SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of September 30, 2009 among CyberDefender Corporation, a California
corporation (the “Company”), and the
purchaser identified on the signature page hereto (the “Purchaser”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and
Rule 506 promulgated thereunder, the board of directors of the Company has
authorized the sale and issuance to the Purchaser and other purchasers who are
“accredited investors”  within the meaning of Rule 501 under the
Securities Act (collectively, the “Other Purchasers”,
and together with the Purchaser, the “Purchasers”) of up to
$2,000,000 in aggregate principal amount of the Company’s 8% Secured Convertible
Promissory Notes, subject to the terms and conditions of this form of 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 each Purchaser agree as
follows:

     

    ARTICLE
I.

    DEFINITIONS

     

    1.1           Definitions.  In
addition to the terms defined elsewhere in this Agreement: (a) capitalized terms
that are not otherwise defined herein have the meanings given to such terms in
the Notes (as defined herein), and (b) 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 a 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
and, upon the Company becoming listed or quoted on a Trading Market, except 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
Securities and Exchange Commission.

     

    “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.

     

    “Conversion Price”
shall have the meaning ascribed to such term in the Notes.

     

     “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 assigned to such term in Section
3.1(b).

     

    “Material Permits”
shall have the meaning ascribed to such term in Section 3.1(m).

     

    “Maximum Rate” shall
have the meaning ascribed to such term in Section 5.16.

     

    “Notes” means the 8%
Secured Convertible Promissory Notes in the form of Exhibit A attached
hereto due, subject to the terms therein, April 1, 2011, issued by the Company
to the Purchasers pursuant to this form of Agreement.

     

    “Note Shares” mean the
shares of Common Stock issuable upon conversion of the Notes, including any
shares of Common Stock issued in payment of interest thereunder.

     

    “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.

     

    
      
        
        

      

      
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     “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.

     

    “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

     

    “Required Minimum”
means, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Transaction
Documents, including any Note Shares (including Note Shares issuable as payment
of interest), ignoring any conversion or exercise limits set forth
therein.

     

    “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
Notes and the Note Shares.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated hereunder.

     

    “Security Agreement”
means the Security Agreement between the Company, the Purchaser and the Other
Purchasers in the form of Exhibit B
hereto.

     

    “Short Sales” shall
include all “short sales” as defined in Rule 200 of Regulation SHO under the
Exchange Act (but shall not be deemed to include the location and/or reservation
of borrowable shares of Common Stock). 

     

    “Subscription Amount”
means the aggregate amount to be paid for the Note purchased hereunder as
specified below the Purchaser’s name on the signature page of this Agreement and
next to the heading “Subscription Amount”, in United States Dollars and in
immediately available funds.

     

    “Subsidiary” means any
subsidiary of the Company as set forth on Schedule
3.1(a).

     

    “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 form of Agreement, the Security Agreement, the
Notes, and any other documents or agreements executed by the Purchasers in
connection with the transactions contemplated hereby.

     

    
      
        
        

      

      
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    “Transfer Agent”
means Continental Stock Transfer & Trust Company, with a mailing address of
17 Battery Place, New York, NY 10004 and a facsimile number of (212) 616-7616,
and any successor transfer agent of the Company.

     

    “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Business Day from 9:30 a.m.
New York City time to 4:02 p.m. New York City time); (b)  if the OTC
Bulletin Board is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin
Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Holder and reasonably acceptable to the Company, the fees and
expenses of which shall be paid by the Company.

     

    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, a Note in principal amount of the Subscription Amount.  The
Purchaser shall deliver to the Company immediately available funds via wire
transfer equal to the Subscription Amount, the Company shall deliver to the
Purchaser the Purchaser’s Note 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;

            


    

     

    
      (ii)          a Note in
the principal amount equal to the Subscription Amount, registered in the name of
the Purchaser; and

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Security Agreement, duly executed by the
  Company.

            


    

    


    (b)          On
the Closing Date, the Purchaser shall deliver or cause to be delivered to the
Company the following:

     

    
      
        
        

      

      
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              (i)

            	
               this
      Agreement duly executed by the
Purchaser;

            


    

     

    (ii)           the  Subscription
Amount by wire transfer to the Company in accordance with the wire instructions
set forth on Annex
A attached hereto; and

     

    (iii)          the
Security Agreement, duly executed by the Purchaser.

     

    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 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 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 the
date hereof; 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 each Purchaser, makes it impracticable or inadvisable to
purchase the Note 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, the Company hereby makes the following representations and warranties
to the Purchaser.

     

    (a)           Subsidiaries.  The
Company has no subsidiaries, therefore all references in the Transaction
Documents to the Subsidiaries or any of them in the Transaction Documents shall
be disregarded.

     

    (b)           Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries 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 and the
Subsidiaries, 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.  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 or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) subject to the Required Approvals, conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary, 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 or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, 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 or a
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
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
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 the applicable Transaction Documents,
will be duly and validly issued, fully paid and non-assessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents.  The Note Shares, when issued in
accordance with the terms of the Transaction Documents, will be validly issued,
fully paid and non-assessable, free and clear of all Liens imposed by the
Company.  The Company has reserved from its duly authorized capital
stock a number of shares of Common Stock for issuance of the Note Shares at
least equal to the Required Minimum on the date hereof.

     

    
      
        
        

      

      
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    (g)           Capitalization.  The
capitalization of the Company is as disclosed in its Quarterly Report on Form
10-Q for the three months ended June 30, 2009.  Except as a result of
the purchase and sale of the Securities or otherwise as set forth 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 any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock Equivalents. 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
Purchasers) 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. 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.  The
Company has at least 40 shareholders of Common Stock of record prior to the date
hereof.

     

    (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 Quarterly Reports on Form 10-Q for the periods ended
March 31 and June 30, 2009; and any amendments thereto.  As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), 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 on the Company, its business, financial condition or results of
operations).  Except as and to the extent set forth on the balance
sheet of the Company as of June 30, 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).

     

    
      
        
        

      

      
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    (i)           Material
Changes.  Since June 30, 2009, except as disclosed as a
subsequent event in the Company’s Quarterly Report on Form 10-Q for the three
months ended June 30, 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 equity incentive plans.

     

    (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, any Subsidiary or any of their respective 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 Subsidiary, 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.

     

    3.2          Representations and
Warranties of the Purchasers.    Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

     

    (a)           Organization;
Authority.  If the Purchaser is not an individual, the
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate or partnership 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 corporate or similar action on the
part of the Purchaser if the Purchaser is not an individual.  Each
Transaction Document to which it is a party 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.

     

    
      
        
        

      

      
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    (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
(this representation and warranty not limiting the Purchaser’s right to sell the
Securities in compliance with applicable federal and state securities laws) in
violation of the Securities Act or any applicable state securities
law.  The Purchaser is acquiring the Securities hereunder in the
ordinary course of its business if the Purchaser is an entity.

     

    (c)           Purchaser
Status.  At the time the Purchaser was offered the Securities,
it was, and at the date hereof it is, and on each date on which it converts any
Notes it will be either: (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 so 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.

     

    
      
        
        

      

      
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    (g)           Broker’s
Fees.  Purchaser acknowledges and agrees that the Company may
compensate its placement agent, 1st
Worldwide Financial Partners, LLC (“1st Worldwide”), in the amount of up to 7%
of the Purchaser’s Subscription Amount plus a 3-year warrant to purchase up to
3.5% of the number of shares of Common Stock into which the Purchaser’s Note may
be converted as of the Closing Date at an exercise price of $2.05 per share, but
only if 1st
Worldwide or its sub-agents introduced the Purchaser to the
Company.  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.

     

    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 a 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
a Purchaser under this Agreement and the Registration Rights
Agreement.

     

    (b)           The
Purchasers agree to the imprinting, so long as is required by this Section 4.1,
of a legend on the Note in the following form:

     

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS
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.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    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.

     

    (c)           If
all or any portion of a Note or is converted at a time when the applicable Note
Shares may be sold under Rule 144(b)(1)(i) or if such legend is not otherwise
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) then
such Note Shares shall be issued free of all legends.  The Company
agrees that at such time as such legend is no longer required under this Section
4.1(c), it will, no later than five Business Days following the delivery by a
Purchaser to the Company or the Company’s transfer agent of a certificate
representing Note Shares, as applicable, issued with a restrictive legend,
deliver or cause to be delivered to the Purchaser a certificate representing
such shares that is free from all restrictive and other legends.

     

    (d)           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          Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the sale
of the Securities to the Purchasers or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any
Trading Market.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    4.3          Conversion
Procedures.  The form of Notice of Conversion included in the
Notes set forth the
totality of the procedures required of the Purchasers in order to convert the
Notes.  No additional legal opinion or other information or
instructions shall be required of the Purchasers to convert their
Notes.  The Company shall honor conversions of the Notes and shall
deliver Note Shares in accordance with the terms, conditions and time periods
set forth in the Transaction Documents.

     

    4.4          Securities Laws Disclosure;
Publicity.  The Company shall not consult with Purchasers in
issuing any press releases with respect to the transactions contemplated hereby.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any 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 in
connection with (A) any registration statement and (B) the filing of final
Transaction Documents (including signature pages thereto) with the Commission
and (ii) to the extent such disclosure is required by law or Trading Market
regulations.

     

    4.5          Non-Public
Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto the Purchaser shall have executed a written agreement regarding
the confidentiality and use of such information.  The Company
understands and confirms that each Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the
Company.

     

    4.6          [Intentionally
Ommitted]

     

    4.7          Reservation and Listing of
Securities.

     

    (a)           The
Company shall maintain a reserve from its duly authorized shares of Common Stock
for issuance pursuant to the Transaction Documents in such amount as may be
required to fulfill its obligations in full under the Transaction
Documents.

     

    (b)           If,
on any date, the number of authorized but unissued (and otherwise unreserved)
shares of Common Stock is less than the Required Minimum on such date, then the
Board of Directors of the Company shall use commercially reasonable efforts to
amend the Company’s certificate or articles of incorporation to increase the
number of authorized but unissued shares of Common Stock to at least the
Required Minimum at such time, as soon as possible and in any event not later
than the 75th day after such date.

     

    (c)           The
Company shall, if applicable: (i) in the time and manner required by the
principal Trading Market, prepare and file with such Trading Market an
additional shares listing application covering a number of shares of Common
Stock at least equal to the Required Minimum on the date of such application,
(ii) take all steps necessary to cause such shares of Common Stock to be
approved for listing on such Trading Market as soon as possible thereafter, if
required, (iii) provide to the Purchasers evidence of such listing, if
applicable, and (iv) maintain the listing of such Common Stock on any date at
least equal to the Required Minimum on such date on such Trading Market or
another Trading Market.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    4.8          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 Purchasers 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.

     

    ARTICE
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 Purchasers.

     

    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.

     

    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 Purchasers holding at least 51% in
principal amount of the then-outstanding Notes.  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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    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 Purchase 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 or 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.  Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law.  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.

     

    5.9           Survival.  The
representations and, warranties, shall survive the Closing and the delivery, of
the Securities, for the applicable statue of limitations.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    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           Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then the Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights; provided, however, in the case
of a rescission of a conversion of a Note, the Purchaser shall be required to
return any shares of Common Stock subject to any such rescinded conversion
notice.

     

    5.13           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.

     

    5.14           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.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    5.15           Payment Set Aside. To
the extent that the Company makes a payment or payments to the Purchaser
pursuant to any Transaction Document or the Purchaser enforces or exercises its
rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

     

    5.16           Usury.  To
the extent it may lawfully do so, the Company hereby agrees not to insist upon
or plead or in any manner whatsoever claim, and will resist any and all efforts
to be compelled to take the benefit or advantage of, usury laws wherever
enacted, now or at any time hereafter in force, in connection with any claim,
action or proceeding that may be brought by the Purchaser in order to enforce
any right or remedy under any Transaction Document to which the Purchaser is a
party.  Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total
liability of the Company under the Transaction Documents for payments in the
nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the “Maximum Rate”), and,
without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the
nature of interest that the Company may be obligated to pay under the
Transaction Documents exceed such Maximum Rate.  It is agreed that if
the maximum contract rate of interest allowed by law and applicable to the
Transaction Documents is increased or decreased by statute or any official
governmental action subsequent to the date hereof, the new maximum contract rate
of interest allowed by law will be the Maximum Rate applicable to the
Transaction Documents from the effective date forward, unless such application
is precluded by applicable law.  If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to the
Purchaser with respect to indebtedness evidenced by the Purchaser’s Transaction
Documents, such excess shall be applied by the Purchaser to the unpaid principal
balance of any such indebtedness or be refunded to the Company, the manner of
handling such excess to be at the Purchaser’s election.

     

    5.17           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.

     

    (Signature
Pages Follow)

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    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:

                    	 
      	 	
                      617
      West 7th Street, Suite 401

                    
	
                       

                    	
                      
                        Name:
      Gary Guseinov

                      

                    	 	
                      Los
      Angeles CA 90017

                    
	
                       

                    	
                      
                        Title:
      Chief Executive Officer

                      

                    	 	 
      
	 
      	 	 
      
	
                      With
      a copy to (which shall not constitute notice):

                    	 	 
      
	 
      	 	 
      
	
                      Richardson
      & Patel, LLP

                      152
      W. 57th
      Street, 4th
      Floor

                      New
      York, NY 10019

                      Attention:  Kevin
      Friedmann

                    	 	 
      


            

          

        

      

    

     

     [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    [PURCHASER
SIGNATURE PAGE TO

    CYBERDEFENDER
SECURITIES PURCHASE AGREEMENT]

    


    IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by its/his/her respective authorized signatories as of the
date first indicated above.

     

    Name of
Purchaser: ________________________________________________________

     

    Signature of Authorized Signatory of
Purchaser: __________________________________

     

    Name of
Authorized Signatory:
____________________________________________________

     

    Title of
Authorized Signatory:
_____________________________________________________

     

    Email
Address of Purchaser:
________________________________________________

     

    Facsimile
Number of Purchaser:
________________________________________________

     

    Address
for Notice of Purchaser:

     

     

    Address
for Delivery of Securities for Purchaser (if not same as above):

    
  

    Subscription
Amount:

     

     

    EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    ANNEX A

    


    WIRE
INSTRUCTIONS

    


    
      
        
          
            	
                    BANK NAME:

                  	
                    UNION
      BANK OF CALIFORNIA

                  
	 
      	
                    11661
      San Vicente Blvd, Los Angeles, CA  90049

                  
	 
      	
                    Telephone:

                  	
                    310
      571-4475

                  
	 
      	
                    Fax:

                  	
                    310
      826-1757

                  
	 
      	
                    ABA
      NUMBER:

                  	
                    122000496

                  
	 
      	
                    ACCT. NUMBER:

                  	
                    3000149615

                  
	 
      	
                    BENEFICIARY:

                  	
                    CYBERDEFENDER
      CORPORATION

                  


          

        

      

    

     

    
      
        
        

      

      
        20