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Exhibit 10.87
LOCK DOWN AGREEMENT
THIS LOCK DOWN AGREEMENT (the "Agreement) is entered into as of the
20th day of July, 2006, by and among CirTran Corporation (the "Company") and
ANAHOP, Inc., a California corporation ("ANAHOP"), Xxxxxx Xxxxx ("Xxxxx"), and
Xxxx Xxxx ("Xxxx," and collectively with ANAHOP and Xxxxx, the "ANAHOP
Parties"). The Company, ANAHOP, Xxxxx, and Xxxx may each be referred to herein
as a "Party" and collectively as the "Parties."
RECITALS
A. In May 2006, the Company and ANAHOP entered into a transaction
(the "May Transaction") whereby the Company sold to ANAHOP Fourteen Million, Two
Hundred Eighty-five Thousand, Seven Hundred Fifteen (14,285,715) shares of
Common Stock. In connection with the May Transaction, the Company also issued
warrants (the "May Warrants") as follows: a warrant to purchase up to 10,000,000
shares, with an exercise price of $0.15 per share, exercisable upon the date of
issuance, to Xxxxx; a warrant to purchase up to 5,000,000 shares, with an
exercise price of $0.15 per share, exercisable upon the date of issuance, to
Xxxx; a warrant to purchase up to 5,000,000 shares, with an exercise price of
$0.25 per share, exercisable upon the date of issuance, to Xxxx; and a warrant
to purchase up to 10,000,000 shares, with an exercise price of $0.50 per share,
exercisable upon the date of issuance, to Xxxxx.
B. In June 2006, the Company and ANAHOP entered into a transaction
(the "June Transaction") whereby the Company sold to ANAHOP Twenty-Eight
Million, Five Hundred Seventy-One Thousand, Four Hundred Twenty-Eight
(28,571,428) shares of Common Stock, issuable in two tranches. Pursuant to the
first tranche, ANAHOP agreed to pay $500,000, and in return, the Company agreed
to issue 7,142,857 shares (the "First Tranche Shares"). Pursuant to the second
tranche, ANAHOP agreed to pay an additional $1,500,000, and in return, the
Company agreed to issue the remaining 21,428,571 shares (the "Second Tranche
Shares"). In connection with the June Transaction, the Company also agreed to
issue warrants (the "June Warrants"), pursuant to certain conditions stated in
the June Transaction documents, as follows: a warrant to purchase up to
20,000,000 shares, with an exercise price of $0.15 per share, exercisable upon
the date of issuance, to Xxxxx; a warrant to purchase up to 10,000,000 shares,
with an exercise price of $0.15 per share, exercisable upon the date of
issuance, to Xxxx; a warrant to purchase up to 10,000,000 shares, with an
exercise price of $0.25 per share, exercisable upon the date of issuance, to
Xxxx; and a warrant to purchase up to 23,000,000 shares, with an exercise price
of $0.50 per share, exercisable upon the date of issuance, to Xxxxx.
C. Pursuant to the June Transaction, the Company is not obligated to
issue the Second Tranche Shares or issue the June Warrants until the full
payment for the Second Tranche Shares has been made.
D. The Company and the ANAHOP Parties desire to enter into an
agreement whereby the ANAHOP Parties agree that they will not exercise any of
the May Warrants or the June Warrants or pay for the Second Tranche Shares until
the Company has taken all steps necessary to increase its authorized capital.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises and undertakings set forth herein, and intending to be legally bound
hereby, the Parties agree as follows:
1. Lock Down/ No Exercise or Payment.
A. May Warrants. Pursuant to this Agreement, Xxxxx and Xxxx each
specifically agree that he will not exercise any of the May
Warrants until the Company has increased its authorized capital
stock.
B. June Warrants. Pursuant to this Agreement, Xxxxx and Xxxx each
specifically agree that he will not exercise any of the June
Warrants until the Company has increased its authorized capital
stock.
C. Second Tranche Shares. Pursuant to this Agreement, ANAHOP agrees
that it will not make the $1,500,000 payment for the Second
Tranche Shares until the Company has increased its authorized
capital stock.
2. Company Obligations. In connection with this Agreement, the Company
hereby agrees:
A. Not later than twenty (20) days following the date on which the
Company's Registration Statement on Form SB-2 (SEC File No.
333-128549), registering the resale of shares by Highgate House
Funds, Ltd. (the "Registration Statement") is declared effective
by the U.S. Securities and Exchange Commission (the "SEC"), the
Company will file with the SEC a proxy statement, information
statement, or such other form as is appropriate, to effectuate an
amendment to the Company's articles of incorporation to increase
the Company's authorized capital stock. The Company also agrees to
use its best efforts to respond to any comments issued by the SEC
and to effectuate the amendment of the Company's articles of
incorporation to increase its authorized capital from 750,000,000
shares to 1,500,000,000 shares or such other number as the Company
deems appropriate.
B. The Company agrees to notify the ANAHOP Parties upon the filing of
the proxy statement, information statement, or such other form as
is appropriate, with the SEC, and upon the effective date of the
amendment of the Company's articles of incorporation.
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3. Termination. The Parties hereby acknowledge and agree that this
Agreement shall terminate upon the effectiveness of the increase in the
Company's authorized capital as described herein. The Parties further agree that
upon the termination of this Agreement, the ANAHOP Parties shall have no
obligation to exercise the Warrants or to make the payment for the Second
Tranche Shares except as set forth in the documents relating to the May
Transaction and the June Transaction, as appropriate.
DATED as of July 20, 2006.
CIRTRAN CORPORATION ANAHOP, INC.
By: __________________________ By: _____________________________
Name: Xxxxx Xxxxxxxx Name: Xxxxxx Xxxxx
Title: President & CEO Title: President
XXXXXX XXXXX
_________________________________
XXXX XXXX
_________________________________
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