AMENDED AND RESTATED CONSENT AND WAIVER

Section 1.    Consent to Officer Loan . The undersigned 75% Holders hereby waive, for and on behalf of all the holders of Debentures pursuant to Section 9(k) of the Debentures, the prohibition set forth in Section 7(a) of the Debentures, solely for the purpose of consenting to the Company incurring the Officer Loan.  

Section 2.    Waiver of Second Registration Statement and Liquidated Damages . The undersigned 75% Holders hereby waive, for and on behalf of all the holders of Debentures pursuant to Section 6(f) of the RRA, (i) the requirement that the Company file the Second Registration Statement, (ii) all liquidated damages that would otherwise be owing under the RRA in respect thereof from and after December 19, 2007, and (iii) all interest that would otherwise be owing in connection with the Company’s failure to timely pay the Liquidated Damages.  

Section 3.    Waiver of Event of Default under Section 8(a)(iii) of the Debentures . The undersigned 75% Holders hereby waive, for and on behalf of all the holders of Debentures pursuant to Section 9(k) of the Debentures, the Event of Default under Section 8(a)(iii) of the Debentures occurring as a result of the Company’s failure to file the Second Registration Statement by its Filing Date, failure to obtain effectiveness of the Second Registration Statement by its Effectiveness Date and failure to timely pay the January 1 Interest Payment, the Liquidated Damages and interest thereon; provided that such waiver shall not extinguish the Company’s obligation to pay the Liquidated Damages and the January 1 Interest Payment, as provided herein.

Section 4.    Consent to Issuance of Damages Shares in Lieu of Cash for Liquidated Damages . The undersigned 75% Holders hereby consent, for and on behalf of all the Purchasers, to the Company issuing the Damages Shares, at each Purchaser’s election, to the so electing Purchasers on a pro rata basis as full and final payment of the Liquidated Damages, and hereby accept, for and on behalf of all the so electing Purchasers, the Damages Shares as full and final payment of the Liquidated Damages.

Section 5.    Consent to Issuance of Interest Payment Shares in Lieu of Cash for January 1 Interest Payment . The undersigned 75% Holders hereby consent, for and on behalf of all the Purchasers, to the Company issuing the applicable number of Interest Payment Shares, at each Purchaser’s election, to each so electing Purchaser as full and final payment of the January 1 Interest Payment, and hereby accept, for and on behalf of all the so electing Purchasers, the Interest Payment Shares as full and final payment of the January 1 Interest Payment.

Section 6.    Consent of 75% Holders to Issuance of Additional Debentures as Payment for Liquidated Damages and January 1 Interest Payment . The 75% Holders hereby waive, for and on behalf of all Purchasers pursuant to Section 9(k) of the Debentures and solely in connection with the possible issuance of Additional Debentures as payment of the Liquidated Damages and the January 1 Interest Payment (to the extent such election is made by each Purchaser), the prohibitions set forth in Sections 7(a) and (b) of the Debentures. The Company shall issue to each so electing Purchaser an Additional Debenture in the principal amount of such Purchaser’s January 1 Interest Payment and applicable portion of the Liquidated Damages in full satisfaction thereof. No additional warrants shall be issued as a result of the issuance of Additional Debentures.

Section 7.    Waiver of Anti-Dilution Rights . The undersigned 75% Holders hereby waive, for and on behalf of all the Purchasers pursuant to Section 9(k) of the Debentures and Section 5(l) of the Warrants, solely in connection with the issuance of the Additional Debentures, Damages Shares and the Interest Payment Shares, any adjustment to the Conversion Price (as defined in the Debentures) and the Exercise Price (as defined in the Warrants).

Section 8.    Effectiveness . This Consent and Waiver shall be deemed effective when executed and delivered to the Company by (i) the Agent, and (ii) the holders of at least 75% in principal amount of the currently outstanding Debentures.

Section 9.      Counterparts . This Consent may be executed in separate original or facsimile counterparts, each of which shall be deemed to be an original instrument and all of which taken together shall constitute a single instrument.

Section 10.      Recitals Incorporated . The Recitals of this Consent and Waiver are incorporated herein and made a part hereof.

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

Original Issue Date: ______________, 2008

Original Conversion Price (subject to adjustment herein): $0.85

THIS 10% CONVERTIBLE DEBENTURE of CyberDefender Corporation, a California corporation, having its principal place of business at 617 W. 7th Street, Suite 401, Los Angeles CA 90017 (the “ Company ”) (this debenture, the “ Debenture ” and collectively with the other such series of debentures, the “ Debentures ”) is issued to the Holder in lieu of cash as full and final payment of [interest due to the Holder, for the fiscal quarter of the Company ended December 31, 2007, under that certain 10% Secured Convertible Debenture due September 12, 2009 in the principal amount of $__________ held by the Holder, and default interest thereon]   [liquidated damages due to the Holder in accordance with that certain Amended and Restated Consent and Waiver dated as of August 19, 2008 executed by the holders of at least 75% of the outstanding principal amount of the Debentures] .

FOR VALUE RECEIVED, the Company promises to pay to _____________ or its registered assigns (the “ Holder ”), or shall have paid pursuant to the terms hereunder, the principal sum of $_________ by _________________, 2010 (the “ Maturity Date ”), or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture is subject to the following additional provisions:

Section 1 .   Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) the capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

“ Alternate Consideration ” shall have the meaning set forth in Section 5(e).

“ Bankruptcy Event ” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment; (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

“ Base Conversion Price ” shall have the meaning set forth in Section 5(b).

“ Business Day ” means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“ Buy-In ” shall have the meaning set forth in Section 4(d)(v).

“ Cash Sale Redemption Amount ” shall equal the sum of (i) 100% of the principal amount of this Debenture to be prepaid, plus all accrued and unpaid interest thereon, (ii) the principal amount of this Debenture to be prepaid, plus all other accrued and unpaid interest hereon, divided by the Conversion Price on the closing date of the applicable event multiplied by the “Effective Price” (defined below), and (iii) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture. The “ Effective Price ” shall be the cash consideration paid by the acquirer in such event (less the amount set forth in clause (i) above) divided by the sum of; (x) the issued and outstanding shares of Common Stock of the Company then outstanding and (y) the shares of Common Stock into which the outstanding Debentures may be converted on the day immediately preceding the record date fixed for determining the holders of shares of Common Stock eligible to receive a distribution (or if no such date has been fixed, the date of the day immediately preceding the closing of the transaction) and (z) the number of shares deemed issuable to the Warrant holders pursuant to the mandatory redemption provisions in the Warrants which take effect upon sale of assets for cash consideration whether or not any Warrant holder shall have elected to have their Warrants Redeemed; provided , however , that the number of shares of Common Stock issuable on conversion of the Debentures and issuable upon exercise of the Warrants for this purpose shall be determined on a fully converted or exercised basis and ignoring any conversion or exercise limitations therein).

“ Change of Control Transaction ” means the occurrence after the date hereof of any of (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 40% of the voting securities of the Company (other than by means of conversion or exercise of the Debentures and the Securities issued together with the Debentures), or (ii) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 60% of the aggregate voting power of the Company or the successor entity of such transaction, or (iii) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than 60% of the aggregate voting power of the acquiring entity immediately after the transaction, or (iv) a replacement at one time or within a three year period of more than one-half of the members of the Company’s board of directors which is not approved by a majority of those individuals who are members of the board of directors on the date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was approved by a majority of the members of the board of directors who are members on the date hereof), or (v) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (i) through (iv) above.

“ Common Stock ” means the common stock, no par value per share, of the Company and stock of any other class of securities into which such securities may hereafter be reclassified or changed into.

“ Conversion Date ” shall have the meaning set forth in Section 4(a).

“ Conversion Price ” shall have the meaning set forth in Section 4(b).

“ Conversion Shares ” means, collectively, the shares of Common Stock issuable upon conversion of this Debenture in accordance with the terms hereof.

“ Debenture Register ” shall have the meaning set forth in Section 2(c).

“ Dilutive Issuance ” shall have the meaning set forth in Section 5(b).

“ Dilutive Issuance Notice ” shall have the meaning set forth in Section 5(b).

“ Equity Conditions ” shall mean, during the period in question, (i) the Company shall have duly honored all conversions and redemptions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (ii) the Company shall have paid all liquidated damages and other amounts owing to the Holder in respect of this Debenture, (iii) there is an effective registration statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the shares issuable pursuant to the Transaction Documents (and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future), (iv) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed for trading on such Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future), (v) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the shares issuable pursuant to the Transaction Documents, (vi) there is no existing Event of Default or no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default, (vii) the issuance of the shares in question (or, in the case of an Optional Redemption, the shares issuable upon conversion in full of the Optional Redemption Amount) to the Holder would not violate the limitations set forth in Section 4(c)(i) herein, (viii) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated and (ix) the Holder is not in possession of any information provided by the Company that constitutes, or may constitute, material non-public information.

“ Event of Default ” shall have the meaning set forth in Section 8.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

     “ Forced Conversion ” shall have the meaning set forth in Section 6(c).

“ Forced Conversion Date ” shall have the meaning set forth in Section 6(c).

“ Forced Conversion Notice ” shall have the meaning set forth in Section 6(c).

“ Forced Conversion Notice Date ” shall have the meaning set forth in Section 6(c).

“ Fundamental Transaction ” shall have the meaning set forth in Section 5(e).

“ Interest Conversion Rate ” means 85% of the lesser of (i) the average of the VWAPs for the 10 consecutive Trading Days ending on the Trading Day that is immediately prior to the applicable Interest Payment Date or (ii) the average of the VWAPs for the 10 consecutive Trading Days ending on the Trading Day that is immediately prior to the date the applicable Interest Conversion Shares are issued and delivered, if such date is after the Interest Payment Date.

“ Interest Conversion Shares ” shall have the meaning set forth in Section 2(a).

“ Interest Notice Period ” shall have the meaning set forth in Section 2(a).

“ Interest Payment Date ” shall have the meaning set forth in Section 2(a).

“ Interest Share Amount ” shall have the meaning set forth in Section 2(a).

“ Late Fees ” shall have the meaning set forth in Section 2(d).

“ Mandatory Default Amount ” means the sum of (i) the greater of (A) 130% of the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, or (B) the outstanding principal amount of this Debenture, plus all accrued and unpaid interest hereon, divided by the Conversion Price on the date the Mandatory Default Amount is either (a) demanded (if demand or notice is required to create an Event of Default) or otherwise due or (b) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in full, whichever has a higher VWAP, and (ii) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.

“ New York Courts ” shall have the meaning set forth in Section 9(d).

“ Notice of Conversion ” shall have the meaning set forth in Section 4(a).

“ Optional Redemption ” shall have the meaning set forth in Section 6(a).

“ Optional Redemption Amount ” means the sum of (i) 150% of the principal amount of this Debenture,(ii) accrued but unpaid interest then outstanding and (iii) all liquidated damages and other amounts due in respect of the Debenture.

“ Optional Redemption Date ” shall have the meaning set forth in Section 6(a).

“ Optional Redemption Notice ” shall have the meaning set forth in Section 6(a).

“ Optional Redemption Notice Date ” shall have the meaning set forth in Section 6(a).

“ Original Issue Date ” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and regardless of the number of instruments which may be issued to evidence such Debentures.

“ Permitted Indebtedness ” means (a) the Indebtedness existing on the Original Issue Date and (b) [Intentionally Omitted], and (c) lease obligations and purchase money indebtedness of up to $250,000, in the aggregate, incurred in connection with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets and (d) indebtedness to a strategic investor in connection with a strategic commercial agreement, to a commercial lender or pursuant to the acquisition of another corporation or entity by the Company, provided that an indebtedness incurred under this clause (d), (i) is expressly subordinate to the Debentures pursuant to a written subordination agreement with the Purchasers that is acceptable to each Purchaser in its sole and absolute discretion and (ii) matures at a date later than the Maturity Date.

“ Permitted Lien ” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company) have been established in accordance with GAAP; (b) Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien; (c) Liens incurred in connection with Permitted Indebtedness under clause (a) thereunder; and (d) Liens incurred in connection with Permitted Indebtedness under clause (c) thereunder, provided that such Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired or leased.

“ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Purchase Agreement ” means the Securities Purchase Agreement, dated as of September 12, 2006, among the Company and the original Holders as amended, modified or supplemented from time to time in accordance with its terms.

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

“ Share Delivery Date ” shall have the meaning set forth in Section 4(d).

“ Subsidiary ” shall have the meaning set forth in the Purchase Agreement.

“ Threshold Period ” shall have the meaning set forth in Section 6(d).

“ Trading Day ” means a day on which the principal Trading Market is open for business.

“ Trading Market ” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.

“ Transaction Documents ” shall have the meaning set forth in the Purchase Agreement.

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

Section 2 .   Interest .

a)    Payment of Interest in Cash or Kind . The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 10% per annum, payable quarterly on January 1, April 1, July 1 and October 1, beginning on October 1, 2008, on each Conversion Date (as to that principal amount then being converted), on each Optional Redemption Date (as to that principal amount then being redeemed) and on the Maturity Date (each such date, an “ Interest Payment Date ”) (if any Interest Payment Date is not a Business Day, then such payment shall be due on the next succeeding Business Day) in cash or duly authorized, validly issued, fully paid and non-assessable shares of Common Stock at the Interest Conversion Rate (the dollar amount to be paid in shares, the “ Interest Share Amount ”), or a combination thereof; provided , however , that payment in shares of Common Stock may only occur if (i) all of the Equity Conditions have been met (unless waived by the Holder in writing) during the 20 Trading Days immediately prior to the applicable Interest Payment Date (the “ Interest Notice Period ”) and through and including the date such shares of Common Stock are issued to the Holder, (ii) the Company shall have given the Holder notice in accordance with the notice requirements set forth below, (iii) the aggregate dollar amount of interest payable under all Debentures on the applicable Interest Payment Date is less than 25% of the aggregate trading volume of the Common Stock during the 6 Trading Days immediately prior to the applicable Interest Payment Date multiplied by the Interest Conversion Rate as to such interest payment (by way of an example, if the aggregate amount of interest due under all Debentures on an Interest Payment Date is equal to $225,000 and the trading volume for the 6 Trading Day period prior to the applicable Interest Payment Date was 1,000,000 shares and the Interest Conversion Rate for such Interest Payment Date is equal to $2.50, the Company could make such interest payment in shares of Common Stock (since the $225,000 interest payment is less than $625,000 (1,000,000 x $2.50 = $2,500,000 x 25%)) and (iv) as to such Interest Payment Date, prior to such Interest Notice Period (but not more than 5 Trading Days prior to the commencement of such Interest Notice Period), the Company shall have delivered to the Holder’s account with The Depository Trust Company a number of shares of Common Stock to be applied against such Interest Share Amount equal to the quotient of (x) the applicable Interest Share Amount divided by (y) the then Conversion Price (the “ Interest Conversion Shares ”).

b)    Company’s Election to Pay Interest in Kind . Subject to the terms and conditions herein, the decision whether to pay interest hereunder in cash, shares of Common Stock, or a combination thereof shall be at the discretion of the Company. Prior to the commencement of any Interest Notice Period, the Company shall deliver to the Holder a written notice of its election to pay interest hereunder on the applicable Interest Payment Date either in cash, shares of Common Stock or a combination thereof and the Interest Share Amount as to the applicable Interest Payment Date, provided that the Company may indicate in such notice that the election contained in such notice shall apply to future Interest Payment Dates until revised by a subsequent notice. During any Interest Notice Period, the Company’s election (whether specific to an Interest Payment Date or continuous) shall be irrevocable as to such Interest Payment Date. Subject to the aforementioned conditions, failure to timely deliver such written notice to the Holder shall be deemed an election by the Company to pay the interest on such Interest Payment Date in cash. At any time the Company delivers a notice to the Holder of its election to pay the interest in shares of Common Stock, the Company shall timely file a prospectus supplement pursuant to Rule 424 disclosing such election. The aggregate number of shares of Common Stock otherwise issuable to the Holder on an Interest Payment Date shall be reduced by the number of Interest Conversion Shares previously issued to the Holder in connection with such Interest Payment Date.

c)    Interest Calculations . Interest shall be calculated on the basis of a 360-day year consisting of 12 30-calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment in full of the principal sum, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Payment of interest in shares of Common Stock (other than the Interest Conversion Shares issued prior to an Interest Notice Period) shall otherwise occur pursuant to Section 4(d)(ii) herein and, solely for purposes of the payment of interest in shares, the Interest Payment Date shall be deemed the Conversion Date. Interest shall cease to accrue with respect to any principal amount converted, provided that the Company actually delivers the Conversion Shares within the time period required by Section 4(d)(ii). Interest hereunder will be paid to the Person in whose name this Debenture is registered on the records of the Company regarding registration and transfers of this Debenture (the “ Debenture Register ”).

d)    Late Fee . All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (“ Late Fees ”) which shall accrue daily from the date such interest is due hereunder through and including the date of payment in full. Notwithstanding anything to the contrary contained herein, if on any Interest Payment Date the Company has elected to pay accrued interest in the form of Common Stock but the Company is not permitted to pay accrued interest in Common Stock because it fails to satisfy the conditions for payment in Common Stock set forth in Section 2(a) herein, then, at the option of the Holder, the Company, in lieu of delivering either shares of Common Stock pursuant to this Section 2 or paying the regularly scheduled interest payment in cash, shall deliver, within three Trading Days of each applicable Interest Payment Date, an amount in cash equal to the product of (x) the number of shares of Common Stock otherwise deliverable to the Holder in connection with the payment of interest due on such Interest Payment Date multiplied by (y) the highest VWAP during the period commencing on the Interest Payment Date and ending on the Trading Day prior to the date such payment is made. If any Interest Conversion Shares are issued to the Holder in connection with an Interest Payment Date and are not applied against an Interest Share Amount, then the Holder shall promptly return such excess shares to the Company.

e)    Prepayment . Except as otherwise set forth in this Debenture, the Company may not prepay any portion of the principal amount of this Debenture, without the prior written consent of the Holder.

Section 3.     Registration of Transfers and Exchanges .

a)    Different Denominations . This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

b)    Investment Representations . This Debenture has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

c)    Reliance on Debenture Register . Prior to due presentment for transfer to the Company of this Debenture, the Company and any agent of the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Section 4.     Conversion .

a)    Voluntary Conversion . At any time after the Original Issue Date until this Debenture is no longer outstanding, this Debenture shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(c) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (a “ Notice of Conversion ”), specifying therein the principal amount of this Debenture to be converted and the date on which such conversion shall be effected (such date, a “ Conversion Date ”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this De