EXHIBIT 10.75
MONRO MUFFLER/BRAKE, INC.
Kendall Motor Oil Purchase Agreement
Effective February 18, 2002
Beginning Monday, February 18, 2002 and extending through February 17, 2007,
following are the terms of the agreement between Monro Muffler/Brake, Inc. and
Phillips Petroleum Company (Kendall Motor Oil).
A. Purchasing Agreement
Kendall Motor Oil (`Kendall") will be the exclusive supplier of passenger
car and heavy duty lubricants as well as ancillary lubricant products
(Transmission Fluids, Greases, Gear Lubricants, et al.) to Monro
Muffler/Brake, Inc. ("Monro") during the contract term, February 18, 2002
through February 17, 2007.
B. Pricing
1. Effective the date of this agreement, pricing is reflected per the
attached schedule (See Schedule A).
2. Pricing is firm through December 31, 2002. After this date, prices are
subject to change based on marketplace movement of branded lubricant
products.
3. Price adjustments will be preceded by sixty (60) days written notice.
C. Business Development
*
D. Advertising Allowance
1. An Advertising Allowance of $.25 per gallon will be paid quarterly based
on documented and reported purchase volumes.
2. To qualify for this allowance, Monro must agree to participate in two
Kendall national consumer promotions annually and must be featured
through documented print or electronic media advertising using the
approved Kendall logo, product identification and logo.
E. Lubricant Dispensing Equipment
1. Kendall will loan to Monro lubricant dispensing equipment for each
service location at the rate of $1 of equipment for each projected
gallon of product purchased annually (based on Year 1 anticipated
purchases), by location, in accordance with the guidelines of the
Kendall Equipment Lease Program (tanks, pumps, reels and meters).
2. Kendall will, during the term of this agreement and at its cost and
expense, provide ordinary and necessary repair and maintenance for the
equipment and will maintain it in good working condition through the
approved equipment repair facility(s) for the subject equipment repair
and maintenance. When necessary, Kendall will replace worn equipment
with new equipment.
3. Kendall will, during the term of this agreement at its cost and expense,
provide supplemental equipment to Monro based on a pre-established and
agreed upon budget and guidelines (one unit per location unless
otherwise mutually approved by Monro and Kendall), as follows:
a. Used Oil Disposal Tank
b. Self Evacuation Oil Drain
4. Equipment Depreciation
a. The original cost of the lubricant dispensing equipment is
depreciated, on a straight- line basis, over five (5) years. At the
end of the five-year period, the equipment value will become and
remain $1.
F. Marketing Support
1. Grand Opening Allowance: During the term of this agreement, for each new
store opening by Monro, Kendall will pay Monro $800 per location. To
qualify for this allowance, Kendall must be included in the grand
opening advertising (in print using the approved Kendall logo and tag
line).
2. *
3. *
4. Kendall will supply Monro with the following promotional materials at no
cost to Monro:
a. Kendall/Monro-imprinted Floor Mats
b. Kendall/Monro-imprinted Static Cling Window Stickers
c. Kendall Ecology Drums
d. Kendall Curb Signs
e. Other marketing and point of sale material which support mutual
branding strategies
Quantities of these items are determined by the annual volume purchased
by Monro during each calendar year.
5. MotorSports
Refer to Schedule B for details.
H. Annual Volume Incentive
1. *
2. *
I. Separation
If this agreement is terminated for any reason other than breach by Kendall,
the following conditions will apply:
1. Monro will pay a termination penalty of $12,500 for every full month
remaining until February 17, 2007. Such amount will be payable within
thirty (30) days of the cancellation of this agreement.
2. Reimbursement for the lubricant dispensing equipment will be determined
by:
a. The remaining value of the existing equipment and installation will
be determined based on a five-year, straight line depreciation
schedule from the original date of installation and would become
payable within thirty (30) days of cancellation.
b. All new equipment and installation during the term of this agreement
will be depreciated on a five-year, straight line depreciation
schedule from the date of installation, and remaining value of said
equipment will be payable within thirty (30) days of cancellation.
3. Sixty (60) days notification of the cancellation is required.
J. Change in Ownership
In the event that Monro is acquired, either directly or indirectly, through
the sale of assets, merger, or otherwise, Monro or its successor(s) may
terminate this Agreement upon 60 days written notice. In the event such
termination shall take place, Monro agrees to pay Kendall, at the end of the
sixty (60) days, $12,500 per complete month remaining until February 17,
2007. Monro also agrees to pay the unamortized value of the lubricant
dispensing equipment as outlined in Sections I.2.a and I.2.b.
In the event that a change of control of Kendall shall result in a party,
person or corporate entity controlling a majority share of Kendall and such
party, person or corporate entity shall be a citizen of, or based in, a
country which is, or becomes, listed on the United States of America's
Department of Defense Trade Control's Embargo Reference Chart, Monro shall
have the immediate right to terminate this agreement without any prior
notification or penalty.
PHILLIPS PETROLEUM COMPANY MONRO MUFFLER/BRAKE, INC.
(Kendall Motor Oil, Lubricants
Division)
By: /s/ Susan Tate By: /s/ Robert W. August
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Title: Manager, Sales Title: Sr. Vice President - Store Support
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Date: April 9, 2002 Date: April 5, 2002
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* This information has been left out for confidentiality reasons.