TO:  All CDL Enterprises Dealers
FROM:  Terry Lovett, President/CEO
DATE:  June 4, 2004

CDL Enterprises (“CDL”), has developed numerous products that it distributes under its T-BAGS®trademark and associated logo (collectively the “Marks”). CDL also holds copyrights to the material in all of its catalogs and advertisements. In order to monitor the use of its Trademarks and copyrights, CDL has adopted the following policies for its valued dealer network.

CDL does not in any way restrict or limit the price at which a Dealer (including any retailer or reseller) sells any of the T-BAGS® branded products that it distributes, but CDL does enforce an Advertising Policy, which is intended to preserve the goodwill and market reputation of CDL and its Marks.

It is CDL’s policy that no Dealer may use CDL’s Marks including, without limitation, T-BAGS®and/or any similar marks or derivatives thereof, or any of CDL’s materials that are subject to copyright protection (“Copyrighted Materials”),in connection with any advertising, publication, catalog, web page, or other printed, audio, video, or electronic material unless the Dealer complies with the following requirement:

"No Trademark may be used in any advertisement, catalog, or publication, whether printed, audio, video, or electronic, if the product price is also used in that advertisement, catalog, or publication, unless the price used is the current manufacturer’s suggested retail price as published by CDL.”

Advertising practices that have the effect of reducing the advertised price below the level in the above Advertising Policy, such as, for example, combining a product carrying a CDL Mark or trade name with a “free” product or in a “package” with other products or with a discount coupon, also violate the Advertising Policy.

This policy does apply to non-current products. If CDL discounts its dealer price on non-current inventory it will also reduce the suggested retail price on those products. The Dealer can advertise using that reduced suggested retail price, provided that the Dealer clearly indicates in its advertisements that the product advertised is non-current product.

To be sure that advertisements or publications comply with the CDL Advertising Policy, a Dealer can submit the advertisement or other publication to CDL for approval prior to printing and distribution. Please allow additional time when using CDL Marks in advertisements and publications. These requests for approval can be submitted by fax directly to CDL at its office in Costa Mesa, California, attention President, and CDL will respond to these requests within three (3) business days.

If a Dealer’s advertising material contains prices other than suggested retail prices and the advertising material was not pre-approved by CDL, the Advertising Policy will be enforced in the following manner:

FIRST OFFENSE:  Dealer will receive a documented notice of violation (“Notice”) and will be given thirty (30) calendar days to remove the offending print advertisements from publication and distribution and three (3) business days to remove any offending electronic advertisements from web pages or Internet sales sites.

SECOND OFFENSE:  Dealer will receive a Notice and will be placed on a non-ship basis for a period of thirty (30) days from the date of the Notice with regard to all T-BAGS®products.

THIRD OFFENSE:  Dealer will receive a Notice and will be placed on a non-ship basis indefinitely with regard to all T-BAGS®products.

CDL grants to its Dealers a non-exclusive, non-transferable worldwide license, for as long as the Dealer is selling products carrying a CDL Mark, to use CDL’s Marks and Copyrighted Materials, provided the Dealer complies with this Advertising Policy. CDL further grants to its Dealers a non-exclusive, non-transferable license, for as long as the Dealer is selling products carrying a CDL Mark, to reproduce, distribute, and display Copyrighted Materials in order to promote and sell CDL’s products worldwide. Dealer recognizes that CDL has an exclusive right to all Marks used by CDL to identify its products, and Dealer agrees that Dealer will not claim any right, title or interest therein. Nothing herein shall be construed to give Dealer any right, title or interest in CDL’s Marks and trade names or Copyrighted Materials. For purposes of this Advertising Policy, “advertisement” is defined as any advisement, announcement, information, publication or notice given or made by a Dealer in connection with the solicitation of business or sales of the products covered by the CDL Advertising Policy in whatever medium is now known or hereafter developed including print, radio, telegram, television, handbill, sign (except signs in the Dealer’s retail store), catalog, letter (including e-mail), electronic media, telecommunication, internet or online auction. For purposes of Internet sales the entire web site, including the “shopping cart” or similar web site location, will be considered part of the “advertisement” if it can be accessed by links contained on or within the web site.

Any violations of this Policy and/or any apparent unauthorized use of CDL’s Marks or Copyrighted Materials should be reported to CDL.

CDL enjoys its relationship with all of its Dealers and wants to work with each Dealer to make the Dealer’s business as successful as possible. CDL hopes that each Dealer will respect CDL’s need to protect its Marks and Copyrighted Materials and will assist CDL by complying with this necessary Advertising Policy.