THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
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Warrant to Purchase 1,000,000
Shares of
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Common Stock (subject to
adjustment)
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WARRANT TO PURCHASE COMMON
STOCK
of
CYBEDEFENDER
CORPORATION
Void after November 7,
2013
This certifies that, for value received,
Guthy-Match LLC, or registered assigns
(“Holder”) is entitled, subject to the terms set forth
below, to purchase from CyberDefender Corporation (the
“Company”), California corporation, 1,000,000
shares of the Common Stock, no par value, of the Company (the
“Common Stock”), as constituted on the date hereof (the
“Warrant Issue Date”), upon surrender hereof, at the
principal office of the Company referred to below, with the
subscription form attached hereto duly executed, and simultaneous
payment therefor in lawful money of the United States or otherwise
as hereinafter provided, at the Exercise Price as set forth in
Section 2 below. The number and character of such shares of Common
Stock and the Exercise Price are subject to adjustment as provided
below. The term “Warrant” as used herein shall include
this Warrant any warrants delivered in substitution or exchange
therefor as provided herein. This Warrant is issued
pursuant to the conditional letter of intent agreement between the
Company and the Holder, dated October 20, 2008.
1.
Term of Warrant. Subject to the terms and
conditions set forth herein, this Warrant shall be exercisable, in
whole or in part, during the term commencing on the Warrant Issue
Date and ending at 5:00 p.m., Eastern Standard Time, on November
7, 2013 , and shall be void thereafter.
2.
Exercise Price. The exercise price at which this
Warrant may be exercised shall be $1.25 per share of Common
Stock (the “Exercise Price”), as such Exercise Price
may be adjusted from time to time pursuant to Section 4
hereof.
(a)
Method of Exercise . The purchase rights
represented by this Warrant are exercisable by the Holder in whole
or in part, at any time, or from time to time, during the term
hereof as described in Section 1 above, by the surrender of this
Warrant and the Notice of Exercise annexed hereto duly completed
and executed on behalf of the Holder, at the principal office of
the Company (or such other office or agency of the Company as it
may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company), upon (i) payment
(A) in cash or by check acceptable to the Company, (B) by
cancellation by the Holder of indebtedness or other obligations of
the Company to the Holder, or (C) by a combination of (A) and (B),
of the purchase price of the shares to be purchased.
(b)
Issuance of Shares . This Warrant shall be deemed
to have been exercised immediately prior to the close of business
on the date of its surrender for exercise as provided above, and
the person entitled to receive the shares of Common Stock issuable
upon such exercise shall be treated for all purposes as the holder
of record of such shares as of the close of business on such date.
As promptly as practicable on or after such date and in any event
within seven (7) days thereafter, the Company at its expense shall
issue and deliver to the person or persons entitled to receive the
same a certificate or certificates for the number of shares
issuable upon such exercise. In the event that this Warrant is
exercised in part, the Company at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of
shares for which this Warrant may then be exercised.
4.
No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
this Warrant. In lieu of any fractional share to which the Holder
would otherwise be entitled (after aggregating all shares that are
being issued upon such exercise), the Company shall make a cash
payment equal to the Exercise Price multiplied by such
fraction.
5.
Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement reasonably
satisfactory in form and substance to the Company or, in the case
of mutilation, on surrender and cancellation of this Warrant, the
Company at its expense shall execute and deliver, in lieu of this
Warrant, a new warrant of like tenor and amount.
6.
Rights of Stockholders. Subject to Sections 9 and 11 of this
Warrant, the Holder shall not be entitled to vote or receive
dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the Holder, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders
at any meeting thereof or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, or change of
stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until this Warrant
shall have been exercised as provided herein.
(a)
Warrant Register. The Company will maintain a register (the
“Warrant Register”) containing the names and addresses
of the Holder or Holders. Any Holder of this Warrant or
any portion thereof may change its address as shown on the Warrant
Register by written notice to the Company requesting such
change. Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by
mail to such Holder as shown on the Warrant Register and at the
address shown on the Warrant Register. Until this
Warrant is transferred on the Warrant Register of the Company, the
Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.
(b)
Warrant Agent. The Company may, by written
notice to the Holder, appoint an agent for the purpose of
maintaining the Warrant Register referred to in Section 7(a) above,
issuing the Common Stock or other securities then issuable upon the
exercise of this Warrant, exchanging this Warrant, replacing this
Warrant, or any or all of the foregoing (the “Warrant
Agent”). Thereafter, any such registration,
issuance, exchange or replacement, as the case may be, shall be
made at the office of the Warrant Agent.
(c)
Transferability and Negotiability of Warrant.
This Warrant may not be transferred or assigned in whole or in part
without compliance with all applicable federal and state securities
laws by the transferor and the transferee (including the delivery
of investment representation letters and legal opinions reasonably
satisfactory to the Company, if such are requested by the
Company). Subject to the provisions of this Warrant with
respect to compliance with the Securities Act of 1933, as amended
(the “Act”), title to this Warrant may be transferred
by endorsement (by the Holder executing the Assignment Form annexed
hereto) and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery.
(d)
Exchange of Warrant Upon a Transfer. On
surrender of this Warrant for exchange, properly endorsed on the
Assignment Form and subject to the provisions of this Warrant with
respect to compliance with the Act and with the limitations on
assignments and transfers contained in this Section 7, the Company
at its expense shall issue to or on the order of the Holder a new
warrant or warrants of like tenor, in the name of the Holder or as
the Holder (on payment by the Holder of any applicable transfer
taxes) may direct, for the number of shares issuable upon exercise
hereof.
(e)
Compliance with Securities Laws.
(i)
The Holder of this Warrant, by acceptance hereof, acknowledges that
this Warrant and the shares of Common Stock to be issued upon
exercise hereof are being acquired for investment, and that the
Holder will not offer, sell or otherwise dispose of this Warrant or
any shares of Common Stock to be issued upon exercise hereof except
under circumstances that will not result in a violation of the Act
or any state securities laws.
(ii) This
Warrant and all shares of Common Stock issued upon exercise hereof
or conversion thereof shall be stamped or imprinted with a legend
in substantially the following form (in addition to any legend
required by state securities laws):
THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
8.
Reservation of Stock. The Company covenants that
during the term this Warrant is exercisable, the Company will
reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of Common Stock upon
the exercise of this Warrant and, from time to time, will take all
steps necessary to amend its Certificate of Incorporation (the
“Certificate”) to provide sufficient reserves of shares
of Common Stock issuable upon exercise of this
Warrant. The Company further covenants that all shares
of Common Stock that may be issued upon the exercise of rights
represented by this Warrant and payment of the Exercise Price, all
as set forth herein will be duly and validly authorized and issued,
fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously
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