchase
Agreement to be duly executed by its authorized signatory as of the date first
indicated above.
 
SHIMSKI L.P.
   
Address for Notice:
                     
By:  /s/ Boris Shimanovsky

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Name:  Boris Shimanovsky
Title:  Managing Partner
   
SHIMSKI L.P.
c/o Shim & Sons Enterprises, Inc.
1223 Wilshire Blvd. #307
Santa Monica, CA. 90403
Attention: Boris Shimanovsky
           
With a copy to (which shall not constitute notice):
 
c/o Stanislawski & Harrison
301 N. Lake Avenue Suite 900
Pasadena, CA. 91101
Attention: Gregory Stanislawski
Fax : 626-793-3631
     

 
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Schedule 3.1 (d) – No Conflicts

Certain of the Company’s outstanding convertible debentures and warrants contain
conversion and exercise price adjustment provisions in the event the Company
issues Common Stock or Common Stock Equivalents below the current market price
of the Common Stock.  The conversion and exercise price adjustment in these
instruments will be approximately $0.01 from $0.99 to $0.98.

Schedule 3.1 (g) – Capitalization

As of June 10, 2009, the Company has approximately 21,700,000 shares of Common
Stock issued and outstanding.  Since March 31, 2009, the Company has granted
options and warrants to purchase a total of approximately 1,500,000 shares of
Common Stock.  In addition, approximately 1,350,000 warrants have been exercised
for cash or cashless since March 31, 2009 and the shares have been reflected
above in the total number of shares issued and outstanding.

Certain of the Company’s outstanding convertible debentures and warrants contain
conversion and exercise price adjustment provisions in the event the Company
issues Common Stock or Common Stock Equivalents below the current market price
of the Common Stock.  The price adjustment in these instruments will be
approximately $0.01 from $0.99 to $0.98.  

Schedule 3.1 (k) – Compliance

The Company has $396,671 in outstanding principal amount of its 10% Secured
Convertible Debentures and $137,588 in outstanding principal of its 10%
Convertible Debentures.  The Company is delinquent in the payment of
approximately $100,000 of interest accrued on these debentures, which interest
was due April 1, 2009 and January 1, 2009.   As a result of the delinquency of
these interest payments, there exists an Event of Default under the Company’s
10% Secured Convertible Debentures and 10% Convertible Debentures.

The Company is currently responding to the City of Los Angeles in relation to an
audit of its business tax payments for the periods 2005-2007.  The Company
expects is liability to the City of Los Angeles to be in the range of $25,000 to
$100,000.
 
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