Unassociated Document


    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.

     

    
      
        	
                Certificate
      No. WC-138

              	
                Warrant
      to Purchase 1,000,000 Shares
      of

              
	
                Dated:  November
      7, 2008

              	
                Common
      Stock (subject to adjustment)

              


      

    

     

    WARRANT
TO PURCHASE COMMON STOCK

    of

    CYBEDEFENDER
CORPORATION

    Void
after November 7, 2013

     

    This
certifies that, for value received, Guthy-Match LLC, or registered
assigns (“Holder”) is entitled, subject to the terms set forth below, to
purchase from CyberDefender Corporation (the “Company”), California corporation,
1,000,000 shares of the
Common Stock, no par value, of the Company (the “Common Stock”), as constituted
on the date hereof (the “Warrant Issue Date”), upon surrender hereof, at the
principal office of the Company referred to below, with the subscription form
attached hereto duly executed, and simultaneous payment therefor in lawful money
of the United States or otherwise as hereinafter provided, at the Exercise Price
as set forth in Section 2 below. The number and character of such shares of
Common Stock and the Exercise Price are subject to adjustment as provided below.
The term “Warrant” as used herein shall include this Warrant any warrants
delivered in substitution or exchange therefor as provided
herein.  This Warrant is issued pursuant to the conditional letter of
intent agreement between the Company and the Holder, dated October 20,
2008.

     

    1.           Term of
Warrant.  Subject to the terms and conditions set forth herein,
this Warrant shall be exercisable, in whole or in part, during the term
commencing on the Warrant Issue Date and ending at 5:00 p.m., Eastern Standard
Time, on November 7,
2013, and shall be void thereafter.

     

    2.           Exercise
Price.  The exercise price at which this Warrant may be
exercised shall be $1.25
per share of Common Stock (the “Exercise Price”), as such Exercise Price may be
adjusted from time to time pursuant to Section 4 hereof.

     

    3.           Exercise of
Warrant.

     

    (a)           Method of
Exercise.  The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, at any time, or from time to
time, during the term hereof as described in Section 1 above, by the surrender
of this Warrant and the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder, at the principal office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the Holder at the address of the Holder appearing on the books of the
Company), upon (i) payment (A) in cash or by check acceptable to the Company,
(B) by cancellation by the Holder of indebtedness or other obligations of the
Company to the Holder, or (C) by a combination of (A) and (B), of the purchase
price of the shares to be purchased.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (b)           Issuance of
Shares.  This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
promptly as practicable on or after such date and in any event within seven (7)
days thereafter, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of shares issuable upon such exercise. In the event that this Warrant
is exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised.

     

    4.           No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. In lieu of any fractional share to
which the Holder would otherwise be entitled (after aggregating all shares that
are being issued upon such exercise), the Company shall make a cash payment
equal to the Exercise Price multiplied by such fraction.

     

    5.           Replacement of Warrant. On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement reasonably satisfactory in
form and substance to the Company or, in the case of mutilation, on surrender
and cancellation of this Warrant, the Company at its expense shall execute and
deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.

     

    6.           Rights of Stockholders.
Subject to Sections 9 and 11 of this Warrant, the Holder shall not be
entitled to vote or receive dividends or be deemed the holder of Common Stock or
any other securities of the Company that may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, or change of stock to no
par value, consolidation, merger, conveyance, or otherwise) or to receive notice
of meetings, or to receive dividends or subscription rights or otherwise until
this Warrant shall have been exercised as provided herein.

     

    7.           Transfer of
Warrant.

     

    (a)           Warrant Register. The Company
will maintain a register (the “Warrant Register”) containing the names and
addresses of the Holder or Holders.  Any Holder of this Warrant or any
portion thereof may change its address as shown on the Warrant Register by
written notice to the Company requesting such change.  Any notice or
written communication required or permitted to be given to the Holder may be
delivered or given by mail to such Holder as shown on the Warrant Register and
at the address shown on the Warrant Register.  Until this Warrant is
transferred on the Warrant Register of the Company, the Company may treat the
Holder as shown on the Warrant Register as the absolute owner of this Warrant
for all purposes, notwithstanding any notice to the contrary.

     

    (b)           Warrant Agent.  The
Company may, by written notice to the Holder, appoint an agent for the purpose
of maintaining the Warrant Register referred to in Section 7(a) above, issuing
the Common Stock or other securities then issuable upon the exercise of this
Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the
foregoing (the “Warrant Agent”).  Thereafter, any such registration,
issuance, exchange or replacement, as the case may be, shall be made at the
office of the Warrant Agent.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (c)           Transferability and Negotiability of
Warrant.  This Warrant may not be transferred or assigned in
whole or in part without compliance with all applicable federal and state
securities laws by the transferor and the transferee (including the delivery of
investment representation letters and legal opinions reasonably satisfactory to
the Company, if such are requested by the Company).  Subject to the
provisions of this Warrant with respect to compliance with the Securities Act of
1933, as amended (the “Act”), title to this Warrant may be transferred by
endorsement (by the Holder executing the Assignment Form annexed hereto) and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery.

     

    (d)           Exchange of Warrant Upon a
Transfer.  On surrender of this Warrant for exchange, properly
endorsed on the Assignment Form and subject to the provisions of this Warrant
with respect to compliance with the Act and with the limitations on assignments
and transfers contained in this Section 7, the Company at its expense shall
issue to or on the order of the Holder a new warrant or warrants of like tenor,
in the name of the Holder or as the Holder (on payment by the Holder of any
applicable transfer taxes) may direct, for the number of shares issuable upon
exercise hereof.

     

    (e)           Compliance with Securities
Laws.

     

    (i)       
The Holder of this Warrant, by acceptance hereof, acknowledges that this
Warrant and the shares of Common Stock to be issued upon exercise hereof are
being acquired for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Common Stock to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Act or any state securities laws.

        

    (ii)      
This Warrant and all shares of Common Stock issued upon exercise hereof
or conversion thereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.

     

    8.           Reservation of
Stock.  The Company covenants that during the term this Warrant
is exercisable, the Company will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of Common Stock
upon the exercise of this Warrant and, from time to time, will take all steps
necessary to amend its Certificate of Incorporation (the “Certificate”) to
provide sufficient reserves of shares of Common Stock issuable upon exercise of
this Warrant.  The Company further covenants that all shares of Common
Stock that may be issued upon the exercise of rights represented by this Warrant
and payment of the Exercise Price, all as set forth herein will be duly and
validly authorized and issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously therewith).  The
Company agrees that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    9.           Notices.

     

    (a)           Whenever
the Exercise Price or the shares purchasable hereunder shall be adjusted
pursuant to Section 11 hereof, the Company shall issue a certificate signed by
its Chief Financial Officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Exercise Price and the shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of such
certificate to be mailed (by first-class mail, postage prepaid) to the Holder of
this Warrant.

     

    (b)           In
case:

     

    (i)        the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant) for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

     

    (ii)  of any capital reorganization of the
Company, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation or
entity, or any conveyance of all or substantially all of the assets of the
Company to another corporation or entity, or

     

    (iii)  of any voluntary or involuntary
dissolution, liquidation or winding-up of the Company,

     

    then, and
in each such case, the Company will mail or cause to be mailed to the Holder or
Holders a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 10
days prior to the record date specified in (A) above or 20 days prior to the
date specified in (B) above.

     

    10.           Amendments and
Waivers.

     

    (a)           Except
as provided in Section 1 above and Section 10(b) below, this Warrant, or any
provision hereof, may be amended, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.

     

    (b)           Any
term or condition of this Warrant may be amended with the written consent of the
Company and the Holder.  Any amendment effected in accordance with
this Section 10(b) shall be binding upon the Holder and each future holder of
this Warrant and the Company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (c)           No
waivers of, or exceptions to, any term, condition or provision of this Warrant,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.

     

    11.           Adjustments. The Exercise
Price and the shares purchasable hereunder are subject to adjustment from time
to time as follows:

     

    (a)           Merger, Sale of Assets,
etc.  If at any time while this Warrant is outstanding and
unexpired there shall be (i) a reorganization (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), (ii) a merger or consolidation of the Company with or into another
corporation in which the Company is not the surviving entity, or a reverse
triangular merger in which the Company is the surviving entity but the shares of
the Company’s capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, or (iii) a sale or transfer of the Company’s
properties and assets as, or substantially as, an entirety to any other
corporation or other entity, then, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made so that the
holder of this Warrant shall thereafter be entitled to receive upon exercise of
this Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares of stock or other securities
or property of the successor corporation or other entity resulting from such
reorganization, merger, consolidation, merger, sale or transfer that a holder of
the shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 11.  The foregoing provision of this Section 11(a)
shall similarly apply to successive reorganizations, consolidations, mergers,
sales and transfers and to the stock or securities of any other corporation or
other entity that are at the time receivable upon the exercise of this
Warrant.  If the per-share consideration payable to the Holder for
shares in connection with any such transaction is in a form other than cash or
marketable securities, then the value of such consideration shall be determined
in accordance with the following:  fair market value of one share of
Common Stock shall be determined by the Company’s Board of Directors in good
faith; provided, however, that where there exists a public market for the Common
Stock at the time of such exercise, the fair market value of one share of Common
Stock shall be the average of the closing bid and asked prices of the Common
Stock quoted in the Over-The-Counter Market Summary or the last reported sale
price of the Common Stock or the closing price quoted on the NASDAQ stock market
or on any exchange on which the Common Stock is listed, whichever is applicable,
for the five (5) trading days prior to the date of determination of fair market
value. In all events, appropriate adjustment (as determined in good faith by the
Company’s Board of Directors) shall be made in the application of the provisions
of this Warrant with respect to the rights and interests of the Holder after the
transaction, to the end that the provisions of this Warrant shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this
Warrant.

     

    (b)           Reclassification,
etc.  If the Company, at any time while this Warrant remains
outstanding and unexpired, by reclassification of securities or otherwise, shall
change any of the securities as to which purchase rights under this Warrant
exist into the same or a different number of securities of any other class or
classes, this Warrant shall thereafter represent the right to acquire such
number and kind of securities as would have been issuable as the result of such
change with respect to the securities that were subject to the purchase rights
under this Warrant immediately prior to such reclassification or other change
and the Exercise Price therefor shall be appropriately adjusted, all subject to
further adjustment as provided in this Section 11.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (c)           Split, Subdivision or Combination of
Shares.  If the Company at any time while this Warrant remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the Exercise Price for such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination and the number of such
securities shall be proportionately increased in the case of a split or
subdivision or proportionately decreased in the case of a
combination.

     

    (d)           Adjustments for Dividends in Stock
or other Securities or Property.  If while this Warrant remains
outstanding and unexpired, the holders of the securities as to which purchase
rights under this Warrant exist (including without limitation securities into
which such securities may be converted) at the time shall have received, or, on
or after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock or other securities or property (other than cash) of the
Company by way of dividend, then and in each case, this Warrant shall represent
the right to acquire, in addition to the number of shares of the security
receivable upon exercise of this Warrant, and without payment of any additional
consideration therefor, the amount of such other or additional stock or other
securities or property (other than cash) of the Company that such holder would
hold on the date of such exercise had it been the holder of record of the
security receivable upon exercise of this Warrant (or upon such conversion) on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 11.

     

    (e)           Subsequent Equity Sales. If
the Company at any time while this Warrant is outstanding sells and issues any
Common Stock at a price per share less than the then Exercise Price (such
issuances collectively, a “Dilutive Issuance”),
as adjusted hereunder, then the Exercise Price shall be reduced to equal a price
determined by multiplying the Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock issued and outstanding
immediately prior to such Dilutive Issuance plus the number of shares of Common
Stock which the aggregate gross consideration received by the Company for the
total number of additional shares of Common Stock so issued would purchase at
the Exercise Price in effect immediately prior to such Dilutive Issuance, and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such Dilutive Issuance plus the number of such
additional shares of Common Stock so issued.  Such adjustment shall be
made whenever a Dilutive Issuance occurs.  A Dilutive Issuance shall
not include:  (a) shares of Common Stock issued to employees,
officers, directors or consultants of the Company, (b) securities issued upon
the exercise or exchange of or conversion of any securities issued and
outstanding on the date hereof, or (c) securities issued pursuant to
acquisitions or strategic transactions.

     

    (f)           Calculations.  All
calculations under this Section 11 shall be made to the nearest four decimal
points.

     

    12.           Saturdays, Sundays and
Holidays.  If the last or appointed day for the taking of any
action or the expiration of any right granted herein shall be a Saturday, Sunday
or legal holiday, then (notwithstanding anything herein to the contrary) such
action may be taken or such right may be exercised on the next succeeding day
that is not a Saturday, Sunday or legal holiday.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    13.           Governing Law;
Venue.  This Warrant shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
made and to be performed entirely within such State, without regard to the
conflicts of law principles of such State.  Any action brought under
this Warrant shall be brought in the state or federal courts located in the City
of Los Angeles, CA.

     

    14.           Binding
Effect.  The terms of this Warrant shall be binding upon and
inure to the benefit of the Company and the Holder and their respective
successors and assigns.

     

    15.           Piggy-Back Registration
Rights.  The Holder shall have piggy-back registration rights
with respect to all shares of Common Stock or other securities issued upon
exercise of or in respect of this Warrant (except for registrations on SEC Form
S-4, S-8 or equivalent forms) Accordingly, the Company agrees to include the
shares issuable upon exercise hereof in its next registration statement on Form
S-1 or equivalent form filed with the SEC, in order to register the resale of
such shares pursuant to Rule 415 of the Securities Act.

     

    [SIGNATURES
APPEAR ON THE FOLLOWING PAGE]


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    IN WITNESS WHEREOF, CYBERDEFENDER CORPORATION has
caused this Warrant to be executed by its officers thereunto duly
authorized.


     

    
      
        
          
            
              	
                      Dated:
      November 7, 2008

                    	 
      	 
      
	 	 	 
	
                      HOLDER:  Guthy-Match
      LLC

                    	 
      	
                      CYBERDEFENDER
      CORPORATION

                    
	 	 	 
	
                      By:
      Guthy-Renker LLC

                    	 
      	
                      By:

                    	
                        /s/ Gary
      Guseinov

                    
	
                      Its:  Managing
      Member

                    	 
      	
                       
      

                    	
                      Gary
      Guseinov

                    
	
                       

                    	 
      	
                        Its:           Executive
      Officer

                    
	 
      	 
      	 
      
	 	      
                      By: 

                    	 	 	 	 
	 
      	
                      Name:  Ben
      Vandebunt

                    	 
      	 
      
	 
      	
                      Title:  Co-President

                    	 
      	 
      
	 
      	 
      	 
      


            

          

        

      

    

    


     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    NOTICE
OF EXERCISE

     

    (1)           The
undersigned hereby (A) elects to purchase                  
    shares of Common Stock of CYBERDEFENDER CORPORATION,
pursuant to the provisions of Section 3(a) of the attached Warrant, and tenders
herewith payment of the purchase price for such shares in full as provided in
Section 3(a) of the Warrant.

     

    (2)           In
exercising this Warrant, the undersigned hereby confirms and acknowledges that
(a) the Holder is an “accredited investor” as defined in Rule 501(a) under the
Securities Act of 1933, as amended, (b) the shares of Common Stock to be issued
upon exercise hereof are being acquired for investment, and (c) the undersigned
will not offer, sell or otherwise dispose of any such shares of Common Stock
except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any applicable state securities laws.

     

    (3)           Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:

     

    
      	 
      	
                

            
	 
      	
              (Name)

            
	 
      	 
      
	 
      	
                

            
	 
      	
              (Name)

            


    

     

    (4)           Please
issue a new Warrant for the unexercised portion of the attached Warrant in the
name of the undersigned or in such other name as is specified
below:

     

    
      	 
      	
                

            
	 
      	
              (Name)

            


    

    


    
      
        
          
            
              	
                        

                    	 	 	
                        

                    
	
                      (Date)

                    	 	
                      (Signature)

                    


            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    ASSIGNMENT

     

    FOR VALUE
RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns
and transfers unto the Assignee named below all of the rights of the undersigned
under the within Warrant, with respect to the number of shares of Common Stock
set forth below:

     

    
      	
              Name of Assignee

            	
              Address

            	
              No. of Shares

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      


    

    


    and does
hereby irrevocably constitute and appoint ____________________________ Attorney
to make such transfer on the books of CYBERDEFENDER CORPORATION, maintained for
the purpose, with full power of substitution in the premises.

     

    The
undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the shares of stock to be issued upon
exercise hereof are being acquired for investment, and that the Assignee will
not offer, sell or otherwise dispose of this Warrant or any shares of stock to
be issued upon exercise hereof except under circumstances which will not result
in a violation of the Securities Act of 1933, as amended, or any applicable
state securities laws.

    


    
      
        
          	
                  Dated:

                	
                    

                	 	 
      


        

      

    

    


    
      	 
      	
                

            
	 
      	
              Signature
      of Holder

            
	 
      	 
      
	 
      	
              Name: