Document:

SECURITIES
      PURCHASE AGREEMENT

     

    THIS
      SECURITIES PURCHASE AGREEMENT
      (this
“Agreement”)
      is
      made as of ____________, 2008 by and among CyberDefender Corporation, a
      California corporation (the “Company”),
      and
      the purchaser whose name and address is set forth on the signature page annexed
      hereto (the “Purchaser”).
      The
      foregoing parties are sometimes referred to hereinafter individually as a
“Party” or collectively as the “Parties.”

     

    RECITALS

     

    WHEREAS,
      pursuant
      to the Subscription Application of the Purchaser of even date herewith (each
      a
“Subscription
      Application”),
      and
      pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities
      Act”),
      and
      Rule 506 promulgated thereunder, the Company desires to sell to the Purchaser
      and the Purchaser desires to acquire from the Company that number of units
      of
      the Company’s securities (the “Units”)
      as are
      set forth on the Purchaser’s signature page annexed hereto, at a price of
      $25,000 per Unit, subject to the terms and conditions of this Agreement and
      the
      other documents or instruments contemplated hereby (the “Offering”);
      and

     

    WHEREAS,
      each
      Unit consists of: (i) 25,000 shares of the Company’s common stock, no par value
      (the “Common
      Stock”),
      and
      (ii) a warrant, in the form attached hereto as Exhibit
      A,
      to
      purchase up to 18,750 shares of Common Stock at an exercise price of $1.25
      per
      share for a 5 year period commencing upon the Closing (collectively,
“Warrants”).

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and agreements hereinafter set forth,
      and
      for other good and valuable consideration, the receipt and sufficiency of which
      are hereby acknowledged, the Parties do hereby covenant and agree as
      follows:

     

    AGREEMENT

     

    Section
      1. Sale
      and Issuance of Units.

     

    1.1 Subject
      to the terms and conditions of this Agreement, the Company has authorized the
      sale and issuance of up to 160 Units. At the Closing, the Company shall sell
      and
      issue to the Purchaser, and the Purchaser shall purchase from the Company,
      the
      number of Units set forth on the Purchaser’s signature page hereto. The Company
      intends to enter into this same form of purchase agreement with certain other
      purchasers (collectively, the “Other
      Purchasers”)
      and
      expects to complete sales of Units to them. The maximum number of Units that
      the
      Company may sell to the Purchaser and Other Purchasers combined is 160. The
      Purchaser’s obligations hereunder are expressly not subject to or conditioned on
      the purchase of Units by any or all of such Other Purchasers.

     

    1.2 The
      aggregate purchase price for the Units to be purchased by the Purchaser (the
      “Purchase
      Price”)
      shall
      be the amount set forth on the Purchaser’s signature page hereto.

     

    Section
      2. The
      Closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.1  The
      closing of the sale and issuance to the Purchaser (the “Closing”)
      shall
      take place on the date when the Company’s legal counsel, Richardson & Patel,
      LLP (the “Escrow Agent”), receives all of the materials required pursuant to the
      Escrow Agreement annexed hereto as Exhibit
      B
      (the
“Escrow
      Agreement”),
      including, without limitation, immediately available funds via wire transfer
      or
      a certified check equal to the subscription amount set forth on the Purchaser’s
      signature page hereto.

     

    2.2  At
      the
      Closing, the Company shall instruct its transfer agent to issue and deliver
      to
      the Purchaser a certificate representing the Common Stock, against receipt
      by
      the Escrow Agent of a certified bank check or wire transfer in an aggregate
      amount equal to the Purchase Price for the Units set forth on the Purchaser’s
      signature page hereto.

     

    Section
      3. Representations
      and Warranties of the Company.

     

    The
      Company hereby represents and warrants to the Purchaser as follows:

     

    3.1 Organization.
      

     

    The
      Company is duly organized, validly existing and in good standing under the
      laws
      of the State of California and is qualified to conduct its business as a foreign
      corporation in each jurisdiction where the failure to be so qualified would
      have
      a material adverse effect on the Company.

     

    3.2 Authorization
      of Agreement, Etc.

     

    The
      execution, delivery, and performance by the Company of its obligations under
      this Agreement, the Escrow Agreement, the Subscription Application, the Warrants
      and each other document or instrument contemplated hereby or thereby
      (collectively, the “Transaction
      Documents”)
      has
      been duly authorized by all requisite corporate action on the part of the
      Company; and this Agreement and the Transaction Documents have been duly
      executed and delivered by the Company. Each of the Transaction Documents, when
      executed and delivered by the Company, constitutes the valid and binding
      obligation of the Company, enforceable against the Company in accordance with
      its terms, subject to applicable bankruptcy, insolvency, reorganization,
      fraudulent conveyance, moratorium, or other similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
      principles of equity (regardless of whether enforcement is sought in a
      proceeding at law or in equity).

     

    
      	3.3  	
              Issuance
                of Common Stock and Warrants.

            

    

     

    The
      Units
      are duly authorized and, when paid for and issued in accordance with the
      Transaction Documents, will be duly and validly issued, fully paid, and
      nonassessable, free and clear of all liens. The Company has reserved from its
      duly authorized capital stock the maximum number of shares of Common Stock
      issuable pursuant to this Agreement and upon exercise of the
      Warrants.

     

    Section
      4. Representations
      and Warranties of the Purchaser.

     

    The
      Purchaser hereby represents and warrants to the Company as follows:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    4.1 Authorization
      of the Documents.

     

    The
      Purchaser has all requisite power and authority (corporate or otherwise) to
      execute, deliver, and perform its obligations under the Transaction Documents,
      and the execution, delivery, and performance by the Purchaser of its obligations
      under the Transaction Documents has been duly authorized by all requisite action
      on the part of the Purchaser and each such Transaction Document, when executed
      and delivered by the Purchaser, shall constitute the valid and binding
      obligation of the Purchaser, enforceable against the Purchaser in accordance
      with its terms, subject to applicable bankruptcy, insolvency, reorganization,
      fraudulent conveyance, moratorium or other similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general
      principles of equity (regardless of whether enforcement is sought in a
      proceeding at law or in equity).

     

    4.2 Investment
      Representations.

     

    All
      of
      the representations, warranties, and information of the Purchaser as set forth
      in the Purchaser’s Subscription Application are incorporated by reference
      herein, shall be deemed to be a part hereof, and shall be true and correct
      at
      the Closing with the same force and effect as if made by the Purchaser as of
      the
      date thereof.

     

    4.3 Access
      to Company Information.

     

    The
      Purchaser acknowledges that it has been afforded access and the opportunity
      to
      obtain all financial and other information concerning the Company that such
      Purchaser desires (including the opportunity to meet with the Company’s
      executive officers, either in person or telephonically). The Purchaser has
      reviewed copies of all reports filed by the Company (the “Filings”)
      with
      the Securities and Exchange Commission (the “Commission”)
      under
      the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”),
      since
      July 19, 2007, and has reviewed the Company’s Registration Statement on Form
      SB-2, as amended (Commission file number 333-138430) (the “Registration
      Statement”),
      all
      of which are available for review at www.sec.gov.
      The
      Purchaser further acknowledges that it is familiar with the contents of the
      Filings and the Registration Statement, including, without limitation, the
      risk
      factors contained in the Registration Statement, and that there is no further
      information about the Company that the Purchaser desires in determining whether
      to acquire the Units in the Offering.

     

    Section
      5. Brokers
      and Finders.

    

    The
      Company is obligated to compensate its placement agent, 1st
      Worldwide Financial Partners, LLC
      (“1st
      Worldwide”), in the amount of 9% of the gross proceeds of the Offering plus a
      5-year warrant, substantially in the form of the Warrants, to purchase 9% of
      the
      number of shares of Common Stock issued in the Offering (not including shares
      underlying the Warrants) at an exercise price of $1.00 per share, but only
      with
      respect to investments sourced by 1st Worldwide or its sub-agents. In addition,
      1st Worldwide will receive a non-accountable expense allowance equal to 2.5%
      of
      the Purchase Price. 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.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Section
      6. Indemnification
      by the Purchaser.
      

    

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

    

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

    

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

    

    Section
      7. Anti-Dilution
      Protection

     

    From
      and
      after the date of this Agreement, in the event the Company sells Common
      Stock for less than $1.00 per share or issues securities convertible into or
      exercisable for Common Stock at a conversion price or exercise price less than
      $1.00 per share (a “Dilutive Issuance”), then the Company will issue the number
      of additional shares of Common Stock to the Purchaser, without additional
      consideration, equal to the product of the Purchaser’s subscription amount
      hereunder multiplied by a fraction, the numerator of which is the number of
      shares of Common Stock sold and issued at the closing of such Dilutive Issuance
      plus the number of shares which the aggregate offering price of the total number
      of shares of Common Stock sold and issued at the closing of such Dilutive
      Issuance would purchase at $1.00 per share, and the denominator of which is
      the
      number of shares of Common Stock issued and outstanding on the date of such
      Dilutive Issuance plus the number of additional shares of Common Stock sold
      and
      issued at the closing of such Dilutive Issuance. Notwithstanding the foregoing,
      no additional shares will be issued hereunder in respect of an Exempt Issuance.
      “Exempt Issuance” means (i) Common Stock or options issued pursuant to a board
      approved equity incentive plan, (ii) Common Stock issued upon the exercise
      or
      conversion of options, warrants or convertible debentures outstanding on the
      Closing Date, and (iii) securities issued in connection with strategic
      transactions the primary purpose of which is not to raise capital.

     

    Section
      8. Successors
      and Assigns.

     

    This
      Agreement shall bind and inure to the benefit of the Company, the Purchaser,
      and
      their respective successors and assigns.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Section
      9. Entire
      Agreement.

     

    This
      Agreement and the other writings and agreements referred to in this Agreement
      or
      delivered pursuant to this Agreement contain the entire understanding of the
      Parties with respect to the subject matter hereof and supersede all prior
      agreements and understandings, whether written or verbal, among the Parties
      with
      respect thereto.

     

    Section
      10. Notices.

     

    All
      notices, demands and requests of any kind to be delivered to any Party in
      connection with this Agreement shall be in writing and shall be deemed to have
      been duly given if personally delivered or if sent by internationally-recognized
      overnight courier or by registered or certified mail, return receipt requested
      and postage prepaid, addressed as follows:

     

    if
      to the
      Company, to:

     

    CyberDefender
      Corporation

    617
      7th
      Street, Suite 401

    Los
      Angeles CA 90017

    Attention:
      Chief Executive Officer

    

    with
      a
      copy to:

    

    Richardson
      & Patel LLP

    The
      Chrysler Building

    405
      Lexington Avenue, 26th Floor

    New
      York,
      New York 10174

    Attention
      Kevin Friedmann

    

    if
      to the
      Purchaser, to:

     

    at
      the
      address of the Purchaser set forth on the Purchaser’s signature page
      hereto;

    

    or
      to
      such other address as the Party to whom notice is to be given may have furnished
      to the other Parties to this Agreement in writing in accordance with the
      provisions of this Section. Any such notice or communication shall be deemed
      to
      have been received (i) in the case of personal delivery, on the date of such
      delivery, (ii) in the case of internationally-recognized overnight courier,
      on
      the next business day after the date when sent and (iii) in the case of mailing,
      on the third business day following that on which the piece of mail containing
      such communication is posted.

     

    Section
      11. Amendments.

     

    This
      Agreement may not be modified or amended, nor may any provision of this
      Agreement be waived, except as evidenced by a written agreement duly executed
      by
      the holders of at least 66% of the Common Stock and shares underlying Warrants
      issued to the Purchaser and all Other Purchasers combined.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Section
      12. Governing
      Law; Waiver of Jury Trial.

     

    All
      questions concerning the construction, interpretation, and validity of this
      Agreement shall be governed by and construed and enforced in accordance with
      the
      domestic laws of the State of New York without giving effect to any choice
      or
      conflict of law provision or rule (whether in the State of New York or any
      other
      jurisdiction) that would cause the application of the laws of any jurisdiction
      other than the State of New York. In furtherance of the foregoing, the internal
      law of the State of New York will control the interpretation and construction
      of
      this Agreement, even if under such jurisdiction’s choice of law or conflict of
      law analysis, the substantive law of some other jurisdiction would ordinarily
      or
      necessarily apply.

     

    Section
      13. Submission
      to Jurisdiction.

     

    Any
      legal
      action or proceeding with respect to this Agreement may be brought in the courts
      of the State of California and the United States of America located in the
      City
      of Los Angeles, California and, by execution and delivery of this Agreement,
      the
      Company hereby accepts for itself and in respect of its property, generally
      and
      unconditionally, the jurisdiction of the aforesaid courts. The Purchaser hereby
      irrevocably waives, in connection with any such action or proceeding, any
      objection, including, without limitation, any objection to the venue or based
      on
      the grounds of forum non conveniens, which it may now or hereafter have to
      the
      bringing of any such action or proceeding in such respective jurisdictions.
      The
      Purchaser hereby irrevocably consents to the service of process of any of the
      aforementioned courts in any such action or proceeding by the mailing of copies
      thereof by registered or certified mail, postage prepaid, to it at its address
      as set forth herein. 

     

    Section
      14. Severability.

     

    It
      is the
      desire and intent of the Parties that the provisions of this Agreement be
      enforced to the fullest extent permissible under the law and public policies
      applied in each jurisdiction in which enforcement is sought. Accordingly, in
      the
      event that any provision of this Agreement would be held in any jurisdiction
      to
      be invalid, prohibited, or unenforceable for any reason, such provision, as
      to
      such jurisdiction, shall be ineffective, without invalidating the remaining
      provisions of this Agreement or affecting the validity or enforceability of
      such
      provision in any other jurisdiction. Notwithstanding the foregoing, if such
      provision could be more narrowly drawn so as not to be invalid, prohibited,
      or
      unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
      narrowly drawn, without invalidating the remaining provisions of this Agreement
      or affecting the validity or enforceability of such provision in any other
      jurisdiction.

     

    Section
      15. Independence
      of Agreements, Covenants, Representations and Warranties.

     

    All
      agreements and covenants hereunder shall be given independent effect so that
      if
      a certain action or condition constitutes a default under a certain agreement
      or
      covenant, the fact that such action or condition is permitted by another
      agreement or covenant shall not affect the occurrence of such default, unless
      expressly permitted under an exception to such covenant. In addition, all
      representations and warranties hereunder shall be given independent effect
      so
      that if a particular representation or warranty proves to be incorrect or is
      breached, the fact that another representation or warranty concerning the same
      or similar subject matter is correct or is not breached will not affect the
      incorrectness of or a breach of a representation and warranty hereunder. The
      exhibits and any schedules annexed hereto are hereby made part of this Agreement
      in all respects. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    Section
      16. Counterparts. 

     

    This
      Agreement may be executed in any number of counterparts, and each such
      counterpart of this Agreement shall be deemed to be an original instrument,
      but
      all such counterparts together shall constitute but one agreement. Facsimile
      counterpart signatures to this Agreement shall be acceptable and
      binding.

     

    Section
      17. Headings.

     

    The
      section and paragraph headings contained in this Agreement are for reference
      purposes only and shall not affect in any way the meaning or interpretation
      of
      this Agreement.

     

    Section
      18. Expenses. 

     

    Each
      Party shall pay its own fees and expenses incurred in connection with the
      negotiation, execution, delivery and performance of this Agreement, the
      Transaction Documents and any document or instrument contemplated hereby or
      thereby. 

     

    Section
      19. Preparation
      of Agreement.

     

    The
      Company prepared this Agreement and the Transaction Documents solely on its
      behalf. Each Party to this Agreement acknowledges that: (i) the Party had the
      advice of, or sufficient opportunity to obtain the advice of, legal counsel
      separate and independent of legal counsel for any other Party hereto; (ii)
      the
      terms of the transactions contemplated by this Agreement are fair and reasonable
      to such Party; and (iii) such Party has voluntarily entered into the
      transactions contemplated by this Agreement without duress or coercion. Each
      Party further acknowledges that such Party was not represented by the legal
      counsel of any other Party hereto in connection with the transactions
      contemplated by this Agreement, nor was he or it under any belief or
      understanding that such legal counsel was representing his or its interests.
      Each Party agrees that no conflict, omission, or ambiguity in this Agreement,
      or
      the interpretation thereof, shall be presumed, implied, or otherwise construed
      against any other Party to this Agreement on the basis that such Party was
      responsible for drafting this Agreement.

    

     

    *
      * * *
      *

     

    [SIGNATURE
      PAGES FOLLOW]

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

    
      	 	 	 
	 	 
	 	COMPANY:
	 	 
	 	
              CYBERDEFENDER
                CORPORATION

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
              Gary Guseinov
	 	
              Title:
                Chief Executive Officer

            

    

     

    [PURCHASER’S
      SIGNATURE PAGE FOLLOWS]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    [PURCHASER
      SIGNATURE PAGE TO CYBERDEFENDER CORPORATION 

    SECURITIES
      PURCHASE AGREEMENT]

    

    

    PURCHASER:

    

      
        	 	 
	
                ______________________________

              	
                ________________________________

              
	
                Name
                  of Purchaser (Individual or

              	
                Name
                  of Individual representing

              
	
                Institution)

              	
                Purchaser
                  (if an Institution)

              
	 	 
	 	 
	
                ______________________________

              	
                ________________________________

              
	
                Title
                  of Individual representing

              	
                Signature
                  of Individual Purchaser or 

              
	
                Purchaser
                  (if an Institution)

              	
                Individual
                  representing Purchaser

              

      

    

    

    Address:

    

    

    Telephone:

    

    

    Facsimile:

     

    
      ________________________________
Number
      of
      Units

     

    
      ________________________________
Aggregate
      Purchase Price

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    Form
      of Warrant

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B

    

    Escrow
      AgreementTHE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (THE “ACT”), 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 THE ACT AND
      APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
      AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
      SUCH REGISTRATION IS NOT REQUIRED.

     

    
      	 	 
	
              Certificate
                No. WC-___

            	
              Warrant
                to Purchase ___________ Shares of

            
	
              Dated:
                __________, 2008

            	
              Common
                Stock (subject to adjustment)

            
	 	 

    

     

    WARRANT
      TO PURCHASE COMMON STOCK

    of

    CYBERDEFENDER
      CORPORATION 

    

     

    This
      certifies that, for value received, ______________, or registered assigns (the
      “Holder”)
      is
      entitled, subject to the terms set forth below, to purchase from CyberDefender
      Corporation, a California corporation (the “Company”),
      up to
      ______________ shares of its common stock, no par value (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 Notice of Exercise form annexed hereto duly executed, and simultaneous
      payment therefor in lawful money of the United States or otherwise as
      hereinafter provided, at the Exercise Price 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 herein. The term “Warrant” as used herein
      shall include this Warrant and any warrants delivered in substitution or
      exchange therefor as provided herein. This Warrant is being issued pursuant
      to
      the Securities Purchase Agreement, dated the date hereof, by and between the
      Company and the Holder, and in connection with the corresponding Subscription
      Application of the Holder. 

     

    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 the five (5) year anniversary
      of
      the Warrant Issue Date (the “Term”),
      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 11
      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, 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 or (ii) a net issue
      exercise as provided in Section 3(c) below.

     

    (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 ten (10) 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 remaining number of shares for which this Warrant may then
      be exercised.

     

    (c)  Net
      Issue Exercise. Notwithstanding
      any provisions herein to the contrary, if the fair market value of one share
      of
      Common Stock is greater than the Exercise Price (at the date of calculation
      as
      set forth below), in lieu of exercising this Warrant for cash, the Holder may
      elect to receive shares equal to the value (as determined below) of this Warrant
      (or the portion thereof being canceled) by surrender of this Warrant at the
      principal office of the Company together with the properly endorsed Notice
      of
      Exercise and notice of such election, in which event the Company shall issue
      to
      the Holder a number of shares of Common Stock computed using the following
      formula:

     

    
      	
              X
                =

            	
              Y
                (A-B)

            
	
              A

            
	
              Where

            	
              X

            	
              =

            	
              The
                number of shares of Common Stock to be issued to the
                Holder

            
	 	
              Y

            	
              =

            	
              the
                number of shares of Common Stock purchasable under this Warrant or,
                if
                only a portion of this Warrant is being exercised, the portion of
                this
                Warrant being canceled (at the date of such
                calculation)

            
	 	
              A

            	
              =

            	
              the
                fair market value of one share of the Common Stock (at the date of
                such
                calculation)

            
	 	
              B

            	
              =

            	
              Exercise
                Price (as adjusted to the date of such
                calculation).

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
For
      purposes of the above calculation, 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 on the OTC Bulletin Board or the closing price of the Common Stock quoted
      on the Nasdaq Capital Market or on any exchange on which the Common Stock is
      listed, whichever is applicable, as reported by Bloomberg L.P. for the five
      (5)
      trading days prior to the date of determination of fair market
      value.

     

    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 the 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.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (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. Upon
      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 purposes, 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):

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    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, 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 or Articles
      of Incorporation (the “Certificate”)
      to
      provide sufficient reserves 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 the 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

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (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,
      con-veyance, 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 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 holders of at least 66% of the then outstanding warrant shares
      underlying the Units issued to the Other Purchasers (as defined in the SPA)
      and
      the Holder combined. 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 (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
      fair market value of such consideration shall be determined in accordance with
      Section 3(c). 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.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (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)  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.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (e)  Subsequent
      Equity Sales.
      From
      and
      after the Warrant Issue Date, in the event the Company sells Common Stock for
      less than the then Exercise Price or issues securities convertible into or
      exercisable for Common Stock at a conversion price or exercise price less than
      the then Exercise Price (a “Dilutive Issuance”), then the Exercise Price shall
      be multiplied by a fraction, the numerator of which is the number of shares
      of
      Common Stock sold and issued at the closing of such Dilutive Issuance plus
      the
      number of shares which the aggregate offering price of the total number of
      shares of Common Stock sold and issued at the closing of such Dilutive Issuance
      would purchase at the then Exercise Price, and the denominator of which is
      the
      number of shares of Common Stock issued and outstanding on the date of such
      Dilutive Issuance plus the number of additional shares of Common Stock sold
      and
      issued at the closing of such Dilutive Issuance. Notwithstanding the foregoing,
      no adjustment will occur hereunder in respect of an Exempt Issuance. “Exempt
      Issuance” means (i) Common Stock or options issued pursuant to a board approved
      equity incentive plan, (ii) Common Stock issued upon the exercise or conversion
      of options, warrants or convertible debentures outstanding on the Closing Date,
      and (iii) securities issued in connection with strategic transactions the
      primary purpose of which is not to raise capital.

     

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

     

    (g)  No
      Impairment.
      The
      Company will not, by amendment of its charter or through reorganization,
      consolidation, merger, dissolution, sale of assets or any other voluntary
      action, avoid or seek to avoid the observance or performance of any of the
      terms
      of this Warrant, but will at all times in good faith assist in the carrying
      out
      of all such terms and in the taking of all such action as may be necessary
      or
      appropriate in order to protect the rights of the holder of this Warrant against
      impairment.

     

    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.
      This
      Warrant shall be governed by and construed in accordance with the laws of the
      State of New York applicable to agreements made and to be performed entirely
      within such State, without regard to the conflicts of law principles of such
      State.

     

    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.

     

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

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

     

    
      	
              Dated:
                ________________________     

            	 	 
	 	 	 
	
              HOLDER:
                ________________________

            	 	
              CYBERDEFENDER
                CORPORATION

            
	 	 	 
	
              By:
                ________________________      

              Name:
                

              Its:
                

            	 	
              By: 
                ________________________    

              Name:
                Gary Guseinov

              Title:
                Chief Executive Officer

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    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, or (B) elects
      to
      exercise this Warrant for the purchase of_______ shares of Common Stock,
      pursuant to the provisions of Section 3(c) of the attached Warrant.

     

    (2) In
      exercising this Warrant, the undersigned hereby confirms and acknowledges that
      the shares of Common Stock to be issued upon exercise hereof are being acquired
      for investment purposes, and that 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)

              	 
	 	 	 	 

      

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    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 purposes, 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

              

      

    

     

    
      
         

      

      
        11

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