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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 the Warrants in excess of the Company's authorized but unissued shares of the
Company's common stock (the "Authorized But Unissued Share Amount") 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 any amount of the principal or
interest on the Cornell Debenture until the Company has
increased its authorized capital stock.
B. Warrants. 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 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, 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. 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/ Iehab Hawatmeh____ 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:____Mark A. Angelo____________
Title: _____ Portfolio Manager _________
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