COMMON STOCK PURCHASE WARRANT To Purchase ___________ Shares of Common Stock of CyberDefender Corporation
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
COMMON
STOCK PURCHASE WARRANT
To
Purchase ___________
Shares
of
Common Stock of
CyberDefender
Corporation
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”)
certifies that, for value received, _______________
(the
“Holder”),
is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
“Initial
Exercise Date”)
and on
or prior to the close of business on the fifth anniversary of the Initial
Exercise Date (the “Termination
Date”)
but
not thereafter, to subscribe for and purchase from CyberDefender Corporation,
a
California corporation (the “Company”),
____________
shares
(the “Warrant
Shares”)
of
Common Stock, no par value, of the Company (the “Common
Stock”).
The
purchase price of one share of Common Stock under this Warrant shall be equal
to
the Exercise Price, as defined in Section 2(b).
| Section 1. |
Definitions.
Capitalized terms used and not otherwise defined herein shall have
the
meanings set forth in that certain Securities Purchase Agreement
(the
“Purchase
Agreement”),
dated the Initial Exercise Date, between the Company and the
Holder.
|
| Section 2. |
Exercise.
|
|
a)
|
Exercise
of Warrant.
Exercise of the purchase rights represented by this Warrant may be
made at
any time or times on or after the Initial Exercise Date and on or
before
the Termination Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise Form annexed hereto (or
such
other office or agency of the Company as it may designate by notice
in
writing to the registered Holder at the address of such Holder appearing
on the books of the Company); provided,
however,
within 5 Trading Days of the date said Notice of Exercise is delivered
to
the Company, the Holder shall have surrendered this Warrant to the
Company
and the Company shall have received payment of the aggregate Exercise
Price of the shares thereby purchased by wire transfer or cashier’s check
drawn on a United States bank.
|
|
b)
|
Exercise
Price.
The exercise price per share of Common Stock under this Warrant shall
be
$1.25, subject to adjustment hereunder (the “Exercise
Price”).
|
|
c)
|
Exercise
Limitations;
Xxxxxx’s
Restrictions.
The Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2(c) or otherwise, to the extent that
after
giving effect to such issuance after exercise, the Holder (together
with
the Holder’s affiliates), as set forth on the applicable Notice of
Exercise, would beneficially own in excess of 4.99% of the number
of
shares of the Common Stock issued and outstanding immediately after
giving
effect to such issuance. For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder
and its
affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which the determination
of
such sentence is being made, but shall exclude the number of shares
of
Common Stock which would be issuable upon (A) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder
or
any of its affiliates and (B) exercise or conversion of the unexercised
or
nonconverted portion of any other securities of the Company (including,
without limitation, any other Notes or Warrants) subject to a limitation
on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its affiliates. Except as
set forth in the preceding sentence, for purposes of this Section
2(c),
beneficial ownership shall be calculated in accordance with Section
13(d)
of the Exchange Act, it being acknowledged by Holder that the Company
is
not representing to Holder that such calculation is in compliance
with
Section 13(d) of the Exchange Act and Holder is solely responsible
for any
schedules required to be filed in accordance therewith. To the extent
that
the limitation contained in this Section 2(c) applies, the determination
of whether this Warrant is exercisable (in relation to other securities
owned by the Holder) and of which a portion of this Warrant is exercisable
shall be in the sole discretion of such Xxxxxx, and the submission
of a
Notice of Exercise shall be deemed to be such Holder’s determination of
whether this Warrant is exercisable (in relation to other securities
owned
by such Holder) and of which portion of this Warrant is exercisable,
in
each case subject to such aggregate percentage limitation, and the
Company
shall have no obligation to verify or confirm the accuracy of such
determination. For purposes of this Section 2(c), in determining
the
number of outstanding shares of Common Stock, the Holder may rely
on the
number of outstanding shares of Common Stock as reflected in (x)
the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a
more recent public announcement by the Company or (z) any other notice
by
the Company or the Company’s Transfer Agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral request
of the Holder, the Company shall within two Trading Days confirm
orally
and in writing to the Holder the number of shares of Common Stock
then
outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by
the
Holder or its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The provisions of
this
Section 2(c) may be waived by the Holder upon, at the election of
the
Holder, not less than 61 days’ prior notice to the Company, and the
provisions of this Section 2(c) shall continue to apply until such
61st
day (or such later date, as determined by the Holder, as may be specified
in such notice of waiver).
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d)
|
Mechanics
of Exercise.
|
| i) |
Authorization
of Warrant Shares.
The Company covenants that all Warrant Shares which may be issued
upon the
exercise of the purchase rights represented by this Warrant will,
upon
exercise of the purchase rights represented by this Warrant, be duly
authorized, validly 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 with such
issue).
The Company covenants that during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares
upon
the exercise of any purchase rights under this Warrant. The Company
further covenants 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
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may
be
necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or
of any
requirements of the Trading Market upon which the Common Stock may
be
listed.
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| ii) |
Delivery
of Certificates Upon Exercise.
Certificates for shares purchased hereunder shall be transmitted
by the
transfer agent of the Company to the Holder by crediting the account
of
the Holder’s prime broker with the Depository Trust Company through its
Deposit Withdrawal Agent Commission (“DWAC”)
system if the Company is a participant in such system, and otherwise
by
physical delivery to the address specified by the Holder in the Notice
of
Exercise within 7 Trading Days from the delivery to the Company of
the
Notice of Exercise Form, surrender of this Warrant and payment of
the
aggregate Exercise Price as set forth above (“Warrant
Share Delivery Date”).
This Warrant shall be deemed to have been exercised on the date the
Exercise Price is received by the Company. The Warrant Shares shall
be
deemed to have been issued, and Holder or any other person so designated
to be named therein shall be deemed to have become a holder of record
of
such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price and all
taxes
required to be paid by the Holder, if any, pursuant to Section 2(d)(vi)
prior to the issuance of such shares, have been paid.
|
| iii) |
Delivery
of New Warrants Upon Exercise.
If this Warrant shall have been exercised in part, the Company shall,
at
the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights
of
Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical
with
this Warrant.
|
| iv) |
Rescission
Rights.
If the Company fails to cause its transfer agent to transmit to the
Holder
a certificate or certificates representing the Warrant Shares by
the
Warrant Share Delivery Date, then the Holder will have the right
to
rescind such exercise.
|
| v) |
No
Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be
issued upon the exercise of this Warrant. As to any fraction of a
share
which Holder would otherwise be entitled to purchase upon such exercise,
the Company shall pay a cash adjustment in respect of such final
fraction
in an amount equal to such fraction multiplied by the Exercise
Price.
|
| vi) |
Charges,
Taxes and Expenses.
Issuance of certificates for Warrant Shares shall be made without
charge
to the Holder for any issue or transfer tax or other incidental expense
in
respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall
be
issued in the name of the Holder or in such name or names as may
be
directed by the Holder; provided,
however,
that in the event certificates for Warrant Shares are to be issued
in a
name other than the name of the Holder, this Warrant when surrendered
for
exercise shall be accompanied by the Assignment Form attached hereto
duly
executed by the Holder; and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any
transfer
tax incidental thereto.
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| vii) |
Closing
of Books.
The Company will not close its stockholder books or records in any
manner
which prevents the timely exercise of this Warrant, pursuant to the
terms
hereof.
|
| Section 3. |
Certain Adjustments.
|
| a) |
Stock
Dividends and Splits.
If the Company, at any time while this Warrant is outstanding: (A)
pays a
stock dividend or otherwise make a distribution or distributions
on shares
of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt,
shall
not include any shares of Common Stock issued by the Company pursuant
to
this Warrant), (B) subdivides outstanding shares of Common Stock
into a
larger number of shares, (C) combines (including by way of reverse
stock
split) outstanding shares of Common Stock into a smaller number of
shares,
or (D) issues by reclassification of shares of the Common Stock any
shares
of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be
the
number of shares of Common Stock (excluding treasury shares, if any)
issued and outstanding before such event and of which the denominator
shall be the number of shares of Common Stock issued and outstanding
after
such event and the number of shares issuable upon exercise of this
Warrant
shall be proportionately adjusted. Any adjustment made pursuant to
this
Section 3(a) shall become effective immediately after the record
date for
the determination of stockholders entitled to receive such dividend
or
distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or
re-classification.
|
|
b)
|
Subsequent
Equity Sales.
If the Company or any Subsidiary thereof, as applicable, at any time
while
this Warrant is outstanding, shall offer, sell, grant any option
to
purchase or offer, sell or grant any right to reprice its securities,
or
otherwise dispose of or issue (or announce any offer, sale, grant
or any
option to purchase or other disposition) any Common Stock or Common
Stock
Equivalents entitling any Person to acquire shares of Common Stock,
at an
effective price per share less than the then Exercise Price (such
issuances collectively, a “Dilutive
Issuance”),
as adjusted hereunder (if the holder of the Common Stock or Common
Stock
Equivalents so issued shall at any time, whether by operation of
purchase
price adjustments, reset provisions, floating conversion, exercise
or
exchange prices or otherwise, or due to warrants, options or rights
per
share which is issued in connection with such issuance, be entitled
to
receive shares of Common Stock at an effective price per share which
is
less than the Exercise Price, such issuance shall be deemed to have
occurred for less than the Exercise Price), then, the Exercise Price
shall
be reduced to equal a price (calculated to the nearest whole cent
(with
one-half being rounded upward)) 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
issue
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 such Common Stock or Common Stock Equivalents are issued.
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c)
|
Calculations.
All calculations under this Section 3 shall be made to the nearest
cent or
the nearest 1/100th of a share, as the case may be. The number of
shares
of Common Stock outstanding at any given time shall not includes
shares of
Common Stock owned or held by or for the account of the Company,
and the
description of any such shares of Common Stock shall be considered
on
issue or sale of Common Stock. For purposes of this Section 3, the
number
of shares of Common Stock deemed to be issued and outstanding as
of a
given date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) issued and
outstanding.
|
| d) |
Notice
to Holders.
|
i. Adjustment
to Exercise Price.
Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company
shall promptly mail to each Holder a notice setting forth the Exercise Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.
ii. Notice
to Allow Exercise by Xxxxxx.
If (A)
the Company shall declare a dividend (or any other distribution) on the Common
Stock; (B) the Company shall declare a special nonrecurring cash dividend on
or
a redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights;; (D) the
Company shall authorize the voluntary or involuntary dissolution, liquidation
or
winding up of the affairs of the Company; then, in each case, the Company shall
cause to be mailed to the Holder at its last addresses as it shall appear upon
the Warrant Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating
the
date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled
to
such dividend, distributions, redemption, rights or warrants are to be
determined or; provided,
that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this Warrant during the
20-day period commencing the date of such notice to the effective date of the
event triggering such notice.
6
of
15
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e)
|
Fundamental
Transaction.
If, at any time while this Warrant is outstanding, (A) the Company
effects
any merger or consolidation of the Company with or into another Person,
(B) the Company effects any sale of all or substantially all of its
assets
in one or a series of related transactions, (C) any tender offer
or
exchange offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender
or
exchange their shares for other securities, cash or property, or
(D) the
Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively
converted
into or exchanged for other securities, cash or property (in any
such
case, a “Fundamental
Transaction”),
then, upon any subsequent conversion of this Warrant, the Holder
shall
have the right to receive, for each Warrant Share that would have
been
issuable upon such exercise absent such Fundamental Transaction,
at the
option of the Holder, (a) upon exercise of this Warrant, the number
of
shares of Common Stock of the successor or acquiring corporation
or of the
Company, if it is the surviving corporation, and Alternate Consideration
receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a Holder of the
number
of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) cash equal to the value of
this
Warrant as determined in accordance with the Black-Scholes option
pricing
formula (the “Alternate
Consideration”).
For purposes of any such exercise, the determination of the Exercise
Price
shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect
of one
share of Common Stock in such Fundamental Transaction, and the Company
shall apportion the Exercise Price among the Alternate Consideration
in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock
are
given any choice as to the securities, cash or property to be received
in
a Fundamental Transaction, then the Holder shall be given the same
choice
as to the Alternate Consideration it receives upon any exercise of
this
Warrant following such Fundamental Transaction. To the extent necessary
to
effectuate the foregoing provisions, any successor to the Company
or
surviving entity in such Fundamental Transaction shall issue to the
Holder
a new warrant consistent with the foregoing provisions and evidencing
the
Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction
is
effected shall include terms requiring any such successor or surviving
entity to comply with the provisions of this paragraph (f) and insuring
that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
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f)
|
Exempt
Issuance.
Notwithstanding the foregoing, no adjustments, Alternate Consideration
nor
notices shall be made, paid or issued under this Section 3 in respect
of
an Exempt Issuance.
|
|
g)
|
Voluntary
Adjustment By Company.
The Company may at any time during the term of this Warrant reduce
the
then current Exercise Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the
Company.
|
| Section 4. |
Transfer
of Warrant.
|
|
a)
|
Transferability.
Subject to compliance with any applicable securities laws and the
conditions set forth in Sections 5 and 4(d) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Warrant and all rights
hereunder are transferable, in whole or in part, upon surrender of
this
Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto
duly
executed by the Holder or its agent or attorney and funds sufficient
to
pay any transfer taxes payable upon the making of such transfer.
Upon such
surrender and, if required, such payment, the Company shall execute
and
deliver a new Warrant or Warrants in the name of the assignee or
assignees
and in the denomination or denominations specified in such instrument
of
assignment, and shall issue to the assignor a new Warrant evidencing
the
portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled. A Warrant, if properly assigned, may be exercised by
a new
holder for the purchase of Warrant Shares without having a new Warrant
issued.
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|
b)
|
New
Warrants.
This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together
with
a written notice specifying the names and denominations in which
new
Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be
involved in such division or combination, the Company shall execute
and
deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants
to be divided or combined in accordance with such
notice.
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15
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c)
|
Warrant
Register.
The Company shall register this Warrant, upon records to be maintained
by
the Company for that purpose (the “Warrant
Register”),
in the name of the record Holder hereof from time to time. The Company
may
deem and treat the registered Holder of this Warrant as the absolute
owner
hereof for the purpose of any exercise hereof or any distribution
to the
Holder, and for all other purposes, absent actual notice to the
contrary.
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|
d)
|
Transfer
Restrictions.
If,
at the time
of the surrender of this Warrant in connection with any transfer
of this
Warrant, the transfer of this Warrant shall not be registered pursuant
to
an effective registration
statement under the Securities Act
and under
applicable state securities or blue sky laws, the Company may require,
as
a condition of allowing such transfer (i) that the Holder or transferee
of
this Warrant, as the case may be, furnish to the Company a written
opinion
of counsel (which opinion shall be in form, substance and scope customary
for opinions of counsel in comparable transactions) to the effect
that
such transfer may be made without
registration under the
Securities Act and under applicable state securities or blue sky
laws,
(ii) that the holder or transferee execute and deliver to the Company
an
investment letter in form and substance acceptable to the Company
and
(iii) that the transferee be an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the
Securities Act or a qualified institutional buyer as defined in Rule
144A(a) under the Securities Act.
|
| Section 5. |
Redemption
by the Company.
This Warrant may be redeemed by the Company by providing at least
14 days
prior written notice to the Holder (the “Redemption Notice”) of its
intention to redeem the Warrant for a payment of $0.001 per Warrant
Share.
The Redemption Notice shall state the date upon which the redemption
shall
take place (the “Redemption Date”). After receipt of the Redemption
Notice, the Holder shall have the right to exercise the Warrant at
any
time prior to the Redemption Date. Anything to the contrary herein
notwithstanding, the Company shall not and may not deliver a Redemption
Notice unless (i) the average VWAP for the 10 Trading Days immediately
prior to the Redemption Notice (the “Lookback Period”) are equal to or
greater than 2.5 times the then current Exercise Price, (ii) the
average
daily volume of the Common Stock during the Lookback Period is at
least
50,000 shares and (iii) there is an effective registration statement
covering the resale of the Warrant
Shares.
|
| Section 6. |
Miscellaneous.
|
|
a)
|
Title
to Warrant.
Prior to the Termination Date and subject to compliance with applicable
laws and Section 4 of this Warrant, this Warrant and all rights hereunder
are transferable, in whole or in part, at the office or agency of
the
Company by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant together with the Assignment Form annexed
hereto
properly endorsed. The transferee shall sign an investment letter
in form
and substance reasonably satisfactory to the
Company.
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b)
|
No
Rights as Shareholder Until Exercise.
This Warrant does not entitle the Holder to any voting rights or
other
rights as a shareholder of the Company prior to the exercise hereof.
Upon
the surrender of this Warrant and the payment of the aggregate Exercise
Price (or by means of a cashless exercise), the Warrant Shares so
purchased shall be and be deemed to be issued to such Holder as the
record
owner of such shares as of the close of business on the later of
the date
of such surrender or payment.
|
|
c)
|
Loss,
Theft, Destruction or Mutilation of Warrant.
The Company covenants that upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant or any stock certificate relating to the
Warrant Shares, and in case of loss, theft or destruction, of indemnity
or
security reasonably satisfactory to it (which, in the case of the
Warrant,
shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated,
the
Company will make and deliver a new Warrant or stock certificate
of like
tenor and dated as of such cancellation, in lieu of such Warrant
or stock
certificate.
|
|
d)
|
Saturdays,
Sundays, Holidays, etc.
If the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall be a Saturday,
Sunday or a legal holiday, then such action may be taken or such
right may
be exercised on the next succeeding day not a Saturday, Sunday or
legal
holiday.
|
|
e)
|
Authorized
Shares.
The Company covenants that during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares
upon
the exercise of any purchase rights under this Warrant. The Company
further covenants 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
Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may
be
necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or
of any
requirements of the Trading Market upon which the Common Stock may
be
listed.
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Except
and to the extent as waived or consented to by the Holder, the Company shall
not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities 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 actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value,
(b)
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
|
f)
|
Jurisdiction.
All questions concerning the construction, validity, enforcement
and
interpretation of this Warrant shall be determined in accordance
with the
provisions of the Purchase
Agreement.
|
|
g)
|
Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the
exercise
of this Warrant, if not registered, will have restrictions upon resale
imposed by state and federal securities
laws.
|
|
h)
|
Nonwaiver
and Expenses.
No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such
right or
otherwise prejudice Holder’s rights, powers or remedies, notwithstanding
the fact that all rights hereunder terminate on the Termination Date.
If
the Company willfully and knowingly fails to comply with any provision
of
this Warrant, which results in any material damages to the Holder,
the
Company shall pay to Holder such amounts as shall be sufficient to
cover
any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by
Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies
hereunder.
|
|
i)
|
Notices.
Any notice, request or other document required or permitted to be
given or
delivered to the Holder by the Company shall be delivered in accordance
with the notice provisions of the Purchase
Agreement.
|
11
of
15
|
j)
|
Limitation
of Liability.
No provision hereof, in the absence of any affirmative action by
Holder to
exercise this Warrant or purchase Warrant Shares, and no enumeration
herein of the rights or privileges of Holder, shall give rise to
any
liability of Holder for the purchase price of any Common Stock or
as a
stockholder of the Company, whether such liability is asserted by
the
Company or by creditors of the
Company.
|
|
k)
|
Remedies.
Holder, in addition to being entitled to exercise all rights granted
by
law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that
monetary damages would not be adequate compensation for any loss
incurred
by reason of a breach by it of the provisions of this Warrant and
hereby
agrees to waive the defense in any action for specific performance
that a
remedy at law would be adequate.
|
|
l)
|
Successors
and Assigns.
Subject to applicable securities laws, this Warrant and the rights
and
obligations evidenced hereby shall inure to the benefit of and be
binding
upon the successors of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to
be for
the benefit of all Holders from time to time of this Warrant and
shall be
enforceable by any such Holder or holder of Warrant
Shares.
|
|
m)
|
Amendment.
This Warrant may be modified or amended or the provisions hereof
waived
with the written consent of the Company and the holders of at least
51% of
the unexercised Warrant Shares then issuable pursuant to all
Warrants.
|
|
n)
|
Severability.
Wherever possible, each provision of this Warrant shall be interpreted
in
such manner as to be effective and valid under applicable law, but
if any
provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent
of such
prohibition or invalidity, without invalidating the remainder of
such
provisions or the remaining provisions of this
Warrant.
|
|
o)
|
Headings.
The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this
Warrant.
|
********************
12
of
15
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated:
_________________, 2008
|
CYBERDEFENDER
CORPORATION
|
|
Name:
Xxxx Xxxxxxxx
Title:
Chief Executive Officer
|
13
of
15
NOTICE
OF EXERCISE
TO:
CYBERDEFENDER CORPORATION
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full),
and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
(2) Payment
shall be in lawful money of the United States.
(3) Please
issue a certificate or certificates representing said Warrant Shares in the
name
of the undersigned or in such other name as is specified below:
|
_______________________________
|
|
|
Tax
ID Number
|
_______________________________
|
The
Warrant Shares shall be delivered to the following:
|
_______________________________
|
|
|
_______________________________
|
|
|
_______________________________
|
(4)
Accredited
Investor.
The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of
Investing Entity:
_______________________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
_________________________________________________
Name
of
Authorized Signatory:
___________________________________________________________________
Title
of
Authorized Signatory:
____________________________________________________________________
Date:
_______________________________________________________________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this
form
and supply required information.
Do
not
use this form to exercise the warrant.)
FOR
VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated:
______________, _______
|
Holder’s Signature:
|
_____________________________
|
|
|
Holder’s
Address:
|
_____________________________
|
|
|
|
_____________________________
|
Signature
Guaranteed: ___________________________________________
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.
