Document:

exhibit10_3.htm

    
      

    

    Exhibit
      10.3

     

    SECOND
      AMENDMENT TO PURCHASE AGREEMENT

     

    

     

    This
      SECOND AMENDMENT TO PURCHASE AGREEMENT (the "Amendment"), dated as of October
      29, 2007, is by and among Luby's, Inc., a Delaware corporation (together with
      its subsidiaries, the "Company"), and Harris J. Pappas and Christopher J.
      Pappas, individuals residing in Houston, Texas (together, the
      "Noteholders").  Unless otherwise specifically defined herein, each
      term used herein which is defined in the Purchase Agreement (as defined below)
      shall have the meaning assigned to such term in the Purchase
      Agreement.

     

    RECITALS

     

    WHEREAS,
      each of the Noteholders has agreed to amend the Employment Agreement, dated
      November 11, 2005, between the Company and such Noteholder, to, among other
      things, extend his employment with the Company for one year, until August 31,
      2009, without any increase in his annual base salary and without any other
      agreement as to compensation;

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements set forth
      herein and for good and valuable consideration, the receipt of which is hereby
      acknowledged, the parties hereto agree to amend that certain Purchase Agreement,
      dated March 9, 2001, by and between the Company and the Noteholders, as amended
      by the First Amendment to Purchase Agreement, dated as of June 7, 2004 (the
      "Purchase Agreement"), as follows:

     

    1.           Amendment
      of Section 1.1 (Definitions).  The following definition in
      Section 1.1 of the Purchase Agreement is hereby amended and restated in its
      entirety, to read as follows:

     

    ""Maximum
      Percentage Ownership" means (i) prior to March 15, 2002, 25%, (ii) from
      March 15, 2002 and prior to October 29, 2007, 28%, and (iii) on or after October
      29, 2007, 33%."

     

    2.           Amendment
      of Section 5.4 (Standstill).  Section 5.4 of the Purchase
      Agreement is hereby amended to add the following paragraph at the end of such
      Section 5.4:

     

    "(d)           Notwithstanding
      the foregoing, the Purchasers, together with their Affiliates and Associates
      and
      any 13d Group of which they are a part, shall not be deemed to Beneficially
      Own
      any Voting Stock or Common Stock of the Company in excess of the Maximum
      Percentage Ownership solely as the result of an acquisition of Voting Stock
      or
      Common Stock by the Company until such time thereafter as the Purchasers,
      together with their Affiliates and Associates and any 13d Group of which they
      are a part, shall become the Beneficial Owner (other than by means of a stock
      dividend or stock split or as a result of thereafter becoming the Beneficial
      Owner of shares issuable or issued upon the exercise of options to acquire
      Voting Stock or Common Stock granted to the Purchasers by the Company) of any
      additional shares of Voting Stock or Common Stock of the Company while the
      Purchasers, together with their Affiliates and Associates and any 13d Group
      of
      which they are a part, otherwise are, or as a result of which the Purchasers,
      together with their Affiliates and Associates and any 13d Group of which they
      are a part, otherwise become, the Beneficial Owner of any Voting Stock or Common
      Stock of the Company in excess of the Maximum Percentage
      Ownership."

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    3.           Counterparts.  This
      Amendment may be executed and delivered (including by facsimile transmission)
      in
      one or more counterparts, all of which shall be considered one and the same
      agreement and shall become effective when one or more counterparts have been
      signed by each of the parties and delivered to the other parties, it being
      understood that all parties need not sign the same counterpart.

     

    4.           Entire
      Agreement.  This Amendment together with the Purchase
      Agreement constitutes the entire agreement of the parties hereto and supersedes
      all prior agreements and understandings, both written and oral, among the
      parties with respect to the subject matter hereof.  There are no
      representations or warranties, agreements or covenants with respect to the
      subject matter hereof other than those expressly set forth in this Amendment
      and
      the Purchase Agreement.

     

    5.           Governing
      Law.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
      ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY
      CONFLICTS OF LAWS PROVISIONS.

     

    6.           Public
      Announcements.  The Company, on the one hand, and
      Noteholders, on the other, shall consult with each other before issuing any
      press release or otherwise making any public statements with respect to this
      Amendment or the transactions contemplated hereby, except for statements
      required by Law or by any listing agreements with or rules of any national
      securities exchange or the National Association of Securities Dealers, Inc.,
      or
      made in disclosures reasonably determined as required to be filed pursuant
      to
      the Securities Act or the Exchange Act.

     

    7.           Headings.  The
      headings of this Amendment are for convenience or reference only and are not
      part of the substance of this Amendment.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
      executed as of the date first written above.

     

     

     

    
      	 	 	 	 	
              LUBY’S,
                INC

            
	 	 	 	 	 
	 	 	 	
              By:

            	
              /s/Gasper
                Mir, III

            
	 	 	 	
              Name:

            	
              Gasper
                Mir, III

            
	 	 	 	
              Title:

            	
              Chairman
                of the Board

            

    

    

    

    

    
      	 	 	 	 	
              NOTEHOLDERS:

            
	 	 	 	 	 
	 	 	 	 	
              /s/Harris
                J. Pappas

            
	 	 	 	 	
              Harris
                J. Pappas

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	
              /s/Christopher
                J. Pappas

            
	 	 	 	 	
              Christopher
                J. Pappasexhibit104.htm

    
      
         

      

      
         

        
          

        

      

      
         

              

                  SUBORDINATED
            TERM LOAN PROMISSORY NOTE      
      

                  
      
      

                  $52,580,190.00                                                                                                                             October
            26, 2007      
    

      

    

    

    For
      and
      in consideration of value received, the undersigned, COMPX INTERNATIONAL
      INC., a corporation duly organized under the laws of Delaware
      (“Maker”), promises to pay to the order of TIMET FINANCE MANAGEMENT
      COMPANY, a corporation duly organized under the laws of Delaware
      (“Payee”), at its address 1007 Orange Street, Suite 1414, Wilmington, Delaware
      19801, in lawful money of the United States of America, the principal sum of
      Fifty-Two Million Five Hundred Eighty Thousand One Hundred and Ninety United
      States Dollars ($52,580,190.00) together with interest from the date hereof
      on
      the amount of principal from time to time outstanding at a rate equal to the
      three month United States LIBOR rate as quoted from time to time by The Wall
      Street Journal or other reliable source, plus one percent (1.00%) per annum.
      Interest shall be calculated on the basis of a year of 365/366 days and for
      the
      actual number of days (including the first, but excluding the last day) elapsed
      and shall be paid in arrears quarterly on the last day of each March, June,
      September and December, commencing December 31, 2007.

    

    Principal
      payments of $250,000 will be due and payable quarterly on the last day of each
      March, June, September and December commencing September 30, 2008, with any
      and
      all remaining outstanding principal and any accrued unpaid interest due on
      September 30, 2014 (the “Maturity Date”). All payments on this Note shall be
      applied first to accrued and unpaid interest, next to accrued interest not
      yet
      payable, and then to principal against the scheduled principal payments from
      earliest to latest. Maker may prepay principal at any time without penalty.
      In
      the event that principal or interest is not paid within five days of when due
      or
      declared due, interest shall thereafter accrue on the full amount of such
      payment at the rate of United States LIBOR plus three percent (3%) per
      annum.

    

    Notice
      of
      written demand for payment shall be made by Payee to Maker by certified mail,
      postage prepaid and return receipt requested to Maker’s address as set forth
      under its signature below. The demand for payment or any other communication
      shall be deemed given and effective as of the date of delivery or upon receipt
      as set forth on the return receipt.

    

    Upon
      the
      occurrence and during the continuation of an Event of Default (as defined
      below), Payee shall have all of the rights and remedies provided in the
      applicable Uniform Commercial Code, this Note or any other agreement between
      Maker and in favor of Payee, as well as those rights and remedies provided
      by
      any other applicable law, rule or regulation. In conjunction with and in
      addition to the foregoing rights and remedies of Payee, Payee may declare all
      indebtedness due under this Note, although otherwise unmatured, to be due and
      payable immediately without notice or demand whatsoever. All rights and remedies
      of the holder are cumulative and may be exercised singly or concurrently. The
      exercise of any right or remedy will not be a waiver of any other right or
      remedy.

    

    For
      purposes of this Note, an Event of Default shall mean any one of the following
      events:

    

    (a)           Maker
      fails to pay quarterly principal payments when due or interest payments within
      30 days of becoming due;

    
      
              

                 
      

                  
      
    

         

      

      
         

        
          

        

      

      
         

              

                  SUBORDINATED
            TERM LOAN PROMISSORY NOTE      
      

                  
      
      

                  $52,580,190.00                                                                                                                             October
            26, 2007      
    

      

    

    

    (b)           Maker
      otherwise fails to perform or observe any other provision contained in this
      Note
      and such breach or failure to perform shall continue for a period of thirty
      days
      after notice thereof shall have been given to Makers by the holder
      hereof;

    

    (c)           Maker
      defaults under any loan, extension of credit, security agreement, or any other
      agreement, in favor of any other creditor or person that may materially affect
      Maker’s ability to repay this Note or perform Maker’s obligations under this
      Note; or

    

    (d)           Maker
      becomes insolvent, a receiver is appointed for any part of Maker’s property,
      Maker makes an assignment for the benefit of creditors, or any proceeding is
      commenced either by Maker or against Maker under any bankruptcy or insolvency
      laws.

    

    In
      the
      event Payee incurs costs in collecting on this Note, this Note is placed in
      the
      hands of any attorney for collection, suit is filed on this Note or if
      proceedings are had in bankruptcy, receivership, reorganization, or other legal
      or judicial proceedings for the collection of this Note, Maker agrees to pay
      on
      demand to Payee all expenses and costs of collection, including, but not limited
      to, reasonable attorneys’ fees incurred in connection with any such collection,
      suit, or proceeding, in addition to the principal and interest then
      due.

    

    It
      is
      agreed that time is of the essence on this Note. The failure of the holder
      of
      this Note to exercise any remedy shall not constitute a waiver on the part
      of
      the holder of the right to exercise any remedy at any other time. It is the
      intention of Maker and Payee to conform strictly to applicable usury laws,
      if
      any. Accordingly, notwithstanding anything to the contrary in this Note or
      any
      other agreement entered into in connection herewith, it is agreed as follows:
      (i) the aggregate of all interest and any other charges constituting interest
      under applicable law and contracted for, chargeable or receivable under this
      Note or otherwise in connection with the obligation evidenced hereby shall
      under
      no circumstances exceed the maximum amount of interest permitted by applicable
      law, if any, and any excess shall be deemed a mistake and canceled automatically
      and, if theretofore paid, shall, at the option of Payee, be refunded to Maker
      or
      credited on the principal amount of this Note; and (ii) in the event that the
      entire unpaid balance of this Note is declared due and payable by Payee, then
      earned interest may never include more than the maximum amount permitted by
      applicable law, if any, and any unearned interest shall be canceled
      automatically and, if theretofore paid, shall at the option of Payee, either
      be
      refunded to Maker or credited on the principal amount of this Note.

    

    Maker
      expressly waives demand and presentment for payment, notice of nonpayment,
      protest, notice of protest, notice of dishonor, notice of intention to
      accelerate, notice of acceleration, bringing of suit and diligence in taking
      any
      action to collect amounts called for hereunder and is and shall be liable for
      the payment of all sums owing and to be owing hereon, regardless of and without
      any notice, diligence, act or omission as or with respect to the collection
      of
      any amount called for hereunder or in connection with any right, lien, interest
      or property at any and all times had or existing as security for any amount
      called for hereunder.

    
      
              

                 
      

                  
      
    

         

      

      
         

        
          

        

      

      
         

              

                  SUBORDINATED
            TERM LOAN PROMISSORY NOTE      
      

                  
      
      

                  $52,580,190.00                                                                                                                             October
            26, 2007      
    

      

    

    

    

    If
      any
      payment of principal on this Note shall become due on a Saturday, Sunday or
      public holiday under the laws of Delaware, United States of America, on which
      banks are not open for business, such payment shall be made on the next
      succeeding business day in which banks are open for business.

    

    Pursuant
      to the terms of that certain Subordination Agreement dated October 12, 2007,
      executed by the Payee, the Maker and certain subsidiaries of the Maker, the
      indebtedness evidenced by this Note is subordinate and junior in right of
      payment, to all principal, interest, charges, expenses and attorneys’ fees
      arising out of or relating to all indebtedness, liabilities and obligations
      of
      Maker arising under that certain Credit Agreement dated December 23, 2005,
      as
      amended by that certain First Amendment to Credit Agreement dated October 12,
      2007, by and between Maker and the Administrative Agent and Lenders set forth
      therein and all other amendments and modifications thereto, and the Loan
      Documents (as defined in such Credit Agreement) (the “Superior Debt”). Superior
      Debt shall continue to be Superior Debt and entitled to the benefits of these
      subordination provisions irrespective of any amendment, modification, or waiver
      of any term of the Superior Debt or extension or renewal of the Superior
      Debt.

    

    This
      Note
      shall be governed by and construed in accordance with the domestic laws of
      the
      state of Delaware, without giving effect to any choice of law or conflict of
      law
      provision or rule (whether of the state of Delaware or any other jurisdiction)
      that would cause the application of the laws of any jurisdiction other than
      the
      state of Delaware..

    

    MAKER:

    

    COMPX
      INTERNATIONAL INC.

    

    

    

    By:              

     

    Name:                                                                

     

    Title:              

     

    Address:

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