MINNESOTA COMMERCE - Unhappy Franchisee

1. Mateo, and any affiliates, licensees or franchisees of Mateo, if authorized by Mateo, will have
the absolute right to sell the Products, direcdy or indirectly, or through non-mobile distributors, including
commercial sales representatives, (A) to industrial customers, industrial accounts, and owners of vehicle repair
businesses (including businesses, entities, governmental agencies, and others, including those which may be
listed on the Distributor's List of Calls, but excluding the Potential Customers) who (i) have central purchasing
functions, or (ii) may purchase and/or acquire special order products designed for multiple-party use, which are
not included as part of Mateo's regular or special purchase inventory list, or (iii) may purchase Products
through a bidding process, such as railroads, airlines, manufacturers, govemmental agencies and schools, (B)
to industrial and multiple-line and multiple brand wholesale distributors who may resell such Products to any
potential purchaser or customer, including your customers, and (C) to vocational training schools and
programs, and to the students and employees of those schools and programs.
2. Mateo, and any affiliates, licensees or franchisees of Mateo, if authorized by Mateo, will have
the absolute right to sell the Products through (A) catalogs, (B) any curtent or future means of electronic
commerce, including the Intemet and Mateo's Website, and (C) at special and/or temporary venues (including
race tracks, and other motor sports events).
3. Mateo, and affiliates of Mateo, may manufacture and/or sell products that are the same as or
similar to the Products, and Mateo's affiliates may sell such products directly, or indirectly through
wholesalers, suppliers, distributors or others, to Potential Customers who are the same as or similar to your
Potential Customers and actual customers. Mateo has no control over the sales or distribution methods or
operations of its affiliates, and Mateo has no liability or obligations to you due to any sales or distribution
activities of Mateo's affiliates. However, curtently, neither Mateo nor its affiHates have any plans to operate a
franchise system under different trademarks that offer the same or similar products.
Curtently, Mateo sells the Products through its commercial sales department and commercial accounts
program which is described in Item I. Mateo also sells Products to the vocation school market (see Item 1).
Except as set forth in Article 1.3, Article 1.4, and Article 3.4 of the Distributorship Agreement, there are no
contractual limitations on the ability of Mateo or any affiliate to establish other franchises or company-owned
oudets or other channels of distribution selling or leasing similar products or services under the Mateo®
trademark or a different trademark. Mateo will have no liability or obligation to you if any customer or
Potential Customer of yours purchases or receives Products through any method or channel of distribution
described above, or otherwise reserved to Mateo. Further, Mateo has in the past granted (A) distributorships
that do not have any territorial restrictions or limitations on the distributor, and (B) distributorships that have
territories in which the distributor is not limited to selling Products to a specified number of customers. Mateo
will use its best efforts to deter such distributors, and other distributors, from selling Products to customers on
the Potential Customer List, but Mateo cannot and does not provide you with any guaranty or assurance that
such distributors will not offer and sell Products to your customers.
The continuation of your rights to sell Products to actual or Potential Customers under the Distributorship
Agreement is not dependent upon achievement of a certain sales volume, market penetration, or other
contingency. However, Mateo may terminate the Distributorship Agreement if you fail to:
(A)
(i) maintain aHa_]llinimum inventory of tfee-Products equal to or in excess of the New Distributor
Starter Inventory; (ii) purchase Products, on a weekly basis, purchase Products from Mateo in an
amount not less than {aX80% of the !!National Distributor Purchase Average" or fb) 80%__o.Ly.QLur
District Distributor Purchase Average, whichever is less, based on your 12-month rolHng average^ or,
if you have been in businessoperating the Distributorship .for less than 12 months, based on your yearto-date
average; and (iii) maintain a minimum of a 60% ratio of a calculation of your year-to-date
purchase average divided by your year-to-date sales average;
.33.
Mateo 2Ili2.FDD/PK ^55?545^44342QiLS 03/09/4412