THIS MASTER
SALES AGREEMENT is made and entered into this 9th day of December,
2005, by and between Luby’s Inc., a Delaware corporation
(“Luby’s”), on the one hand, and Pappas
Restaurants, Inc. (a Texas corporation) and Pappas Partners, L.P.
(a Texas limited partnership), on the other hand (such Pappas
entities being collectively referred to herein as the “Pappas
Entities”).
W I T N E S S E T
H:
WHEREAS,
Luby’s is in the business of owning and operating food
cafeterias and other food purveying businesses;
WHEREAS, the
Pappas Entities are in the business, among other things, of
designing and fabricating restaurant equipment and furnishings and
have developed skills and expertise in such regards over many years
of operation;
WHEREAS, the
Pappas Entities desire from time to time to sell certain of their
products on a non-exclusive basis to Luby’s and Luby’s
desires from time to time to purchase certain products from the
Pappas Entities;
WHEREAS,
Luby’s and the Pappas Entities desire to set up a mechanism
and master agreement among them for purposes of facilitating the
placement and fulfillment of orders for products;
NOW, THEREFORE,
in consideration of the premises, the mutual agreements contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, the
parties hereby agree as follows:
ARTICLE
I
DEFINITIONS
1.1.
Definitions
. For the purposes of this
Agreement, in addition to the terms defined
elsewhere
herein, the following terms shall have the following
meanings:
(a)
“Affiliate” means any
Person that controls, is controlled by or is under common control
with any other Person;
(b)
“Agreement” means this
Master Sales Agreement, as the same may subsequently be amended,
modified or supplemented in accordance with its terms;
(c)
“Encumbrance” means any
mortgage, pledge, lien, claim, encumbrance, charge or other
security interest, option, defect or other right of any third
Person of any nature whatsoever, other than inchoate
mechanic’s, materialmen’s and similar liens arising in
the ordinary course of business;
(d)
“Party” means either
Luby’s, on the one hand, or the Pappas Entities, on the
other, and “Parties” means both Luby’s and the
Pappas Entities;
(e)
“Person” means a
natural person or any entity of any kind, including (without
limitation) joint stock companies, corporations, partnerships,
limited liability companies, governmental entities and any other
entity organized or formed under the law of any
jurisdiction;
(f)
“Product” means any
product manufactured or sold by the Pappas Entities as may be
agreed upon by the Parties in writing from time to time;
(g)
“Purchaser” means
Luby’s, and includes all subsidiaries and Affiliates thereof;
and
(h)
“Seller” means the
Pappas Entities and includes all subsidiaries and Affiliates
thereof.
1.2
Other Definitional
Provisions .
(a)
The words “hereof”,
“herein” and “hereunder” and words of
similar import when used in this Agreement shall, unless a specific
provision is expressly referenced, refer to this Agreement as a
whole and not to any particular provision of this document, and
Article references contained in this Agreement are references to
the Articles in this Agreement, unless otherwise
specified.
(b)
All words used herein in the
singular shall extend to and include the plural, and all words used
herein in the plural shall extend to and include the
singular.
(c)
All words used in any gender shall
extend to and include all genders.
ARTICLE
II
SALE AND
PURCHASE
2.1
Sale and Purchase
Obligations .
(a)
Seller agrees to sell to Purchaser,
only upon Purchaser’s order (after compliance with the terms
of Section 2.3 hereof), and Purchaser thereafter agrees to purchase
from Seller, any Product of Seller offered to Purchaser at any time
during the term of this Agreement and in accordance with the terms
and provisions hereof.
(b)
If Seller is unable, for any reason
other than a volitional declination to do so, to supply Purchaser
with Purchaser’s requirements for any Product within the time
period specified for delivery of such Product in an order from
Purchaser, then the obligations to purchase and sell hereunder
shall cease in respect of such order and shall be of no further
effect or force.
(c)
No provision of this Agreement
shall be construed to impair Seller’s right to supply any
Product to any person other than Purchaser. No provision of this
Agreements shall be construed to impair Purchaser’s right to
purchase any Product from any person other than Seller.
2.2
Orders and
Deliveries . All
orders, processing and deliveries of any Product shall be made in
accordance with customary and routine handling of orders,
processing and deliveries for fabricated restaurant equipment and
furnishings to third parties in respect of the particular Product
or type of Product, unless otherwise agreed in writing by both
Parties.
2.3
Pricing and
Payment .
(a)
The Product(s), and the purchase
price payable by Purchaser for each unit of the Product, shall be
agreed upon between the Parties as set forth in the proposed order
with respect to the Products identified therein. The proposed order
shall be presented to a board committee of Purchaser for review and
approval which does not include any person affiliated with the
Pappas Entities or shall otherwise be handled in accordance with a
procedure devised by such a committee. Only after review and
approval by such committee, or in accordance with the procedure
devised by such committee, may any order be placed by Purchaser or
honored by Seller.
(b)
As reasonably requested from time
to time, Seller shall provide Purchaser reasonable information to
allow Purchaser to confirm Seller’s approximate costs of
manufacturing or purchasing, as the case may be, any Product
offered to Purchaser by Seller.
(c)
Purchaser shall be responsible for
the payment of all taxes related to the sale and purchase of the
Products.
(d)
Seller shall send Purchaser an
invoice within 30 days after the delivery of Products pursuant to
any order setting forth the types and quantities of Products
shipped by Seller to Purchaser during the previous month. Within 30
days after the receipt of such invoice, Purchaser shall remit
payment for such Products to Seller.
2.4
Inspection and
Rejection .
(a)
Purchaser reserves the right to
reject or revoke acceptance of any shipment of Product as a result
of any defect or nonconformity thereof. If any Product is rejected
or its acceptance is revoked, Purchaser shall notify Seller of such
rejection or revocation of acceptance within 30 days of receipt of
such Product, specifying with particularity the grounds for its
rejection or revocation of acceptance.
(b)
Seller shall immediately replace
any such Product or immediately refund the price therefor, at
Purchaser’s option. If Seller is unable to replace any such
Product within 90 days of Purchaser’s rejection or revocation
of acceptance for any reason other than volitional declination to
do so, then the obligations to sell and purchase in respect of such
Product shall cease and be of no further effect or
force.
(c)
All rejected Products shall be
returned by Purchaser to Seller, at Seller’s sole cost,
promptly after Purchaser’s rejection or revocation of
acceptance of such Products.
Warranties of
Seller.
2.5
Warranties
o
