CONSULTING AGREEMENT

 
This Consulting Agreement, dated as of April 1, 2009 (“Agreement”), is entered
into between SCP Holdings L.L.C.  (“Consultant”) and CyberDefender Corporation,
a California corporation (“Client”).
 
The Consultant is in the business of providing management consulting services,
business advisory services.  The Client deems it to be in its best interest to
retain the Consultant to render to the Client such services as may be agreed to
by the parties from time to time; and the Consultant desires to render such
services to the Client as set forth hereunder.
 
Now therefore, in consideration of the mutual promises and covenants set forth
in this Agreement, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

Consulting Services.  The Client hereby retains the Consultant as an independent
contractor, and the Consultant hereby accepts and agrees to such retention.  It
is further acknowledged and agreed by the Client that the Consultant is not
rendering legal or tax advice. The services of the Consultant shall not be
exclusive nor shall the Consultant be required to render any specific number of
hours or assign specific personnel to the Client or its projects.

Independent Contractor.  The Consultant agrees to perform its consulting duties
hereto as an independent contractor.  Nothing contained herein shall be
considered to create an employer-employee relationship between the parties to
this Agreement.  The Client shall not make social security, workers’
compensation or unemployment insurance payments on behalf of Consultant.  The
parties hereto acknowledge and agree that the Consultant cannot guarantee the
results or effectiveness of any of the services rendered or to be rendered by
the Consultant.  Rather, Consultant shall conduct its operations and provide its
services in a professional manner and in accordance with good industry
practice.  The Consultant will use its reasonable business efforts in providing
services to Client.
 
Time, Place and Manner of Performance.  The Consultant shall be available to the
officers and directors of the Client at such reasonable and convenient times and
places as may be mutually agreed upon.  Except as aforesaid, the time, place and
manner of performance of the services hereunder, including the amount of time to
be allocated by the Consultant to any specific service, shall be determined in
the sole discretion of the Consultant.
 
Compensation.   The Client shall provide to the Consultant compensation for its
services hereunder in the amounts and at the times as set forth as
follows.  Upon execution of this Agreement the Consultant will receive warrants
(the “Warrants”) to purchase 850,000 shares of common stock (the “Shares”) of
the Client, exercisable at a price of $1.25 per share for a period ending on the
fifth anniversary date of this Agreement in the form attached hereto as Exhibit
A.  The Warrants shall vest as follows: Warrants to purchase 300,000 Shares
shall vest immediately upon the execution of this Agreement and Warrants to
purchase 50,000 Shares shall vest on the 1st day of each month commencing May
1st and ending March 2010.  The Warrants shall vest provided that this Agreement
has not been terminated as set forth below.  The Warrants shall be assignable by
the Client as provided in the Warrant.  By executing this Agreement, the Client
warrants and represents that all necessary corporate action has been taken to
authorize the issuance of the Warrants and to provide for the issuance of the
Shares of common stock issuable thereunder.  The Client agrees that the Warrants
will be delivered to Consultant immediately following the execution of this
Agreement.  The Shares issuable upon exercise of the Warrants shall be fully
paid and non-assessable.  The Client agrees that the initial grant of the
Warrants is a non-refundable retainer.  In the event the Client decides to
terminate this Agreement for any reason whatsoever, it is agreed and fully
understood that the Consultant will not be requested by the Client to return any
of the Warrants which have vested or the Shares issued upon exercise thereof.
 
1

--------------------------------------------------------------------------------

 
Termination.  Either the Consultant or the Client may terminate this Agreement
at the end of any month during the term of this Agreement upon 15 days prior
written notice.  This Agreement shall automatically terminate upon the
dissolution, bankruptcy or insolvency of the Client or the Consultant.  The
Consultant and the Client shall have the right and the discretion to terminate
this Agreement should the other party, in performing its duties hereunder,
violate any law, ordinance, permit or regulation of any governmental entity or
self-regulatory organization, accept for violations that either singularly or in
the aggregate do not have or will not have a materially adverse effect on the
party desiring termination.  

Work Product.  It is agreed that all information and materials produced for the
Client shall be the property of the Client, free and clear of all claims thereto
by the Consultant, and the Consultant has no claim of ownership rights
thereto.  Consultant shall not disseminate or publish any materials regarding
Client without Client’s prior written consent, which consent may be in the form
of an email from the Client’s Chief Executive Officer.
 
Confidentiality.  The Consultant shall enter into the Confidentiality Agreement
attached hereto as Exhibit B concurrently with the execution of this Agreement.
 
Conflict of Interest.  The Consultant shall be free to perform services for
other entities or persons.  The Consultant will notify the Client of its
performance of consulting services for any other entity or person that the
Consultant reasonably believes could materially conflict with its obligations to
the Client under this Agreement.
 
Disclaimer of Responsibility for Acts of the Client; Limitation on
Liability.  In no event shall the Consultant be authorized or required by this
Agreement to represent or make management decisions for the Client.  The
Consultant shall, under no circumstances, be made liable for any expense
incurred or loss suffered by the Client as a consequence of such decisions by
the Client or any affiliates or subsidiaries of the Client as a result of
services performed by the Consultant hereunder.  CONSULTANT DISCLAIMS ANY AND
ALL WARRANTIES RESPECTING THE SERVICES AND ACTIVITIES, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  IN NO EVENT
SHALL CONSULTANT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO THE SERVICES TO BE PROVIDED
UNDER THIS AGREEMENT, HOWEVER CAUSED, EVEN IF CONSULTANT HAS BEEN ADVISED OF THE
POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES, EXCEPT AS PROVIDED UNDER THE
PARAGRAPH BELOW TITLED “INDEMNIFICATION”.   IN NO EVENT SHALL CONSULTANT’S
LIABILITY FOR DAMAGES UNDER OR RELATING TO THIS AGREEMENT, REGARDLESS OF HOW
ARISING, EXCEED THE VALUE OF THE COMPENSATION PAID TO CONSULTANT HEREUNDER.
 
2

--------------------------------------------------------------------------------

 
Indemnification.  Each party agrees to indemnify and hold harmless the other
party, as well as each of its officers, directors, employees, agents and each
person, if any, who controls that party, against any and all liability, loss,
costs, expenses or damages, including, but not limited to, any and all expenses
reasonably incurred in investigating, preparing or defending against any
litigation or arbitration, commenced or threatened, directly resulting by reason
of any act, neglect, default or omission, or any untrue or allegedly untrue
statement of a material fact, or any misrepresentation of any material fact, or
any breach of any material warranty or covenant, by that party or any of its
agents, employees, or other representatives, arising out of, or in relation to,
this Agreement.  Notwithstanding the foregoing, in no event shall the liability
of Consultant or Client exceed the fair market value of the compensation
actually received by Consultant pursuant to this Agreement, using the
Black-Scholes valuation method as of the date of this Agreement or the date of
determination of such liability, whichever is greater.

Notices.  Any notices required or permitted to be given under this Agreement
shall be sufficient if in writing and delivered or sent by fax, registered or
certified mail, or by Federal Express or other nationally recognized overnight
couriers to the principal office of each party and addressed to its principal
executive officer at the address set forth on the signature page to this
Agreement. Faxes should be marked for the attention of the principal executive
officer and sent to the fax number set forth on the signature page to this
Agreement.
 
Waiver of Breach.  Any waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach by such party.
 
Assignment.  Neither party may assign this Agreement without the written consent
of the other party.
 
Applicable Law; Dispute Resolution.  It is the intention of the parties hereto
that this Agreement and the performance hereunder and all suits and special
proceedings hereunder be construed in accordance with and pursuant to the laws
of the State of California and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with, or by reason
of this Agreement, the laws of the State of California, without regard to
conflicts of law principles, shall be applicable.  The parties agree to submit
all litigation arising hereunder to the state or federal courts located in the
City of Los Angeles, California, and consent to the jurisdiction and venue of
such courts, and further waive any objection that such courts are an
inconvenient forum.  In no event shall either party be liable for punitive
damages.
 
3

--------------------------------------------------------------------------------

 
Severability.  All Agreements and covenants contained herein are severable, and
in the event any of them shall be held to be invalid by any competent court, the
Agreement shall be interpreted as if such invalid Agreements or covenants were
not contained herein.
 
Entire Agreement.  This Agreement constitutes and embodies the entire
understanding and Agreement of the parties and supercedes and replaces all prior
understandings, Agreements and negotiations between the parties.
 
Waiver and Modification.  Any waiver, alteration, or modification of any of the
provisions of this Agreement shall be valid only if made in writing and signed
by the parties hereto.
 
Counterparts and Facsimile Signature.  This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original but all of which, taken together, shall constitute one and the same
instrument.  Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party.

[SIGNATURES FOLLOW]
 
4

--------------------------------------------------------------------------------

By signing below, the parties agree to the terms of this Agreement and further
certify that their respective signatories are duly authorized to execute this
Agreement.

CYBERDEFENDER CORPORATION      Dated: _____________                
By: 

--------------------------------------------------------------------------------

Name:  Gary Guseinov    
Title:  Chief Executive Officer
   
 
        Address:    617 West 7h Street, Suite 401      
Los Angeles, California 90017
              Telephone: 213-689-8631 ext 212       Fax:            213-689-8639
     

 

 

SCP Holdings LLC.     Dated: _____________                
By: 

--------------------------------------------------------------------------------

Name:     
Title:
   
 
        Address:   223 Excalibur Drive      
Newtown Square , PA 19073
              Telephone:  ______________       Fax:  ____________________      

 
5

--------------------------------------------------------------------------------