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AMENDED LOCK DOWN AGREEMENT
THIS AMENDED LOCK DOWN AGREEMENT (the "Agreement") is entered into as
of the 30th day of October, 2006, by and between CirTran Corporation (the
"Company") and Cornell Capital Partners, LP ("Cornell"). The Company and Cornell
may each be referred to herein as a "Party" and collectively as the "Parties."
RECITALS
A. In December 2005, the Company and Cornell entered into a
transaction (the "Transaction") whereby the Company issued to Cornell a
convertible debenture (the "Cornell Debenture") in the principal amount of
$1,500,000.
B. In connection with the Transaction, the Company also issued to
Cornell warrants to purchase up to 10,000,000 shares of the Company's common
stock (the "Warrants"). The Warrants have an exercise price of $0.09 per share.
C. The Company and Cornell desire to enter into an agreement
whereby Cornell agrees that it will not convert or exercise any of the Cornell
Debenture or Warrants in excess of the Company's authorized but unissued shares
of the Company's common stock (the "Authorized But Unissued Share Amount") of
the Cornell Debenture 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 Conversion or Exercise.
X. Xxxxxxx Debenture. Pursuant to this Agreement, Cornell hereby
agrees that it will not convert in excess of the Authorized
But Unissued Share Amount on the Cornell Debenture until the
Company has increased its authorized capital stock.
B. Warrants. Pursuant to this Agreement, Cornell hereby agrees
that it will not exercise in excess of the Authorized But
Unissued Share Amount of the Warrants 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 December 31, 2006 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 Cornell 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.
C. The Parties hereby acknowledge and agree that in the event
that the Company has not effectuated the increase in its
authorized capital to 1,500,000,000 shares of common stock by
December 31, 2006 (the "Deadline"), such failure shall
constitute an "Event of Default" under the Cornell Debenture
and related documents and agreements.
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. Notwithstanding the foregoing,
in the event the Company has not effectuated the increase in authorized shares
of common stock by the Deadline, this Agreement shall terminate and all parties
shall have no obligations under this Agreement. The Parties further agree that
upon the termination of this Agreement, Cornell shall have no obligation to
exercise the Warrants or convert any amount of the Cornell Debenture, but shall
have any and all rights as delineated in the transaction documents relating to
the Warrants and the Cornell Debenture, as appropriate.
DATED as of October 30, 2006.
CIRTRAN CORPORATION CORNELL CAPITAL PARTNERS LP
By: /s/ Xxxxx Xxxxxxxx By: Yorkville Advisors, LLC
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Name: Xxxxx Xxxxxxxx Its: General Partner
Title: President & CEO
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Portfolio Manager
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