<PAGE>
EXHIBIT 10.86
PORTIONS
OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL
TREATMENT. SUCH PORTIONS ARE DESIGNATED
"***".
THIS
SUPPLY AGREEMENT ("Agreement"), is made and entered into as of
the
2nd day of November, 2004, between Wagner
Brake, a division of Federal-Mogul
Corporation, with a mailing address of
26555 Northwestern Hwy. Southfield, MI
48034, Attention: Vice President -
Aftermarket Sales, America ("SUPPLIER") and
Monro Service Corporation, a Delaware
corporation, with a mailing address of 200
Holleder Parkway, Rochester, NY 14615
("CUSTOMER").
W I T N E S S E T H:
IN CONSIDERATION OF THE MUTUAL PROMISES SET FORTH IN THIS
AGREEMENT,
and other good, valuable and sufficient
consideration, the receipt and adequacy
of which are hereby acknowledged, SUPPLIER
hereby agrees to sell and deliver,
and CUSTOMER hereby agrees to purchase,
receive and pay for, the SUPPLIER'S
products described below at CUSTOMER'S
premises identified on the attached
Schedule A, and any future locations the
CUSTOMER may acquire, open, manage or
operate on the following terms and
conditions:
1. TERM. This Agreement
shall commence February 1, 2005 (the "Effective
Date") and
be in effect until March 31, 2010 (the "Agreement Period").
CUSTOMER
expressly agrees that this Agreement is independent of any
other
agreement
between CUSTOMER and SUPPLIER. This Agreement shall remain in
effect
unless terminated pursuant to the provisions hereof regardless
of
the
termination or expiration of any other agreement between CUSTOMER
and
SUPPLIER.
2. INTERIM PERIOD. The
CUSTOMER may begin purchasing products from the
SUPPLIER
during the period between the date this Agreement is signed by
both
parties and the Effective Date (the "Interim Period") in order
to
facilitate
CUSTOMER'S transition to the PRODUCTS (as defined in Section
3). Any
purchases during the Interim Period shall be subject to the
following
conditions and/or exceptions:
A.
Interim
Period Pricing (as defined in Schedule B) shall apply;
B.
There
shall be no minimum purchase requirements;
C.
The Fill
Rate Guarantee (as defined in Section 8) shall not apply;
D.
*** (as
defined in Section 21) shall not be assigned to SUPPLIER by
CUSTOMER;
E.
The
Marketing Allowance cited in Section 13.A shall apply; and
F.
The
provisions outlined in Section 17 shall apply.
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<PAGE>
3. PRODUCTS. SUPPLIER
shall sell and deliver, and CUSTOMER shall purchase,
pay and
provide safe access for the delivery of the products offered by
SUPPLIER
for purchase by CUSTOMER as shown (with applicable pricing) on
Schedule B
("Products").
During the Agreement Period, CUSTOMER shall purchase a minimum
amount of
the Products (net of any returns made by CUSTOMER ***, the
"Purchase
Requirement") during the applicable period ("Period").
<TABLE>
<CAPTION>
Period
Purchase Requirement
------
--------------------
<S>
<C>
February 1, 2005 - March 31, 2006
***
April 1, 2006 - March 31, 2007
***
April 1, 2007 - March 31, 2008
***
April 1, 2008 - March 31, 2009
***
April 1, 2009 - March 31, 2010
***
</TABLE>
It is understood that CUSTOMER will actively promote and
purchase
Wagner
ThermoQuiet friction products as its primary premium friction
line.
It is
anticipated that during the term of this Agreement CUSTOMER
will
purchase
*** in Products from SUPPLIER. If CUSTOMER'S aggregate
purchases
of Product
do not reach the Purchase Requirement during any Period,
CUSTOMER
shall be permitted to carry forward, in the manner described in
the
following sentence, the difference between the Purchase
Requirement
and the
aggregate amount of the all purchases for such Period (the
"Shortfall
Amount"). The CUSTOMER shall purchase the Shortfall Amount, if
any, from
all Periods (together, the "Aggregate Shortfall Amount") under
the
provisions of this Agreement, within six (6) months following
the
expiration
of the Agreement Period. These Purchase Requirements include
all brake
categories except brake calipers. If CUSTOMER'S purchases for
any Period
should exceed the applicable Purchase Requirement for such
Period,
the excess amount will be credited against the Aggregate
Shortfall
Amount.
4. PRICE/PAYMENT. Prices
for the products are set forth on Schedule B and are
subject to
change upon written notice to CUSTOMER; such notice shall be
delivered
to CUSTOMER at least sixty (60) days in advance. SUPPLIER will
not
increase any prices for a period of ***. Any future price
adjustments
shall
generally allow CUSTOMER to remain competitive with comparable
products
sold by CUSTOMER'S competitors. ***. Except for income taxes
incurred
by SUPPLIER, CUSTOMER is responsible for payment of all
applicable
taxes, fees and other government-imposed charges, whether or
not
included in such prices. If compliance with law prevents SUPPLIER
from
charging
or CUSTOMER from paying the price provided in this Agreement,
any
resulting
failure to perform shall be excused pursuant to Section 7
hereof.
Each delivery hereunder shall be considered a separate sale.
5. PRODUCT
IDENTIFICATION. SUPPLIER shall have the right at any time to
change or
discontinue use of any trademark, service mark, trade dress,
trade name
or other indication of source of origin ("Marks") under which
the
Products are sold. If SUPPLIER discontinues the use of any Mark
which
the
CUSTOMER, in its sole discretion, deems as being critical to
its
on-going
business, the CUSTOMER shall have the right to terminate this
agreement
under the conditions outlined below. CUSTOMER shall use its
best
efforts to
maintain the quality, good name and reputation of SUPPLIER and
the
Products. CUSTOMER shall not alter in composition, co-mingle
with
products
from other sources, or otherwise adulterate the Products.
CUSTOMER
shall not bring or cause to be brought any proceedings, either
administrative or judicial in nature, contesting SUPPLIER'S
ownership of
rights to,
or registrations of the Marks.
19
<PAGE>
6. PROTECTION OF LOGOS
AND TRADEMARKS. CUSTOMER shall permit SUPPLIER a
limited
right to use CUSTOMER'S trade names, trademarks, logos and
service
marks
("Customer's Marks") for promotional purposes pursuant to the
terms
set forth
in this Section. CUSTOMER must give prior approval, in each
instance and in its sole
discretion, of SUPPLIER'S intended use of
Customer's
Marks including, but not limited to: usage in pamphlets,
brochures,
marketing materials, trade magazines or journals, press
releases,
and electronic media. SUPPLIER shall not alter in composition,
co-mingle
with any marks from its other customers or otherwise adulterate
Customer's
Marks. SUPPLIER shall not bring, or cause to be brought, any
proceedings, either administrative or judicial in nature,
contesting
CUSTOMER'S
ownership of rights to, or registrations of the Customer's
Marks.
CUSTOMER shall indemnify and hold SUPPLIER harmless from any
losses
or
liabilities or damages in connection with any claim brought by a
third
party against SUPPLIER
alleging that SUPPLIER'S possession or use of the
CUSTOMER'S
Marks pursuant to, and in accordance with, the terms of this
Agreement
infringes the rights of such third party.
7. FORCE MAJEURE. The
parties to this Agreement shall not be responsible for
any delay
or failure to perform under this Agreement (other than to make
payments
when due hereunder) if delayed or prevented from performing by
act of
God; transportation difficulty; strike or other industrial
disturbance; any law, regulation, ruling, order or action of
any
governmental authority; fire; or any other cause or causes beyond
such
party's
reasonable control whether similar or dissimilar to those
stated
above.
8. PRODUCT AVAILABILITY. SUPPLIER
shall endeavor to provide CUSTOMER with
sufficient
product to meet its needs. Notwithstanding Section 7, in the
event the
SUPPLIER is unwilling and/or unable to supply CUSTOMER with any
Products
CUSTOMER shall order from SUPPLIER, the CUSTOMER shall seek to
purchase
products from alternate sources. In such instances, as they may
occur,
CUSTOMER'S Purchase Requirement for the applicable Period shall
be
reduced by
the aggregate value of such product purchased by CUSTOMER from
alternate
sources.
SUPPLIER
shall on each individual purchase order, maintain a shipping
ratio in
excess of 85% of the value of CUSTOMER'S order (the "Fill Rate
Guarantee"). If SUPPLIER'S shipping ratio falls below 85% ***.
CUSTOMER
will be
responsible for tracking shipping performance by purchase order
and
invoice, maintaining back-up documentation, ***.
***.
9. COMPLIANCE WITH
LAWS/TAXES. CUSTOMER shall, at its own expense, (i) comply
with all
applicable laws, regulations, rulings and orders, including
without
limitation those relating to taxation, workers' compensation,
and
environmental protection; (ii) obtain all necessary licenses and
permits
for the
purchase and sale of the Products; and (iii) pay directly, or
reimburse
SUPPLIER on demand if paid by SUPPLIER (except as otherwise
provided),
all taxes, inspection fees, import fees, and other governmental
charges
imposed by this Agreement, the Products, or on the sale,
purchase,
handling,
storage, advertising, distribution, resale or use of the
Products.
10. SUPPLIER'S RIGHT TO INSPECT.
SUPPLIER, or its authorized agents, shall
have the
right, but not the obligation, to inspect CUSTOMER'S premises,
bearing
the Marks, or being represented to contain the Products, at any
time
during business hours.
20
<PAGE>
11. TERMINATION; REMEDIES. This
Agreement may be terminated under the terms of
this
Section.
A. An
"Event of Default" shall mean any of the following events:
(i) If CUSTOMER
defaults in the performance of or breaches
any provision of Section 3 of this Agreement;
(ii) The provisions of
Section 16 notwithstanding, any
payment due hereunder is unpaid past the 10th calendar
day of the second month following shipment; or
(iii) Either party materially defaults in the performance of
or material breaches any other provision of this
Agreement; or
(iv) (a) After the
date of this Agreement, a voluntary
petition under Chapter 7 or 11 of the Bankruptcy Code is
filed by or against either party, or a final order for
relief under Chapter 7 of the Bankruptcy Code is
entered, or any Chapter 11 proceedings are converted to
proceedings under Chapter 7 of the Bankruptcy Code
pursuant to a final order for relief;
(b) Either party makes an assignment for the benefit of
creditors or a similar transfer of or action involving a
material portion of its assets for purposes of
liquidating such assets;
(c) Any secured
or lien creditor commences a foreclosure
action of its liens, security interest(s) and/or
mortgage(s) against, and obtains the right to possession
or control over, a material portion of such party's
assets; or
(v) SUPPLIER
discontinues the use of any Supplier Mark
according to the terms of section 5 of this Agreement;
or
(vi) The Aggregate
Shortfall Amount outstanding at any one
time during the Agreement Period exceeds ***.
B.
Upon the
occurrence of any Event of Default, the party n
