CirTran Corporation (CIRX)

[nupapa]

In May 2007, we entered into an exclusive, three-year manufacturing, marketing,
and distribution agreement (the "PlayBev Agreement") with PlayBev, a related
party. In August 2007, we extended the agreement's term to ten years. PlayBev is
the licensee under a product licensing agreement with Playboy. The PlayBev
Agreement allows us to arrange for the manufacture, marketing and distribution
of Playboy-licensed energy drinks, flavored water beverages, and related
merchandise through various distribution channels. Under the terms of this
agreement, we are to provide the initial development and promotional services to
PlayBev and are required to pay a royalty to PlayBev on our product sales and
manufacturing costs once licensed product distribution commences.

PlayBev has no operations, so under the terms of the PlayBev Agreement, the
Company was appointed the master manufacturer and distributor of the beverages
and other products that PlayBev licensed from Playboy. As a result, we have
assumed all the risk of collecting amounts owed from customers, and contracting
with vendors for manufacturing and marketing activities. The royalty payable to
PlayBev is an amount equal to the Company's gross profits from collected
beverage sales, less 20 percent of the Company's related cost of goods sold, and
6 percent of the Company's collected gross sales.

The Company also agreed to provide services to PlayBev for initial development,
marketing, and promotion of the new beverages. These services are billed to
PlayBev and recorded as an account receivable from PlayBev. The Company agreed
to carry up to a maximum of $1,000,000 as a receivable due from PlayBev in
connection with these billed services; PlayBev will repay the receivable out of
the royalties payable to PlayBev by the Company under the PlayBev Agreement. On
March 19, 2008, the Company and PlayBev agreed to increase the maximum amount of
the receivable from $1,000,000 to $3,000,000, and to begin charging interest at
a rate of 7 percent per annum on the unpaid balance.

http://www.sec.gov/Archives/edgar/data/813716/000109690608000706/cirtran10k.txt