Exhibit 10.1
 
SECURITIES PURCHASE AGREEMENT
 
THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of
__________________ by and among CyberDefender Corporation, a California
corporation (the “Company”), and the purchaser whose name and address is set
forth on the signature page annexed hereto (the “Purchaser”). The foregoing
parties are sometimes referred to hereinafter individually as a “Party” or
collectively as the “Parties.”
 
RECITALS
 
WHEREAS, pursuant to the Subscription Application of the Purchaser of even date
herewith (each a “Subscription Application”), and pursuant to Section 4(2) of
the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
promulgated thereunder, the Company desires to sell to the Purchaser and the
Purchaser desires to acquire from the Company that number of units of the
Company’s securities (the “Units”) as are set forth on the Purchaser’s signature
page annexed hereto, at a price of $25,000 per Unit, subject to the terms and
conditions of this Agreement and the other documents or instruments contemplated
hereby (the “Offering”); and
 
WHEREAS, each Unit consists of: (i) 25,000 shares of the Company’s common stock,
no par value (the “Common Stock”), and (ii) a warrant, in the form attached
hereto as Exhibit A, to purchase up to 18,750 shares of Common Stock at an
exercise price of $1.25 per share for a 5 year period commencing upon the
Closing (collectively, “Warrants”).
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties do hereby
covenant and agree as follows:
 
AGREEMENT
 
Section 1. Sale and Issuance of Units.
 
1.1 Subject to the terms and conditions of this Agreement, the Company has
authorized the sale and issuance of up to 80 Units. At the Closing, the Company
shall sell and issue to the Purchaser, and the Purchaser shall purchase from the
Company, the number of Units set forth on the Purchaser’s signature page hereto.
The Company intends to enter into this same form of purchase agreement with
certain other purchasers (collectively, the “Other Purchasers”) and expects to
complete sales of Units to them. The maximum number of Units that the Company
may sell to the Purchaser and Other Purchasers combined is 80. The Purchaser’s
obligations hereunder are expressly not subject to or conditioned on the
purchase of Units by any or all of such Other Purchasers.
 
1.2 The aggregate purchase price for the Units to be purchased by the Purchaser
(the “Purchase Price”) shall be the amount set forth on the Purchaser’s
signature page hereto.
 
Section 2. The Closing.
 
2.1 The closing of the sale and issuance to the Purchaser (the “Closing”) shall
take place on the date when the Company’s legal counsel, Richardson & Patel, LLP
(the “Escrow Agent”), receives all of the materials required pursuant to the
Escrow Agreement annexed hereto as Exhibit B (the “Escrow Agreement”),
including, without limitation, immediately available funds via wire transfer or
a certified check equal to the subscription amount set forth on the Purchaser’s
signature page hereto.
 
2.2 At the Closing, the Company shall instruct its transfer agent to issue and
deliver to the Purchaser a certificate representing the Common Stock, against
receipt by the Escrow Agent of a certified bank check or wire transfer in an
aggregate amount equal to the Purchase Price for the Units set forth on the
Purchaser’s signature page hereto.
 
 
 

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Section 3. Representations and Warranties of the Company.
 
The Company hereby represents and warrants to the Purchaser as follows:
 
3.1 Organization.
 
The Company is duly organized, validly existing and in good standing under the
laws of the State of California and is qualified to conduct its business as a
foreign corporation in each jurisdiction where the failure to be so qualified
would have a material adverse effect on the Company.
 
3.2 Authorization of Agreement, Etc.
 
The execution, delivery, and performance by the Company of its obligations under
this Agreement, the Escrow Agreement, the Subscription Application, the Warrants
and each other document or instrument contemplated hereby or thereby
(collectively, the “Transaction Documents”) has been duly authorized by all
requisite corporate action on the part of the Company; and this Agreement and
the Transaction Documents have been duly executed and delivered by the Company.
Each of the Transaction Documents, when executed and delivered by the Company,
constitutes the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium, or other similar
laws affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
 
3.3 Issuance of Common Stock and Warrants.
 
The Units are duly authorized and, when paid for and issued in accordance with
the Transaction Documents, will be duly and validly issued, fully paid, and
nonassessable, free and clear of all liens. The Company has reserved from its
duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to this Agreement and upon exercise of the Warrants.
 
Section 4. Representations and Warranties of the Purchaser.
 
The Purchaser hereby represents and warrants to the Company as follows:
 
4.1 Authorization of the Documents.
 
The Purchaser has all requisite power and authority (corporate or otherwise) to
execute, deliver, and perform its obligations under the Transaction Documents,
and the execution, delivery, and performance by the Purchaser of its obligations
under the Transaction Documents has been duly authorized by all requisite action
on the part of the Purchaser and each such Transaction Document, when executed
and delivered by the Purchaser, shall constitute the valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
 
4.2 Investment Representations.
 
All of the representations, warranties, and information of the Purchaser as set
forth in the Purchaser’s Subscription Application are incorporated by reference
herein, shall be deemed to be a part hereof, and shall be true and correct at
the Closing with the same force and effect as if made by the Purchaser as of the
date thereof.
 
 
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4.3 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 such
Purchaser desires (including the opportunity to meet with the Company’s
executive officers, either in person or telephonically). The Purchaser has
reviewed copies of all reports filed by the Company (the “Filings”) with the
Securities and Exchange Commission (the “Commission”) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), since July 19, 2007, and
has reviewed the Company’s Registration Statement on Form SB-2, as amended
(Commission file number 333-138430) (the “Registration Statement”), all of which
are available for review at www.sec.gov. The Purchaser further acknowledges that
it is familiar with the contents of the Filings and the Registration Statement,
including, without limitation, the risk factors contained in the Registration
Statement, and that there is no further information about the Company that the
Purchaser desires in determining whether to acquire the Units in the Offering.
 
Section 5. Brokers and Finders.

The Company is obligated to compensate its placement agent, Oceana Partners, LLC
(“Oceana”), in the amount of 7% of the gross proceeds of the Offering plus Unit
purchase options to purchase 7% of the number of Units issued in the Offering at
an exercise price of $1.00 per Unit, but only with respect to investments
sourced by Oceana or its sub-agents. 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.

Section 6. Indemnification By the Purchaser.

The Purchaser hereby agrees to indemnify and defend (with counsel acceptable to
the Company) the Company and its officers, directors, employees, and agents and
hold them harmless from and against any and all liability, loss, damage, cost,
or expense, including costs and reasonable attorneys’ fees, incurred on account
of or arising from:

(i) any breach of or inaccuracy in any of the Purchaser’s representations,
warranties, or agreements made herein, in any of the Transaction Documents, or
in any document or instrument contemplated hereby or thereby; and

(ii) any action, suit, or proceeding based on a claim that the Purchaser’s
representations, warranties or agreements made herein, in any of the Transaction
Documents, or in any document or instrument contemplated hereby or thereby, were
inaccurate or misleading, or otherwise cause for obtaining damages or redress
from the Company or any current or former officer, director, employee, or agent
of the Company under the Securities Act.

Section 7. Registration of Common Stock Underlying the Units.

Subject to Rule 415(a)(1) of the Securities Act, the Company shall use its best
efforts file with the Commission, as soon as practicable after the Closing, but
in no event later than 45 days from the Closing Date (the “Filing Date”), one
registration statement (the “Registration Statement”) on Form SB-2, or other
applicable form, providing for the resale of the shares of Common Stock issued
to the Purchaser at the Closing (but not the shares issuable upon exercise of
the Warrants) (collectively, the “Registrable Securities”) under the Securities
Act. The Company shall further use its best efforts to cause the Registration
Statement to be declared effective by the Commission as soon as practicable
thereafter, but in no event later than 90 days after the Filing Date (the
“Effectiveness Date”). In the event the Company does not file the Registration
Statement by the Filing Date, or the SEC does not declare it effective by the
Effectiveness Date, then the Company shall pay the Purchaser liquidated damages
equal to 1.5% of the Purchaser’s subscription amount for each applicable 30 day
period of delinquency, not to exceed an aggregate of 1.5% of the Purchaser’s
subscription amount hereunder in any 30-day period, and not to exceed an
aggregate of 18% of the Purchaser’s subscription amount hereunder pursuant to
this Section 7. All expenses incurred in connection with the registration of the
Registrable Securities, including without limitation, all registration, filing,
and qualification fees, printing expenses, and fees and disbursements of counsel
for the Company, shall be borne by the Company. The Company further agrees to
maintain the effectiveness of the Registration Statement until the earlier of
the date on which all of the Registrable Securities covered by the Registration
Statement are sold or are then eligible for resale pursuant to Rule 144(k) under
the Securities Act.
 
 
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The Company may postpone for up to thirty (30) days the filing or the
effectiveness of the Registration Statement if the Company reasonably determines
that the Registration Statement would have a material adverse effect on any
proposal or plan by the Company to engage in any acquisition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer, reorganization or similar transaction.

Section 8. Anti-Dilution Protection
 
From and after the date of this Agreement, in the event the Company sells Common
Stock for less than $1.00 per share or issues securities convertible into or
exercisable for Common Stock at a conversion price or exercise price less than
$1.00 per share (a “Dilutive Issuance”), then the Company will issue the number
of additional shares of Common Stock to the Purchaser, without additional
consideration, equal to the product of the Purchaser’s subscription amount
hereunder multiplied by a fraction, the numerator of which is the number of
shares of Common Stock sold and issued at the closing of such Dilutive Issuance
plus the number of shares which the aggregate offering price of the total number
of shares of Common Stock sold and issued at the closing of such Dilutive
Issuance would purchase at $1.00 per share, and the denominator of which is the
number of shares of Common Stock issued and outstanding on the date of such
Dilutive Issuance plus the number of additional shares of Common Stock sold and
issued at the closing of such Dilutive Issuance. Notwithstanding the foregoing,
no additional shares will be issued hereunder in respect of an Exempt Issuance.
“Exempt Issuance” means (i) Common Stock or options issued pursuant to a board
approved equity incentive plan, (ii) Common Stock issued upon the exercise or
conversion of options, warrants or convertible debentures outstanding on the
Closing Date, and (iii) securities issued in connection with strategic
transactions the primary purpose of which is not to raise capital.
 
Section 9. Successors and Assigns.
 
This Agreement shall bind and inure to the benefit of the Company, the
Purchaser, and their respective successors and assigns.
 
Section 10. Entire Agreement.
 
This Agreement and the other writings and agreements referred to in this
Agreement or delivered pursuant to this Agreement contain the entire
understanding of the Parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, whether written or verbal,
among the Parties with respect thereto.
 
Section 11. Notices.
 
All notices, demands and requests of any kind to be delivered to any Party in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if personally delivered or if sent by internationally-recognized
overnight courier or by registered or certified mail, return receipt requested
and postage prepaid, addressed as follows:
 
if to the Company, to:
 
CyberDefender Corporation
617 7th Street, Suite 401
Los Angeles CA 90017
Attention: Chief Executive Officer
 
 
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with a copy to:

Richardson & Patel LLP
The Chrysler Building
405 Lexington Avenue, 26th Floor
New York, New York 10174
Attention Kevin Friedmann

if to the Purchaser, to:
 
at the address of the Purchaser set forth on the Purchaser’s signature page
hereto;

or to such other address as the Party to whom notice is to be given may have
furnished to the other Parties to this Agreement in writing in accordance with
the provisions of this Section. Any such notice or communication shall be deemed
to have been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of internationally-recognized overnight courier, on
the next business day after the date when sent and (iii) in the case of mailing,
on the third business day following that on which the piece of mail containing
such communication is posted.
 
Section 12. Amendments.
 
This Agreement may not be modified or amended, nor may any provision of this
Agreement be waived, except as evidenced by a written agreement duly executed by
the holders of at least 66% of the Common Stock and shares underlying Warrants
issued to the Purchaser and all Other Purchasers combined.
 
Section 13. Governing Law; Waiver of Jury Trial.
 
All questions concerning the construction, interpretation, and validity of this
Agreement shall be governed by and construed and enforced in accordance with the
domestic laws of the State of New York without giving effect to any choice or
conflict of law provision or rule (whether in the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York. In furtherance of the foregoing, the internal
law of the State of New York will control the interpretation and construction of
this Agreement, even if under such jurisdiction’s choice of law or conflict of
law analysis, the substantive law of some other jurisdiction would ordinarily or
necessarily apply.
 
Section 14. Submission to Jurisdiction.
 
Any legal action or proceeding with respect to this Agreement may be brought in
the courts of the State of California and the United States of America located
in the City of Los Angeles, California and, by execution and delivery of this
Agreement, the Company hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Purchaser hereby irrevocably waives, in connection with any such action or
proceeding, any objection, including, without limitation, any objection to the
venue or based on the grounds of forum non conveniens, which it may now or
hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions. The Purchaser hereby irrevocably consents to the
service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at its address as set forth herein.
 
Section 15. Severability.
 
It is the desire and intent of the Parties that the provisions of this Agreement
be enforced to the fullest extent permissible under the law and public policies
applied in each jurisdiction in which enforcement is sought. Accordingly, in the
event that any provision of this Agreement would be held in any jurisdiction to
be invalid, prohibited, or unenforceable for any reason, such provision, as to
such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited, or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
 
 
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Section 16. Independence of Agreements, Covenants, Representations and
Warranties.
 
All agreements and covenants hereunder shall be given independent effect so that
if a certain action or condition constitutes a default under a certain agreement
or covenant, the fact that such action or condition is permitted by another
agreement or covenant shall not affect the occurrence of such default, unless
expressly permitted under an exception to such covenant. In addition, all
representations and warranties hereunder shall be given independent effect so
that if a particular representation or warranty proves to be incorrect or is
breached, the fact that another representation or warranty concerning the same
or similar subject matter is correct or is not breached will not affect the
incorrectness of or a breach of a representation and warranty hereunder. The
exhibits and any schedules annexed hereto are hereby made part of this Agreement
in all respects.
 
Section 17. Counterparts. 
 
This Agreement may be executed in any number of counterparts, and each such
counterpart of this Agreement shall be deemed to be an original instrument, but
all such counterparts together shall constitute but one agreement. Facsimile
counterpart signatures to this Agreement shall be acceptable and binding.
 
Section 18. Headings.
 
The section and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
 
Section 19. Expenses. 
 
Each Party shall pay its own fees and expenses incurred in connection with the
negotiation, execution, delivery and performance of this Agreement, the
Transaction Documents and any document or instrument contemplated hereby or
thereby.
 
Section 20. Preparation of Agreement.
 
The Company prepared this Agreement and the Transaction Documents solely on its
behalf. Each Party to this Agreement acknowledges that: (i) the Party had the
advice of, or sufficient opportunity to obtain the advice of, legal counsel
separate and independent of legal counsel for any other Party hereto; (ii) the
terms of the transactions contemplated by this Agreement are fair and reasonable
to such Party; and (iii) such Party has voluntarily entered into the
transactions contemplated by this Agreement without duress or coercion. Each
Party further acknowledges that such Party was not represented by the legal
counsel of any other Party hereto in connection with the transactions
contemplated by this Agreement, nor was he or it under any belief or
understanding that such legal counsel was representing his or its interests.
Each Party agrees that no conflict, omission, or ambiguity in this Agreement, or
the interpretation thereof, shall be presumed, implied, or otherwise construed
against any other Party to this Agreement on the basis that such Party was
responsible for drafting this Agreement.

 
* * * * *
 

 
[SIGNATURE PAGES FOLLOW]
 
 
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IN WITNESS WHEREOF, each of the undersigned has duly executed this Securities
Purchase Agreement as of the date first written above.
 
 

       
COMPANY:

CYBERDEFENDER CORPORATION
 
   
   
    By:      

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Name: Gary Guseinov
Title: Chief Executive Officer
   

 

 
[PURCHASER’S SIGNATURE PAGE FOLLOWS]
 
 
 

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[PURCHASER SIGNATURE PAGE TO CYBERDEFENDER CORPORATION
SECURITIES PURCHASE AGREEMENT]
 

PURCHASER:                 Name of Purchaser (Individual or Institution)   Name
of Individual representing Purchaser (if an Institution)                   Title
of Individual representing Purchaser (if an Institution)   Signature of
Individual Purchaser or Individual representing Purchaser             Address:  
        Telephone:           Facsimile:                 Number of Units        
        Aggregate Purchase Price    

 
 
 

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EXHIBIT A

Form of Warrant

 
 

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EXHIBIT B

Escrow Agreement
 
 
 

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