Document:

SUBORDINATION
      AGREEMENT

    

    To
      the
      purchasers of 10% Convertible Promissory Notes (the “New Notes”) of
      CyberDefender Corporation, a California corporation (the “Company”)

    

    Ladies
      and Gentlemen:

     

    The
      holders of at least 75% of the outstanding principal amount (collectively,
      the
“75% Debenture Holders”) of the Company’s 10% Secured Convertible Debentures due
      September 12, 2009 (the “Debentures”) desire to grant consent, for and on behalf
      of all of the holders of the Debentures (the “Senior Lenders”), to permit the
      Company to consummate a private placement involving the issuance of up to
      $1,200,000 in aggregate principal amount of the New Notes, as required by
      Section 7(a) of the Debentures. Defined terms not otherwise defined herein
      shall
      have the meanings set forth in that certain Securities Purchase Agreement dated
      September 12, 2006 among the Company and the Senior Lenders (the “Purchase
      Agreement”).
      For
      the purpose of inducing the 75% Debenture Holders to grant the above-described
      consent, and in consideration thereof, the undersigned purchasers of the New
      Notes (“New Lenders”) agree as follows:

    

    1.
       Any
      and
      all claims of New Lenders against the Company, now or hereafter existing, are,
      and shall be at all times, subject and subordinate to any and all claims, now
      or
      hereafter existing which any Senior Lender may have against the Company
      (including any claim by the Senior Lenders for interest accruing after any
      Bankruptcy Event, or any claim by the Senior Lenders for any such interest
      which
      would have accrued in the absence of such Bankruptcy Event).

    

    2.
       Each
      New
      Lender agrees not to commence or threaten to commence any action or proceeding,
      sue upon, or to collect, or to receive payment of the principal or interest
      of
      any claim or claims now or hereafter existing which such New Lender may hold
      against the Company, and not to sell, assign, transfer, pledge, hypothecate,
      or
      encumber such claim or claims except subject expressly to this Agreement, and
      not to enforce or apply any security now or hereafter existing therefor, nor
      to
      file or join in any petition to commence any proceeding under Title 11 of the
      U.S. Code (the “Bankruptcy Code”), nor to take any lien or security on any of
      the Company’s property, real or personal, so long as any claim of Senior Lenders
      against the Company shall exist. 

    

    3.
       In
      case
      of any Bankruptcy Event: (a) the Company and any assignee, trustee in
      bankruptcy, receiver, debtor in possession or other person or persons in charge
      are hereby directed to pay to Senior Lenders the full amount of Senior Lenders’
claims against the Company (including interest to the date of payment) before
      making any payment of principal or interest to New Lenders, and insofar as
      may
      be necessary for that purpose, each New Lender hereby assigns and transfers
      to
      the Senior Lenders all rights to any payments, dividends or other distributions,
      and (b) each New Lender hereby irrevocably constitutes and appoints each Senior
      Lender its true and lawful attorney to act in its name and stead: (i) to file
      the appropriate claim or claims on behalf of such New Lender if such New Lender
      does not do so prior to 30 days before the expiration of the time to file claims
      in such proceeding and if any Senior Lender elects in its sole discretion to
      file such claim or claims and (ii) to accept or reject any plan of
      reorganization or arrangement on behalf of New Lenders, and to otherwise vote
      New Lenders’ claim in respect of any indebtedness now or hereafter owing from
      the Company to New Lenders in any manner the Senior Lenders deem appropriate
      for
      their respective own benefit and protection.

     

    
      
        
        

      

      
        -
          1 -

        
          

        

      

      
        
        

      

    

     

    4.
       Each
      New
      Lender acknowledges and agrees that the Senior Lenders may agree with the
      Company to (a) renew, compromise, extend, accelerate or otherwise change the
      time of payment, or any other terms, of any existing or future claim of the
      Senior Lenders against the Company, (b) increase or decrease the rate of
      interest payable thereon or any part thereof, (c) exchange, enforce, waive
      or
      release any security therefor, (d) apply such security and direct the order
      or
      manner of sale thereof in such manner as the Senior Lenders may determine in
      accordance with the Security Documents and the Debentures, (e) release the
      Company or any guarantor of any indebtedness of the Company from liability,
      and
      (f) make optional future advances to the Company, all without notice to the
      New
      Lenders without affecting the subordination provided by this
      Agreement.

    

    5. In
      the
      event that any payment or any cash or noncash distribution is made to any New
      Lender in violation of the terms of this Agreement, such New Lender shall
      receive same in trust for the benefit of the Senior Lenders, and shall forthwith
      remit it to the Agent in the form in which it was received, together with such
      endorsements or documents as may be necessary to effectively negotiate or
      transfer same to the Senior Lenders.

    

    6.
       Until
      all
      such claims of Senior Lenders against the Company shall be paid in full, no
      gift
      or loan shall be made by the Company to any New Lender.

    

    7.
       For
      violation of this Agreement, each New Lender, severally and not jointly, shall
      be liable for all loss and damage sustained by reason of such breach, provided,
      however, in no event shall any New Lender be liable for any loss or damage
      in
      excess of the principal amount of such New Lender’s New Note, and in no event
      shall any New Lender be liable for actions taken by any other New Lender in
      violation of this Agreement.

    

    8.
       This
      Agreement shall be binding upon the heirs, successors and assigns of New
      Lenders, the Company and the Senior Lenders. This Agreement and any existing
      or
      future claim of a Senior Lender against the Company may be assigned by such
      Senior Lender, in whole or in part, without notice to New Lenders or the
      Company.

    

    9. 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.

     

    
      
        
        

      

      
        -
          2 -

        
          

        

      

      
        
        

      

    

     

    10. All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be determined in accordance with the provisions of
      the
      Purchase Agreement.

    

    11. This
      Agreement may be executed in 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.

    

    12. This
      Agreement constitutes the entire agreement among the parties with respect to
      the
      matters covered hereby and thereby and supersedes all previous written, oral
      or
      implied understandings among them with respect to such matters.

    

    13. The
      invalidity of any portion hereof shall not affect the validity, force or effect
      of the remaining portions hereof. If it is ever held that any restriction
      hereunder is too broad to permit enforcement of such restriction to its fullest
      extent, such restriction shall be enforced to the maximum extent permitted
      by
      law.

    

    14. Each
      of
      the parties hereto acknowledges that this Agreement has been prepared jointly
      by
      the parties hereto, and shall not be strictly construed against either
      party.

    

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        -
          3 -

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Subordination Agreement
      to
      be duly executed by their respective authorized signatories as of the date
      first
      indicated above.

    

      
        	
                 

              	 
	
                Name
                  of New Lender

              	 
	 	 
	
                By: 

              	 	 

      

      

        
          	
                  Name
                    and Title:

                	 
	 	 
	
                  Address
                    for Notice: 

                	 
	 	 
	 	 
	
                  Fax
                    #:

                	 

        

      

       

      
        
          
          

        

        
          -
            4 -

          
            

          

        

        
          
          

        

      

Acceptance
      of Subordination Agreement by Company

    

    The
      undersigned being the Company named in the foregoing Subordination Agreement,
      hereby accepts and consents thereto and agrees to be bound by all the provisions
      thereof and to recognize all priorities and other rights granted thereby to
      the
      Senior Lenders (as defined therein), their respective successors and assigns,
      and to perform this Agreement in accordance therewith.

    

    Dated:
      ______________, 2008

    

    
      	 	
              CYBERDEFENDER
                CORPORATION

            
	 	 
	 	
              By: 

            	 
	 	
              Name:
                Gary Guseinov

            
	 	
              Title:
                Chief Executive Officer

            

    

    

    
      	 	
              Address: 

            	
              617
                West 7th
                Street, Suite 401

            
	 	 	
              Los
                Angeles, CA 90017

            
	 	 
	 	
              Fax
                #: 213.947.1914

            

    

     

    
      
        
        

      

      
        -
          5 -CONSENT
      AND WAIVER AGREEMENT

     

    THIS
      CONSENT AND WAIVER AGREEMENT (this “Agreement”),
      dated
      as
      of November 21, 2008 is entered into by and among Cyberdefender Corporation,
      a
      California corporation (the “Company”),
      the
      undersigned holders of at least 75% of the outstanding principal amount of
      the
      Debentures (as hereinafter defined) (the “Holders”)
      and
      the Agent (as defined in the Purchase Agreement).

     

    WHEREAS,
      pursuant
      to a Securities
      Purchase Agreement, dated September 12, 2006 (the “Purchase
      Agreement”),
      among
      the Company and the purchasers signatory thereto, the Holders purchased from
      the
      Company 10% Secured Convertible Debentures (the “Debentures”)
      and
      warrants to purchase Common Stock of the Company issued pursuant thereto (the
      “2006
      Warrants”).

     

    WHEREAS,
      capitalized terms used but not defined herein have the meanings ascribed to
      them
      in the Purchase Agreement.

     

    NOW
      THEREFORE,
      for
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the Company and each of the undersigned Holders hereby agree
      as
      follows:

     

    1. Each
      of
      the undersigned Holders hereby consents, as required by Section 7(a) of the
      Debentures, to the issuance by the Company of up to $1,200,000 in aggregate
      principal amount of the Company’s 10% Convertible Promissory Notes, due eleven
      months from the date of issuance and convertible into shares of Common Stock
      at
      a conversion price of $1.25 per share, subject to adjustment as provided therein
      (such financing, “New
      Debt Financing”
and
      such waiver, the “Waiver”);
      provided,
      however,
      the
      Waiver shall immediately terminate and be null and void as to any investment
      pursuant to the New Debt Financing by any investor in such New Debt Financing
      who is initially contacted by the Company, its placement agent or any
      representative thereof on or after December 5, 2008.

     

    2. The
      Company hereby agrees to cause its legal counsel to issue a legal opinion to
      each of the undersigned Holders and the Company’s Transfer Agent that the shares
      of Common Stock issuable upon conversion of the Debentures (the “Debenture
      Shares”)
      and
“cashless exercise” of the 2006 Warrants (collectively, the “144
      Eligible Securities”)
      (a)
      may be sold pursuant to Rule 144 under the Securities Act without volume
      restrictions or manner of sale limitations as of the date hereof, assuming
      such
      Holders is not an “affiliate” of the Company as defined in Rule 405 under the
      Securities Act, and (b) that the certificates representing the 144 Eligible
      Securities may be issued without a restrictive legend as required pursuant
      to
      Section 4.1 of the Purchase Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Subject
      to the terms and conditions set forth herein, each undersigned Holder hereby
      acknowledges and agrees that the Company shall not be required to file or
      maintain the effectiveness of any registration statement registering the resale
      of any Debenture Shares or shares issuable upon exercise of the 2006 Warrants
      (the “2006
      Warrant Shares”).
      The
      Company agrees and acknowledges that the 2006 Warrant Shares and the shares
      of
      Common Stock underlying the 18 month 10% convertible debentures issued or
      issuable to each of the Holders and each of the holders of the Debentures in
      payment of interest and liquidated damages pursuant to prior consent and waiver
      agreements (the “18
      Month Debentures”)
      shall
      carry “piggyback” registration rights. As such, the Company shall include, in
      the first resale registration statement filed by the Company on Form S-1, or
      the
      then equivalent form, after the date hereof, at the election of the holders
      thereof (a) the 2006 Warrant Shares and (b) the shares of Common Stock
      underlying the 18 Month Debentures (together the “Piggyback
      Shares”);
      all
      such Piggyback Shares shall be included in the initial registration statement
      filed after the date hereof; provided,
      however,
      to the
      extent that all of the Piggyback Shares are not included in the initial
      registration statement filed after the date hereof, each Holder shall have
      the
      right to request the inclusion of its Piggyback Shares in subsequent
      registration statements until all such Piggyback Shares have been registered
      in
      accordance with the terms hereof. The Company shall use its best efforts to
      cause any registration statement filed in connection with this paragraph 3
      to be
      declared effective by the Commission as promptly as is possible following it
      being filed with the Commission and to remain effective until all Piggyback
      Shares subject thereto have been sold or may be sold pursuant to Rule 144 under
      the Securities Act without volume restrictions or manner of sale limitations.
      All fees and expenses incident to the performance of or compliance with this
      paragraph 3 by the Company shall be borne by the Company whether or not any
      Piggyback Shares are sold pursuant to the registration statement. The Company
      shall indemnify and hold harmless each Holder, the officers, directors, members,
      partners, agents, brokers, investment advisors and employees of each of them,
      each person who controls each Holder (within the meaning of Section 15 of the
      Securities Act or Section 20 of the Exchange Act), and the officers, directors,
      members, shareholders, partners, agents and employees of each such controlling
      person, to the fullest extent permitted by applicable law, from and against
      any
      and all losses, claims, damages, liabilities, costs (including, without
      limitation, reasonable attorneys’ fees) and expenses (collectively, the
“Losses”),
      as
      incurred, arising out of or relating to (i) any untrue or alleged untrue
      statement of a material fact contained in the registration statement, any
      prospectus included therein or any form of prospectus or in any amendment or
      supplement thereto or in any preliminary prospectus, or arising out of or
      relating to any omission or alleged omission of a material fact required to
      be
      stated therein or necessary to make the statements therein (in the case of
      any
      prospectus or form of prospectus or supplement thereto, in light of the
      circumstances under which they were made) not misleading or (ii) any violation
      or alleged violation by the Company of the Securities Act, the Exchange Act
      or
      any state securities law, or any rule or regulation thereunder, in connection
      with the performance of its obligations under this paragraph 3, except to the
      extent, but only to the extent, that such untrue statements or omissions
      referred to in (i) above are based solely upon information regarding a Holder
      furnished in writing to the Company by such Holder expressly for use therein,
      or
      to the extent that such information relates to such Holder or such Holder’s
      proposed method of distribution of Piggyback Shares and was reviewed and
      expressly approved in writing by such Holder expressly for use in the
      registration statement, such prospectus or such form of prospectus or in any
      amendment or supplement thereto.

     

    4. In
      consideration of the Waiver and the consent provided by the Holders pursuant
      to
      this Agreement, the Company agrees to accelerate the maturity date of the 18
      Month Debentures to September 12, 2009, which accelerated maturity date shall
      become automatically effective as of the date the Company issues the Current
      Report on Form 8-K described in paragraph 6 below. No later than five Business
      Days after filing date of such Form 8-K, the Company shall provide replacement
      debentures to each Holder memorializing such accelerated maturity date of the
      18
      Month Debentures. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5. The
      Company hereby makes to the Holders the following representations and
      warranties:

     

    i. Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by this Agreement and otherwise to
      carry out its obligations hereunder and thereunder. The execution and delivery
      of this Agreement by the Company and the consummation by it of the transactions
      contemplated hereby 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. This Agreement has
      been duly executed by the Company and, when delivered in accordance with the
      terms hereof 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.

     

    ii. No
      Conflicts.
      The
      execution, delivery and performance of this Agreement by the Company and the
      consummation by the Company of the transactions contemplated hereby do not
      and
      will not: (i) conflict with or violate any provision of the Company’s
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents, or (ii) 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 give to others any rights of termination, amendment, acceleration or
      cancellation (with or without notice, lapse of time or both) of, any material
      agreement, credit facility, debt or other material instrument (evidencing a
      Company debt or otherwise) or other material understanding to which the Company
      is a party or by which any property or asset of the Company is bound or
      affected, or (iii) 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 is subject (including
      federal and state securities laws and regulations), or by which any property
      or
      asset of the Company 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.

     

    iii. Equal
      Consideration.
      Except
      as set forth in this Agreement and prior consent and waiver agreements entered
      into with the holders of at least 75% in outstanding principal amount of the
      Debentures, no consideration has been offered or paid to any person to amend
      or
      consent to a waiver, modification, forbearance or otherwise of any provision
      of
      any of the Transaction Documents.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    iv. Survival
      and Bring Down.
      All of
      the Company’s warranties and representations contained in this Agreement shall
      survive the execution, delivery and acceptance of this Agreement by the parties
      hereto. 

     

    v. Shell
      Company.
      The
      Company is not and has never been a “shell company” as defined in Rule 405 under
      the Securities Act and therefore Rule 144(i) under the Securities Act is not
      applicable to the Company.

     

    6. No
      later
      than 8:30 am (NY time) on December 6, 2008, the Company shall file a Current
      Report on Form 8-K disclosing (i) any closings under the New Debt Financing
      and
      the material terms thereof, and (ii) the transactions contemplated by this
      Agreement. The Company shall consult with the Holders in issuing any other
      press
      releases with respect to the transactions contemplated hereby.

     

    7. Except
      as
      expressly set forth herein, all of the terms and conditions of the Transaction
      Documents shall continue in full force and effect after the execution of this
      Agreement and shall not be in any way changed, modified or superseded by the
      terms set forth herein. 

     

    8. This
      Agreement may be executed in two or more counterparts and by facsimile signature
      or otherwise, and each of such counterparts shall be deemed an original and
      all
      of such counterparts together shall constitute one and the same
      agreement.

     

    9. The
      Company has elected to provide all Holders with the same terms and form of
      consent and waiver for the convenience of the Company and not because it was
      required or requested to do so by the Holders. The obligations of each Holder
      under this Agreement, and any Transaction Document are several and not joint
      with the obligations of any other Holder, and no Holder shall be responsible
      in
      any way for the performance or non-performance of the obligations of any other
      Holder under this Agreement or any Transaction Document. Nothing contained
      herein or in any Transaction Document, and no action taken by any Holder
      pursuant thereto, shall be deemed to constitute the Holders as a partnership,
      an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Holders are in any way acting in concert or as a group
      with
      respect to such obligations or the transactions contemplated by this consent
      and
      waiver or the Transaction Documents. Each Holder shall be entitled to
      independently protect and enforce its rights, including without limitation,
      the
      rights arising out of this Agreement or out of the Transaction Documents, and
      it
      shall not be necessary for any other Holder to be joined as an additional party
      in any proceeding for such purpose. Each Holder has been represented by its
      own
      separate legal counsel in their review and negotiation of this Agreement and
      the
      Transaction Documents. 

     

    [SIGNATURE
      PAGES FOLLOW]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, this Consent and Waiver Agreement is executed as of the date
      first set forth above.

    

    
      	 	
              CYBERDEFENDER
                CORPORATION

            
	 	 
	 	 
	 	
              By:

            	
              /s/
                Gary Guseinov

            
	 	
              Name:
                Gary Guseinov

            
	 	
              Title:
                Chief Executive Officer

            

    

    

    [signature
      page(s) of Holders to follow]

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    COUNTERPART
      SIGNATURE PAGE

    OF
      HOLDER
      TO

    CONSENT
      AND WAIVER,

    AMONG
      CYBERDEFENDER CORPORATION AND

    THE
      HOLDERS THEREUNDER

    

    
      	 	
              Name
                of Holder: Bushido Capital Master Fund LP

            
	 	 
	 	
              By:
                

            	
              /s/
                Ronald S. Dagar

            
	 	 
	 	
              Name:
                Ronald S. Dagar

            
	 	 
	 	
              Title:
                Director

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    COUNTERPART
      SIGNATURE PAGE

    OF
      HOLDER
      TO

    CONSENT
      AND WAIVER,

    AMONG
      CYBERDEFENDER CORPORATION AND

    THE
      HOLDERS THEREUNDER

    

    
      	 	
              Name
                of Holder: BCMF Trustees LLC

            
	 	 
	 	
              By:

            	
              /s/
                Ronald S. Dagar

            
	 	 
	 	
              Name:
                Ronald S. Dagar

            
	 	 
	 	
              Title:
                Director

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    COUNTERPART
      SIGNATURE PAGE

    OF
      HOLDER
      TO

    CONSENT
      AND WAIVER,

    AMONG
      CYBERDEFENDER CORPORATION AND

    THE
      HOLDERS THEREUNDER

    

    
      	 	
              Name
                of Holder: Pierce Diversified Strategies Master Fund

              LLC
                Series BUS

            
	 	 
	 	
              By:

            	
              /s/
                Ronald S. Dagar

            
	 	 
	 	
              Name:
                Ronald S. Dagar

            
	 	 
	 	
              Title:
                Attorney in Fact

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    COUNTERPART
      SIGNATURE PAGE

    OF
      HOLDER
      TO

    CONSENT
      AND WAIVER,

    AMONG
      CYBERDEFENDER CORPORATION AND

    THE
      HOLDERS THEREUNDER

    

    
      	 	
              Name
                of Holder: CAMOFI Master LDC

            
	 	 
	 	
              By:

            	
              /s/
                Richard Smithline

            
	 	 
	 	
              Name:
                Richard Smithline

            
	 	 
	 	
              Title:
                Director

            

    

     

    
      
        
        

      

      
        9

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