<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _________)*
Casa Ole Restaurants, Inc.
-----------------------------------------
(Name of Issuer)
Common Stock
---------------------------------------------------------
(Title of Class of Securities)
14712P104
-------------------------------------
(CUSIP Number)
Monte J. Mitchell
Locke Purnell Rain Harrell
2200 Ross Avenue
Suite 2200
Dallas, Texas 75201
(214) 740-8443
-------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 25, 1998
------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(b)(3) or (4), check
the following box [ ].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to
whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
Exhibit Index is located at page 6 herein.
(Continued on following pages)
<PAGE> 2
CUSIP NO. 14712P104
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Tex-Mex Partners, L.C.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Texas
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 376,487 (See Items 4 and 5)
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0- (See Items 4 and 5)
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
376,487 (See Items 4 and 5)
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
376,487 (See Items 4 and 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions)
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.5% (See Items 4 and 5)
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
OO
- --------------------------------------------------------------------------------
Page 2 of 34 Pages
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CUSIP No. 14712P104
ITEM 1. (SECURITY AND ISSUER)
The class of securities to which this Statement relates is the Common
Stock, par value $0.01 per share, of Casa Ole Restaurants, Inc., a Texas
corporation (the "Company"). The address of the principal executive offices of
the Company is 1135 Edgebrook, Houston, Texas 77034-1899.
ITEM 2. (IDENTITY AND BACKGROUND)
This Statement is being filed by Tex-Mex Partners, L.C., a Texas
limited liability company (the "Reporting Person"). The Reporting Person's
present principal business is that of an investment firm. The Reporting
Person's present principal business address is Phillips Point-West Tower, 777
South Flagler Drive, West Palm Beach, Florida 33401 and the address of its
principal office is Phillips Point-West Tower, 777 South Flagler Drive, West
Palm Beach, Florida 33401.
During the last five (5) years or otherwise, the Reporting Person has
not been (i) convicted in any criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) a party to any civil proceeding of a judicial
or administrative body of competent jurisdiction which caused such Reporting
Person to become subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
John C. Textor ("Textor") is the Managing Director of the Reporting
Person. Textor's business address is Phillips Point-West Tower, 777 South
Flagler Drive, West Palm Beach, Florida 33401. Textor's principal occupation
is that of a private investor and the name of the organization in which such
employment is conducted is Wyndcrest Partners, Ltd. ("Wyndcrest"). The
principal business of Wyndcrest is the acquisition, recapitalization and
restructuring of medium-sized private companies and the principal business
address of Wyndcrest is Phillips Point-West Tower, 777 South Flagler Drive,
West Palm Beach, Florida 33401.
During the last five (5) years or otherwise, Textor has not been (i)
convicted in any criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction which caused Textor to become
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Textor is a citizen of the United States of America.
ITEM 3. (SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION)
The Reporting Person has the right, commencing on April 25, 1997*, to
purchase 179,885 shares of Common Stock, par value $0.01 per share, of the
Company pursuant to the terms of that certain Warrant to Purchase Common Stock,
dated as of February 26, 1996, issued by the Company to the Reporting Person
(the "Company Warrant"). The Reporting Person has tendered to the Company the
sum of $17,988.50, the source of which was the working capital of the Reporting
Person, as
Page 3 of 34 Pages
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CUSIP NO. 14712P104
consideration for the Company Warrant, which consideration was accepted by the
Company on February 26, 1996.
The Reporting Person has the right, commencing on April 25, 1997*, to
purchase 196,602 shares of Common Stock, par value $0.01 per share of the
Company pursuant to the terms of that certain Warrant to Purchase Common Stock,
dated as of February 26, 1996, issued by Larry N. Forehand, an individual
residing in the State of Texas and a principal shareholder of the Company
("Forehand"), to the Reporting Person (the "Forehand Warrant"). The Reporting
Person has tendered to Forehand the sum of $19,660.20, the source of which was
the working capital of the Reporting Person, as consideration for the Forehand
Warrant, which consideration was accepted by Forehand on February 26, 1996.
The Company Warrant and the Forehand Warrant are hereinafter
collectively referred to as the "Warrants."
Each of the Warrants provides for an exercise price equal to the price
at which shares of Common Stock of the Company were offered to the public in
the Company's Initial Public Offering, as hereinafter defined ($11.00) less the
amount paid by the Reporting Person for the relevant Warrant ($0.10 per share).
The exercise price may be paid in cash or in shares of the Company's Common
Stock, valued at the fair market value per share on the date of exercise.
The source of the funds to be used in acquiring the Common Stock of
the Company pursuant to the Warrants will be the working capital of the
Reporting Person.
___________________________________________
*The rights of the Reporting Person pursuant to the Warrants were
exercisable on April 25, 1997, the first annual anniversary of the effective
date of the Company's Initial Public Offering; however, under the express terms
of the Warrants, that portion of each of the Warrants allocable to the
membership interest of Textor in the Reporting Person (currently fifty-four
percent (54%)) may not be exercised prior to April 25, 1998, the second annual
anniversary of the effective date of the Company's Initial Public Offering.
ITEM 4. (PURPOSE OF TRANSACTION)
On March 1, 1996, the Company filed with the Securities And Exchange
Commission a Registration Statement on Form S-1 under the Securities Act of
1933, in connection with its initial public offering of the Common Stock of the
Company (the "Initial Public Offering"). The effective date of the Initial
Public Offering was April 25, 1996. Prior to and in contemplation of the
Initial Public Offering, the Company entered into a certain Master Contribution
Agreement dated as of February 26, 1996 (the "Contribution Agreement") with
various parties which provided for, among other things, the organization and
capitalization of the Company.
In furtherance of the transactions contemplated by the Contribution
Agreement and by the Initial Public Offering: (i) the Company issued the
Company Warrant in favor of the Reporting Person and (ii) Forehand issued the
Forehand Warrant in favor of the Reporting Person. Subsequent to the
Page 4 of 34 Pages
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CUSIP NO. 14712P104
consummation of the transactions contemplated by the Contribution Agreement and
at the time of the Initial Public Offering, the Reporting Person became a
principal shareholder of the Company.
The acquisition of the Common Stock of the Company by the Reporting
Person pursuant to the Warrants will be effected for investment purposes.
At the time of this Statement, the Reporting Person does not have any
plans or proposals that relate to or would result in (i) the acquisition of
additional securities of the Company or the disposition of securities of the
Company; (ii) an extraordinary corporate transaction such as a merger,
reorganization or liquidation relating to the Company or any subsidiary; (iii)
a sale or transfer of a material amount of assets of the Company or any
subsidiary; (iv) any change in the board of directors or management of the
Company; (v) any material change in the present capitalization or dividend
policy of the Company or any other material change in the Company's business or
corporate structure; (vi) any change in the Company's Articles of Incorporation
or Bylaws or instruments corresponding thereto or other actions that may impede
the acquisition of control of the Company by any person; (vii) causing a class
of securities of the Company to be delisted from a national securities exchange
or to cease to be authorized to be quoted in an inter-dealer quotation system
of a registered national securities association; (viii) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as
amended; or (ix) any action similar to any of the foregoing.
At the time of this Statement, Textor does not have any plans or
proposals that relate to or would result in (i) the acquisition of additional
securities of the Company or the disposition of securities of the Company; (ii)
an extraordinary corporate transaction such as a merger, reorganization or
liquidation relating to the Company or any subsidiary; (iii) a sale or transfer
of a material amount of assets of the Company or any subsidiary; (iv) any
change in the board of directors or management of the Company; (v) any material
change in the present capitalization or dividend policy of the Company or any
other material change in the Company's business or corporate structure; (vi)
any change in the Company's Articles of Incorporation or Bylaws or instruments
corresponding thereto or other actions that may impede the acquisition of
control of the Company by any person; (vii) causing a class of securities of
the Company to be delisted from a national securities exchange or to cease to
be authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (viii) a class of equity securities of the
Company becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, as amended; or (ix) any action
similar to any of the foregoing.
ITEM 5. (INTEREST IN SECURITIES OF THE ISSUER)
As of the date hereof, the Reporting Person has no record ownership of
shares of the Company's Common Stock.
Page 5 of 34 Pages
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CUSIP NO. 14712P104
On April 25, 1998, the Reporting Person has the right to acquire,
pursuant to the Warrants, 376,487 shares of Common Stock of the Company. As a
result of the rights created by the Warrants, the Reporting Person has
beneficial ownership, sole voting power and sole dispositive power with respect
to 376,487 shares of Common Stock, constituting 10.5% of the 3,597,705
outstanding shares of the Company's Common Stock.
During the past sixty days, the Reporting Person has effected no
transactions in the Common Stock of the Company.
As of the date hereof, Textor has record ownership, sole voting power
and sole dispositive power with respect to 277 shares of Common Stock,
constituting .0076% of the 3,597,705 outstanding shares of the Company's Common
Stock.
On April 25, 1998, the Reporting Person has the right to acquire,
pursuant to the Warrants, 376,487 shares of Common Stock of the Company. As a
result of the rights created by the Warrants, Textor has beneficial ownership,
shared voting power and shared dispositive power with respect to 376,764 shares
of Common Stock, constituting 10.5% of the 3,597,705 outstanding shares of the
Company's Common Stock.
During the past sixty days, Textor has effected no transactions in the
Common Stock of the Company.
ITEM 6. (CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER)
Reference is made to the disclosure contained in Items 3 and 4 hereof.
Except as described therein, the Reporting Person has no contract, arrangement,
understanding or relationship (legal or otherwise) with any person with respect
to any securities of the Company.
Reference is made to the disclosure contained in Items 3 and 4 hereof.
Except as described therein, Textor has no contract, arrangement, understanding
or relationship (legal or otherwise) with any person with respect to any
securities of the Company.
ITEM 7. (MATERIAL TO BE FILED AS EXHIBITS)
Exhibit 1: Warrant to Purchase Common Stock Of Casa Ole
Restaurants, Inc., dated February 26, 1996, issued by
the Company in favor of the Reporting Person.
Exhibit 2: Warrant to Purchase Common Stock of Casa Ole
Restaurants, Inc., dated February 26, 1996, issued by
Larry N. Forehand in favor of the Reporting Person.
Page 6 of 34 Pages
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CUSIP NO. 14712P104
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Date: March 5, 1998 TEX-MEX PARTNERS, L.C.
By: /s/ John C. Textor
-----------------------------
Name: John C. Textor
Title: Managing Director
Page 7 of 34 Pages
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CUSIP NO. 14712P104
EXHIBIT 1
WARRANT TO PURCHASE
COMMON STOCK OF
CASA OLE RESTAURANTS, INC.
-------------------
Dated: February 26, 1996
- --------------------------------------------------------------------------------
NEITHER THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE; THEREFORE, THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF, IF ANY, MAY NOT BE SOLD OR
TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR UPON DELIVERY TO THE CORPORATION
OF AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
Page 8 of 34 Pages
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CUSIP NO. 14712P104
Void after 5:00 P.M., Houston, Texas Time, on the tenth (10th) anniversary of
the Initial Public Offering, as defined herein.
Warrant to Purchase
179,885 Shares of
Common Stock, Subject to
Adjustment as herein provided
WARRANT TO PURCHASE COMMON STOCK
CASA OLE RESTAURANTS, INC.
Dated as of the 26th day of February, 1996.
WHEREAS, TEX-MEX PARTNERS, L.C. ("Tex-Mex") desires to acquire for
investment purposes this Warrant to Purchase Common Stock providing for the
acquisition of 179,885 shares of Common Stock, subject to adjustment as
provided herein;
WHEREAS, Tex-Mex has tendered the sum of $17,988.50 as the purchase
price for this Warrant to Purchase Common Stock, and Casa Ole Restaurants, Inc.
has accepted the purchase price and does hereby tender this Warrant to Purchase
Common Stock to Tex-Mex;
NOW, THEREFORE, for and in consideration of past service and of the
mutual covenants, representations, warranties and agreements contained herein,
this is to certify that:
1. TEX-MEX PARTNERS, L.C. or its permitted and registered assigns
("Holder"), is entitled to purchase from time to time, subject to the
provisions and conditions herein, from CASA OLE RESTAURANTS, INC., a Texas
corporation (the "Company"), not later than the termination of the Exercise
Period of this Warrant to Purchase Common Stock (this "Warrant") as set forth
in Paragraph 4 below, an aggregate of one hundred seventy-nine thousand eight
hundred eighty-five (179,885) shares of common stock, $.01 par value per share,
of the Company (the "Common Stock") at the Exercise Price per share set forth
in Paragraph 2(c) herein, and upon such purchase to receive a certificate or
certificates representing such shares of Common Stock. The number of shares of
Common Stock to be received upon the exercise of this Warrant may be adjusted
from time to time as hereinafter set forth.
2. Defined Terms. As used in this Warrant, the following
capitalized terms shall have the meanings respectively assigned to them below,
which meanings shall be applicable equally to the singular and plural forms of
the terms so defined.
Page 9 of 34 Pages
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CUSIP NO. 14712P104
(a) "Business Day" shall mean any day except a Saturday,
Sunday or other day on which commercial banks in the State of Texas
are authorized or required by law to close.
(b) "Exercise Period" means the period commencing on the
first or second anniversary of the Initial Public Offering, whichever
the case may be as determined pursuant to Paragraph 5 hereof, and
terminating at 5:00 p.m., Houston, Texas time, on the tenth (10th)
anniversary of the Initial Public Offering or, in the event that the
tenth anniversary of the Initial Public Offering is not a Business
Day, the Business Day next following.
(c) "Exercise Price" shall mean the price at which shares
of Common Stock of this Company are offered to the public in the
Company's Initial Public Offering less the amount paid for the warrant
($.10 per share).
(d) "Fair Market Value per Share" as of any date shall
mean, for shares of Common Stock, the closing price of such Common
Stock on such date (or if there are no sales on such date, on the next
preceding Business Day on which there were sales), as reported on the
New York Stock Exchange Composite Tape, or if such Common Stock is not
listed or admitted to trading on the New York Stock Exchange, as
reported on the principal consolidated transaction reporting system
for the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if such Common Stock is not
listed or admitted to trading on any national securities exchange, the
closing price of such Common Stock as reported on the National Market
System of the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ"), or if such Common Stock is not
listed or admitted to trading on the NASDAQ National Market System,
the last quoted sales price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as
reported by the NASDAQ System or such other system then in use, or if
such Common Stock is not reported on any such system and is not listed
or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in such Common Stock
selected by the Board of Directors of the Company.
(e) "Holder" shall mean the Person(s) then registered as
the owner of the Warrant or Warrant Securities, as the case may be, on
the books and records of the Company.
(f) "Initial Public Offering" shall mean the Company's
initial public offering of one million seven hundred thousand
(1,700,000) shares of its Common Stock pursuant to its Form S-1
Registration Statement (Registration Number 333-1678) filed with the
Securities and Exchange Commission (the "Commission"), which Initial
Public Offering shall be deemed to commence on the date that the
Company's Form S-1 Registration Statement is declared effective by the
Commission.
(g) "Person" shall mean any natural person, corporation,
limited partnership, limited liability company, general partnership,
joint venture, association, company, or other organization, whether or
not a legal entity, and any government agency or political subdivision
thereof.
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CUSIP NO. 14712P104
(h) "Warrant Securities" shall mean the shares of Common
Stock (or other securities) of the Company purchasable or purchased
from time to time under this Warrant or acquired upon any transfer of
any such shares, together with all additional securities received in
payment of dividends or distributions on or splits of those securities
or received as a result of the adjustments provided for in Paragraph 6
hereof.
3. Exercise of Warrant. Subject to and in accordance with the
provisions and conditions hereof, this Warrant may be exercised from time to
time in whole or in part during the term of this Warrant as set forth in
Paragraph 5 hereof.
4. Term of Warrant. The term of this Warrant shall commence on
the date hereof and shall expire on the exercise in full of this Warrant by
Holder or at 5:00 p.m. Houston, Texas time on the termination of the Exercise
Period.
5. Manner of Exercise. Not earlier than the first anniversary of
the commencement of the Initial Public Offering, Holder may exercise this
Warrant in whole or in part in accordance with the terms hereof by mailing or
personally delivering to the Company (i) this Warrant, (ii) a Notice of
Exercise in the form of Exhibit I hereto duly executed by Holder and (iii)
payment of the Exercise Price per share, such payment to be in the form of
cash, a certified or official bank check made payable to the Company, a wire
transfer of funds to an account designated by the Company, or in shares of the
Common Stock valued at the Fair Market Value per Share on the date of exercise,
irrevocable instructions to the Company to exercise this Warrant and apply the
difference between the Fair Market Value per share on the date of exercise and
the Exercise Price with respect to certain of such shares of Common Stock as
payment for Warrant Securities, or any combination of the foregoing, together
with all federal and state excise taxes applicable upon such exercise;
provided, however, that notwithstanding the foregoing or anything else in this
Warrant to the contrary, that portion of the Warrant allocable to the
membership interest of John Textor in Tex-Mex (approximately fifty-four percent
(54%)) may not be exercised prior to the second anniversary of the commencement
of the Initial Public Offering. Upon receipt by the Company of this Warrant,
the Notice of Exercise and such payment, this Warrant shall be deemed to have
been exercised with respect to the number of shares of Common Stock subject to
such exercise and specified in the Notice of Exercise, and Holder shall
thereupon become the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding the fact that the stock transfer books of
the Company may then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to Holder. As soon as
practicable after any exercise, in whole or in part, of the Warrant, and in any
event within ten (10) Business Days thereafter, the Company will deliver to
Holder a stock certificate or certificates representing the shares of Common
Stock so purchased, with such certificate or certificates to be in such name(s)
and such denominations as Holder may specify in the Notice of Exercise. If
this Warrant is exercised for less than all of the shares of Common Stock
subject hereto, the Company shall, upon such exercise and surrender of this
Warrant for cancellation, promptly execute and deliver to Holder a new Warrant
of like tenor evidencing the right of Holder to purchase the balance of shares
of Common Stock purchasable hereunder. Any and all expenses of the Company
incurred by the Company upon exercise of this Warrant and the issuance of
Common Stock pursuant to this Warrant shall be borne by the Company.
Page 11 of 34 Pages
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CUSIP NO. 14712P104
6. Adjustment Provisions. (a) If the Company shall, during the
term hereof, (i) declare a dividend and make a distribution on the Common Stock
payable in shares of Common Stock, (ii) subdivide or combine its outstanding
shares of Common Stock, (iii) change the number of shares of Common Stock
issuable upon exercise of this Warrant by reclassification, exchange or
substitution, or (iv) reorganize the capital structure of the Company by
merger, reorganization, consolidation or sale of assets, then this Warrant
shall, after the happening of any such event, evidence the right to purchase
the number of shares of Common Stock or other securities that would have been
received as a result of that change with respect to the shares of Common Stock
as if such shares had been purchased under this Warrant immediately before
occurrence of such event. Such adjustment shall be made successively whenever
any event listed above shall occur. Any adjustment under this subparagraph (a)
shall become effective at the close of business on the date any such event
occurs.
(b) Notice of Adjustment. The Company shall give notice
of each adjustment or readjustment of the number of shares of Common Stock or
other securities issuable upon exercise of this Warrant to Holder or of the
Exercise Price per share at the address set forth in Paragraph 20 hereof.
7. Other Actions. The Company will not avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, whether by
amendment of its Articles of Incorporation or bylaws or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action or otherwise, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to
protect the rights of Holder; provided, however, that nothing herein shall
restrict the Company's ability, among other things, to grant employee stock
options and warrants and to issue stock upon the exercise thereof or to enter
into any other bona fide business transaction (including issuance of stock at
or below prevailing market prices). Without limiting the generality of the
foregoing, the Company (a) will not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise; (b) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of
all warrants, including this Warrant, from time to time outstanding; and (c)
will not transfer all or substantially all of its properties and assets to any
other Person (corporate or otherwise), or consolidate with or merge into any
other Person or permit any such person to consolidate with or merge into the
Company, unless such other Person shall expressly assume in writing and will be
bound by all of the terms of this Warrant.
8. Fractional Shares. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued in connection with the
exercise of this Warrant, but the Company shall pay, in lieu of any fractional
share, a cash payment on the basis of the Fair Value Per Share of the Common
Stock to be acquired pursuant to such exercise for such fractional share.
9. Registration Rights.
(a) If at any time during the term of the Exercise Period
of this Warrant the Company shall propose to file a registration
statement pursuant to the Securities Act of 1933, as amended (the
"Act"), for the purpose of registering shares of the Company's Common
Stock to be sold for
Page 12 of 34 Pages
<PAGE> 13
CUSIP NO. 14712P104
cash in an underwritten public offering, not less than thirty (30)
days prior to the proposed filing date of such registration statement
the Company shall give notice in writing to Holder of its intent to
file the proposed registration statement and the number of shares of
Common Stock it intends to register. Holder shall have the right to
request in writing within twenty (20) days of the receipt thereby of
such notice that the Company include in such registration any of the
Warrant Securities that Holder may have acquired pursuant to exercise
of this Warrant. If the total amount of securities, including Warrant
Securities, requested to be included in an offering by the holders of
any class of outstanding securities of the Company exceeds the amount
of securities that the managing underwriter reasonably and in writing
determines to be compatible with the success of the offering, then the
Company shall be required to include in the offering only that number
of such securities, including Warrant Securities, which the managing
underwriter reasonably determines will not jeopardize the success of
the offering (the securities so included to be apportioned pro rata
among the selling shareholders according to the total amount of
securities entitled to be included therein owned by each selling
shareholder or in such other proportions as shall mutually be agreed
to by such selling shareholders). Holder agrees that in the event
that Holder's Warrant Securities are to be included in the
registration statement, Holder will cooperate with the Company in the
preparation and filing of any such registration statement. All
expenses, disbursements and fees, except fees of any counsel hired by
Holder, incurred in connection with the registration by the Company of
any shares of Warrant Securities for any such Person under this
Paragraph 9(a) shall be borne by the Company.
(b) In the event of the preparation and filing of a
registration statement as provided in this Paragraph 9, the Company's
obligations to use its best efforts to effect the registration of
shares for Holder shall include such qualification under applicable
blue sky or other state securities laws as may be requested by Holder.
(c) In connection with any registration under the Act
pursuant to this Agreement: (i) the Company will furnish Holder with a
copy of the registration statement and all amendments thereto and will
supply Holder with copies of any prospectus included therein (and, if
necessary, with copies of a prospectus meeting the requirements of
Section 10(a)(3) of the Act; provided, however, that no such
prospectus need be supplied more than nine (9) months after the
effective date of such registration statement) in such quantities as
may be necessary for the purposes of such proposed sale or
distribution; and (ii) each Holder will be required to enter into an
underwriting agreement, in usual and customary form, with the
underwriters of such offering.
(d) Nothing in this Paragraph 9 shall be deemed to (i)
require the Company to proceed with any registration of its securities
after giving the notice herein provided; or (ii) provide Holder with
any right to participate in the selection of the managing
underwriter(s) for such offering.
10. Restrictions on Transfer. Holder represents and warrants that
this Warrant is being purchased for Holder's investment account without a view
towards the resale or distribution thereof in violation of applicable
securities laws. It is understood that in case of subsequent sale of such
Warrant
Page 13 of 34 Pages
<PAGE> 14
CUSIP NO. 14712P104
under certain circumstances, such sale might be deemed to constitute a public
distribution within the meaning of, and require registration under, the
provisions of the Act.
(a) Holder agrees that prior to making any disposition of
this Warrant, Holder will give written notice to the Company
describing briefly the manner of any such proposed disposition and
will not make any such disposition until the Company has notified
Holder in writing that each of the Company and Larry N. Forehand has
consented to the disposition, and (i) Holder has furnished the Company
with an opinion of counsel satisfactory to the Company addressed to
Holder and the Company to the effect that the proposed transfer, sale
or assignment is exempt from registration under the Act and state
securities laws, or (ii) a registration statement covering the Warrant
Securities issuable under this Warrant has been filed by the Company
and declared effective by the Commission.
(b) Holder acknowledges and agrees that unless the
Warrant Securities are registered under the Act, such Warrant
Securities shall be "restricted securities" for purposes of Rule 144
under the Act. Holder shall, prior to any transfer or disposition or
attempted transfer or disposition of such Warrant Securities give
written notice to the Company of Holder's intention to effect such
transfer or disposition and shall deliver to the Company an opinion of
legal counsel (reasonably suitable to the Company) that the proposed
transfer or disposition of the Warrant Securities may be effected
without registration thereof under the Act and without taking any
similar action under any other applicable securities laws, in which
case Holder shall be entitled to transfer or dispose of the Warrant
Securities in accordance with the terms of the notice delivered by
such Holder to the Company. Until such Warrant Securities are
registered under the Act pursuant to Paragraph 9 hereof, each
certificate evidencing the Warrant Securities so transferred or
disposed of (and each certificate evidencing any untransferred Warrant
Securities) shall bear the following restrictive legend unless in the
opinion of Company counsel such legend is not required:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or any
state securities laws. These shares may not be offered for
sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or pursuant to
an exemption from such registration."
(c) Notwithstanding the provisions of this Paragraph 10,
Tex-Mex may distribute the Warrant and Warrant Securities in whole or
in part to such of its members as shall agree in a writing delivered
to the Company (i) to hold the Warrant or Warrant Securities or
portion thereof for investment purposes and not with a view to the
distribution thereof and (ii) to be bound by the terms of this
Agreement.
(d) Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder thereof as the
absolute owner thereof for all purposes, notwithstanding any notice to
the contrary.
Page 14 of 34 Pages
<PAGE> 15
CUSIP NO. 14712P104
(e) In connection with any registration of shares of
stock, pursuant to this Paragraph 10, Holder shall furnish the Company
with such information concerning it and the proposed sale or
distribution as shall, in the opinion of counsel for the Company, be
required for use in the preparation of a registration statement.
11. Indemnification.
(a) If Holder shall acquire Warrant Securities (in such event,
being hereinafter referred to as the "Distributing Holder"), the
Company will indemnify and hold harmless the Distributing Holder and
each Person, if any, who controls the Distributing Holder within the
meaning of the Act against any losses, claims, damages, liabilities or
actions, joint or several (including all costs of defense and
investigation and all attorneys' fees), to which the Distributing
Holder or such controlling Person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages, liabilities or
actions (i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement referred to in
Paragraph 9 hereof and under which such shares of stock were
registered under the Act, and in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement
thereto, or (ii) arise out of or are based upon the omission or
alleged omission to state in any such document a material fact
required to be stated therein or necessary to make the statements in
any such document not misleading; and will reimburse the Distributing
Holder and each such controlling Person for any legal or other
expenses reasonably incurred by the Distributing Holder or such
controlling Person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is
based upon an untrue statement or omission made in said registration
statement, preliminary prospectus, final prospectus or amendment or
supplement to any of the foregoing in reliance upon and in conformity
with written information furnished by the Distributing Holder and/or
controlling Person for use in the preparation thereof.
(b) The Distributing Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed said registration statement and each Person, if any, who
controls the Company within the meaning of the Act, against any
losses, claims, damages, liabilities or actions (including all costs
of defense and investigation and all attorneys' fees), to which the
Company or any such director, officer or controlling Person may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions (i) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained, on
the effective date thereof, in any registration statement referred to
in Paragraph 9 hereof and under which such shares of stock were
registered under the Act, and in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement
thereto, or (ii) arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and will reimburse the Company or any such director,
officer or controlling Person for any legal or other expenses
reasonably incurred thereby in connection with investigating or
defending any such loss, claim, damage, liability or action, in each
case to the extent, but only to the extent, that such
Page 15 of 34 Pages
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CUSIP NO. 14712P104
untrue statement or alleged untrue statement or omission or alleged
omission was made in said registration statement, preliminary
prospectus, final prospectus or amendment or supplement to any of the
foregoing in reliance upon and in conformity with written information
furnished by the Distributing Holder and/or controlling Person for use
in the preparation thereof.
(c) Promptly after receipt by an indemnified party under
this Paragraph 11 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this Paragraph 11, notify the
indemnifying party of the commencement thereof, but the failure so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under this
Paragraph 11.
(d) In case any such action is brought against any
indemnified party and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate in, and to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; and
after notice from the indemnifying party to the indemnified party that
it will assume the defense thereof, with counsel satisfactory to the
indemnified party, the indemnifying party will not be liable to such
indemnified party under this Paragraph 11 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right
to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall
not be at the expense of the indemnifying party if the indemnifying
party has assumed the defense of the action with counsel reasonably
satisfactory to the indemnified party; provided, however, that the
fees and expenses of the indemnified party's counsel shall be at the
expense of the indemnifying party if (i) the employment of such
counsel has been specifically authorized in writing by the
indemnifying party or (ii) the named parties to such action (including
any impleaded parties) include both the indemnified party and the
indemnifying party and such indemnified party shall have been advised
by counsel that there may be one or more legal defenses available to
such indemnified party that are not available to the indemnifying
party (in which case the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate
firm of attorneys for the indemnified party, which firm shall be
designated in writing by the indemnified party). The indemnifying
party shall not be liable for any settlement of any such action or
proceeding effected without its written consent, but if settled with
its written consent, or if there be a final judgment for the plaintiff
in any such action or proceeding, the indemnifying party agrees to
indemnify and hold harmless the indemnified party from and against any
loss or liability by reason of such settlement or judgment.
12. Reservation of Stock Issuable upon Exercise. The Company will
at all times reserve and keep available, solely for issuance and delivery upon
the exercise of this Warrant, such number of its
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CUSIP NO. 14712P104
shares of Common Stock or other securities as shall from time to time be
sufficient to effect the exercise of this Warrant. If at any time the number
of authorized but unissued shares of Common Stock or other securities shall not
be sufficient for such purposes, the Company will take such corporate actions
as may, in the opinion of its counsel, be necessary to increase the Company's
authorized but unissued shares of Common Stock or other securities to such
number of shares as shall be sufficient for such purpose.
13. Representations and Warranties of the Company. The Company
represents and warrants to Holder that (a) it has all requisite corporate power
and authority, and has taken all necessary corporate action, to issue and
deliver this Warrant, to authorize and reserve for issuance and, upon payment
from time to time of the Exercise Price, to issue and deliver the Warrant
Securities issuable upon the exercise of this Warrant; (b) the Warrant
Securities to be delivered upon exercise of this Warrant, when payment is made
therefor in accordance with the terms of this Warrant, will be validly issued,
fully paid and nonassessable; (c) the holder of this Warrant shall receive good
and marketable title to the Warrant Securities, free and clear of all voting
and other trust arrangements, liens, encumbrances, equities and claims
whatsoever not created by Holder, and it shall have paid all taxes, if any, in
respect to the issuance thereof; and (d) the execution and delivery of this
Warrant and the consummation of the transactions herein contemplated will not
result in a breach or violation of, or constitute a default or an event
permitting acceleration under, any statute, its Articles of Incorporation or
bylaws, or any mortgage, lease, indenture or any other agreement, instrument,
decree, order, judgment, rule or regulation to which it is subject or a party.
14. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company will execute and deliver at its
expense, in lieu thereof, a new warrant of like tenor to Holder.
15. Specific Performance. The Company stipulates that the
remedies at law available to the holder of this Warrant in the event of any
default or threatened default by it in the performance of or compliance with
any of the terms of the Agreement are not and will not be adequate, and that
such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
16. Applicable Law. THIS WARRANT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CHOICE OF LAWS OF SUCH STATE.
17. Entire Agreement. This Warrant constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes any and all prior agreements and understandings relating to the
subject matter hereof. This Warrant and any of the terms hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.
Page 17 of 34 Pages
<PAGE> 18
CUSIP NO. 14712P104
18. Successors and Assigns. This Warrant shall be binding upon
and inure to the benefit of the Company and Holder and their respective
successors and permitted assigns; provided, however, nothing herein shall be
construed to permit assignment of the Warrant except in accordance with the
provisions herein.
19. Severability. Every provision of this Warrant is intended to
be severable. If any term or provision hereof (or portion thereof) is
determined to be illegal or unenforceable for any reason whatsoever, such
illegality or unenforceability shall not affect any other term or provision (or
portion thereof) of this Warrant.
20. Notices. All notices and other communications from the
Company to the holder of this Warrant shall be mailed by first class registered
or certified mail, postage prepaid, at the following address or at such other
address as may have been furnished to the Company in writing by such holder,
or, until an address is so furnished, to the address of the last holder of such
Warrant who has so furnished an address to the Company:
If to the Company:
Casa Ole Restaurants, Inc.
1135 Edgebrook
Houston, Texas 77034-1899
If to Holder:
[Tex-Mex Partners, L.C.
----------------------
, ]
-------- ------- -----
IN WITNESS WHEREOF, this Warrant has been executed on behalf of Casa
Ole Restaurants, Inc. by its duly authorized officers as of the date first
above written.
CASA OLE RESTAURANTS, INC.
By: /s/ Patrick A. Morris
----------------------------------------------
Patrick A. Morris, President
Page 18 of 34 Pages
<PAGE> 19
CUSIP NO. 14712P104
The terms and provisions of the Warrant are accepted and agreed to
this 26th day of February, 1996.
TEX-MEX PARTNERS, L.C.
By: /s/ John C. Textor
----------------------------------------------
Printed Name: John C. Textor
Title: Managing Director
Page 19 of 34 Pages
<PAGE> 20
CUSIP NO. 14712P104
EXHIBIT "I"
-----------
NOTICE OF EXERCISE
(To be executed by Holder to exercise the
Warrant in whole or in part)
Casa Ole Restaurants, Inc.
1135 Edgebrook
Houston, Texas 77034-1899
Re: Warrant to Purchase Common Stock dated __________ ___, 1996 by
and between Casa Ole Restaurants, Inc. and Tex-Mex Partners,
L.C. (the "Warrant")
Dear Sir or Madam:
The undersigned holder irrevocably elects to exercise the Warrant to
purchase ___________ shares of Common Stock of Casa Ole Restaurants, Inc. (the
"Company") subject to the Warrant, and hereby makes payment of the amount of
$__ _____________ in the manner described below, representing the Exercise
Price per share of Common Stock multiplied by the number of shares of Common
Stock to be purchased pursuant to this exercise.
By:
----------------------------------
$___________________ cash
$___________________ certified or bank cashier's check
$___________________ wire transfer
$___________________ shares of Common Stock of the Company
The undersigned requests that certificates for such shares of Common
Stock be issued as follows:
Name:
----------------------------------------------
Address:
--------------------------------------------
--------------------------------------------
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<PAGE> 21
CUSIP NO. 14712P104
and if the exercise shall not be for all of the shares of Common Stock
evidenced by the Warrant, that a new warrant for the balance of the shares and
upon the same terms and conditions be registered in the name of, and delivered
to, the undersigned at Holder's address as set forth below:
--------------------------------------------------
--------------------------------------------------
By:
--------------------------------
Date:
------------------------------
Page 21 of 34 Pages
<PAGE> 22
CUSIP NO. 14712P104
EXHIBIT 2
---------
WARRANT TO PURCHASE
COMMON STOCK OF
CASA OLE RESTAURANTS, INC.
------------------
Dated: February 26, 1996
- --------------------------------------------------------------------------------
NEITHER THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE; THEREFORE, THIS WARRANT AND THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF, IF ANY, MAY NOT BE SOLD OR
TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR UPON DELIVERY TO THE CORPORATION
OF AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
Page 22 of 34 Pages
<PAGE> 23
CUSIP NO. 1412P104
Void after 5:00 P.M., Houston, Texas Time, on the tenth (10th) anniversary of
the Initial Public Offering, as defined herein.
Warrant to Purchase
196,602 Shares of
Common Stock, Subject to
Adjustment as herein provided
WARRANT TO PURCHASE COMMON STOCK
CASA OLE RESTAURANTS, INC.
Dated as of the 26th day of February, 1996.
WHEREAS, TEX-MEX PARTNERS, L.C. desires to acquire for investment
purposes this Warrant to Purchase Common Stock providing for the acquisition of
196,602 shares of Common Stock, subject to adjustment as provided herein;
WHEREAS, TEX-MEX PARTNERS, L.C. has tendered the sum of $19,660.20 as
the purchase price for this Warrant to Purchase Common Stock, and LARRY N.
FOREHAND has accepted the purchase price and does hereby tender this Warrant to
Purchase Common Stock to TEX-MEX PARTNERS, L.C.
NOW, THEREFORE, for and in consideration of past service and of the
mutual covenants, representations, warranties and agreements contained herein,
this is to certify that:
1. TEX-MEX PARTNERS, L.C. or its permitted and registered assigns
("Holder"), is entitled to purchase from time to time, subject to the
provisions and conditions herein, from the undersigned LARRY N. FOREHAND
("Grantor"), not later than the termination of the Exercise Period of this
Warrant to Purchase Common Stock (this "Warrant") as set forth in Paragraph 4
below, an aggregate of One Hundred Ninety Six Thousand Six Hundred Two
(196,602) shares of common stock, $.01 par value per share, of CASA OLE
RESTAURANTS, INC., a Texas corporation (the "Company") (the "Common Stock"), at
the Exercise Price per share set forth in Paragraph 2(c) herein, and upon such
purchase to receive a certificate or certificates representing such shares of
Common Stock. The number of shares of Common Stock to be received upon the
exercise of this Warrant may be adjusted from time to time as hereinafter set
forth.
2. Defined Terms. As used in this Warrant, the following
capitalized terms shall have the meanings respectively assigned to them below,
which meanings shall be applicable equally to the singular and plural forms of
the terms so defined.
Page 23 of 34 Pages
<PAGE> 24
CUSIP NO. 1412P104
(a) "Business Day" shall mean any day except a Saturday,
Sunday or other day on which commercial banks in the State of Texas
are authorized or required by law to close.
(b) "Exercise Period" means the period commencing on the
second anniversary of the Initial Public Offering first or second
anniversary of the Initial Public Offering, whichever the case may be
as determined pursuant to Paragraph 5 hereof, and terminating at 5:00
p.m., Houston, Texas time, on the tenth (10th) anniversary of the
Initial Public Offering or, in the event that the tenth anniversary of
the Initial Public Offering is not a Business Day, the Business Day
next following.
(c) "Exercise Price" shall mean the price at which shares
of Common Stock of this Company are offered to the public in the
Company's Initial Public Offering less the amount paid for the warrant
($.10 per share).
(d) "Fair Market Value per Share" as of any date shall
mean, for shares of Common Stock, the closing price of such Common
Stock on such date (or if there are no sales on such date, on the next
preceding Business Day on which there were sales), as reported on the
New York Stock Exchange Composite Tape, or if such Common Stock is not
listed or admitted to trading on the New York Stock Exchange, as
reported on the principal consolidated transaction reporting system
for the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if such Common Stock is not
listed or admitted to trading on any national securities exchange, the
closing price of such Common Stock as reported on the National Market
System of the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ"), or if such Common Stock is not
listed or admitted to trading on the NASDAQ National Market System,
the last quoted sales price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as
reported by the NASDAQ System or such other system then in use, or if
such Common Stock is not reported on any such system and is not listed
or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in such Common Stock
selected by the Board of Directors of the Company.
(e) "Holder" shall mean the Person(s) then registered as
the owner of the Warrant or Warrant Securities, as the case may be, on
the books and records of the Company.
(f) "Initial Public Offering" shall mean the Company's
initial public offering of one million seven hundred thousand
(1,700,000) shares of its Common Stock pursuant to its Form S-1
Registration Statement (Registration Number 333-1678) filed with the
Securities and Exchange Commission (the "Commission"), which Initial
Public Offering shall be deemed to commence on the date that the
Company's Form S-1 Registration Statement is declared effective by the
Commission.
(g) "Person" shall mean any natural person, corporation,
limited partnership, limited liability company, general partnership,
joint venture, association, company, or other organization, whether or
not a legal entity, and any government agency or political subdivision
thereof.
Page 24 of 34 Pages
<PAGE> 25
CUSIP NO. 1412P104
(h) "Warrant Securities" shall mean the shares of Common
Stock (or other securities) of the Company purchasable or purchased
from time to time under this Warrant or acquired upon any transfer of
any such shares, together with all additional securities received in
payment of dividends or distributions on or splits of those securities
or received as a result of the adjustments provided for in Paragraph 6
hereof.
3. Exercise of Warrant. Subject to and in accordance with the
provisions and conditions hereof, this Warrant may be exercised from time to
time in whole or in part during the term of this Warrant as set forth in
Paragraph 5 hereof.
4. Term of Warrant. The term of this Warrant shall commence on
the date hereof and shall expire on the exercise in full of this Warrant by
Holder or at 5:00 p.m. Houston, Texas time on the termination of the Exercise
Period.
5. Manner of Exercise. Not earlier than the second anniversary
of the commencement of the Initial Public Offering, Holder may exercise this
Warrant in whole or in part in accordance with the terms hereof by mailing or
personally delivering to Grantor (i) this Warrant, (ii) a Notice of Exercise in
the form of Exhibit I hereto duly executed by Holder and (iii) payment of the
Exercise Price per share, such payment to be in the form of cash, a certified
or official bank check made payable to Grantor, or a wire transfer of funds to
an account designated by Grantor, or any combination of the foregoing, together
with all federal and state excise taxes applicable upon such exercise,
provided, however, that notwithstanding the foregoing or anything else in this
Warrant to the contrary, that portion of the Warrant allocable to the
membership interest of John Textor in Tex-Mex (approximately fifty-four percent
(54%)) may not be exercised prior to the second anniversary of the commencement
of the Initial Public Offering. Upon receipt by Grantor of this Warrant, the
Notice of Exercise and such payment, this Warrant shall be deemed to have been
exercised with respect to the number of shares of Common Stock subject to such
exercise and specified in the Notice of Exercise, and Holder shall thereupon
become the holder of record of the shares of Common Stock issuable upon such
exercise, notwithstanding the fact that the stock transfer books of the Company
may then be closed or that certificates representing such shares of Common
Stock shall not then be actually delivered to Holder. As soon as practicable
after any exercise, in whole or in part, of the Warrant, and in any event
within ten (10) Business Days thereafter, Grantor will deliver to Holder a
stock certificate or certificates representing the shares of Common Stock so
purchased, with such certificate or certificates to be in such name(s) and such
denominations as Holder may specify in the Notice of Exercise. If this Warrant
is exercised for less than all of the shares of Common Stock subject hereto,
Grantor shall, upon such exercise and surrender of this Warrant for
cancellation, promptly execute and deliver to Holder a new Warrant of like
tenor evidencing the right of Holder to purchase the balance of shares of
Common Stock purchasable hereunder.
6. Adjustment Provisions. (a) If the Company shall, during the
term hereof, (i) declare a dividend and make a distribution on the Common Stock
payable in shares of Common Stock, (ii) subdivide or combine its outstanding
shares of Common Stock, (iii) change the number of shares of Common Stock
issuable upon exercise of this Warrant by reclassification, exchange or
substitution, or (iv) reorganize the capital structure of the Company by
merger, reorganization, consolidation or sale of assets, then this Warrant
shall, after the happening of any such event, evidence the right to purchase
the
Page 25 of 34 Pages
<PAGE> 26
CUSIP NO. 1412P104
number of shares of Common Stock or other securities that would have been
received as a result of that change with respect to the shares of Common Stock
as if such shares had been purchased under this Warrant immediately before
occurrence of such event. Such adjustment shall be made successively whenever
any event listed above shall occur. Any adjustment under this subparagraph (a)
shall become effective at the close of business on the date any such event
occurs.
(b) Notice of Adjustment. Grantor shall give notice of
each adjustment or readjustment of the number of shares of Common Stock or
other securities issuable upon exercise of this Warrant to Holder or of the
Exercise Price per share at the address set forth in Paragraph 20 hereof.
7. Fractional Shares. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued in connection with the
exercise of this Warrant, but Grantor shall pay, in lieu of any fractional
share, a cash payment on the basis of the Fair Value Per Share of the Common
Stock to be acquired pursuant to such exercise for such fractional share.
8. Registration Rights.
(a) If at any time during the term of the Exercise Period
of this Warrant the Company shall propose to file a registration
statement pursuant to the Securities Act of 1933, as amended (the
"Act"), for the purpose of registering shares of the Company's Common
Stock to be sold for cash in an underwritten public offering, not less
than thirty (30) days prior to the proposed filing date of such
registration statement the Company shall give notice in writing to
Holder of its intent to file the proposed registration statement and
the number of shares of Common Stock it intends to register. Holder
shall have the right to request in writing within twenty (20) days of
the receipt thereby of such notice that the Company include in such
registration any of the Warrant Securities that Holder may have
acquired pursuant to exercise of this Warrant. If the total amount of
securities, including Warrant Securities, requested to be included in
an offering by the holders of any class of outstanding securities of
the Company exceeds the amount of securities that the managing
underwriter reasonably and in writing determines to be compatible with
the success of the offering, then the Company shall be required to
include in the offering only that number of such securities, including
Warrant Securities, which the managing underwriter reasonably
determines will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling
shareholders according to the total amount of securities entitled to
be included therein owned by each selling shareholder or in such other
proportions as shall mutually be agreed to by such selling
shareholders). Holder agrees that in the event that Holder's Warrant
Securities are to be included in the registration statement, Holder
will cooperate with the Company in the preparation and filing of any
such registration statement. All expenses, disbursements and fees,
except fees of any counsel hired by Holder, incurred in connection
with the registration by the Company of any shares of Warrant
Securities for any such Person under this Paragraph 8(a) shall be
borne by the Company.
(b) In the event of the preparation and filing of a
registration statement as provided in this Paragraph 8, the Company's
obligations to use its best efforts to effect the registration of
Page 26 of 34 Pages
<PAGE> 27
CUSIP NO. 1412P104
shares for Holder shall include such qualification under applicable
blue sky or other state securities laws as may be requested by Holder.
(c) In connection with any registration under the Act
pursuant to this Agreement: (i) the Company will furnish Holder with a
copy of the registration statement and all amendments thereto and will
supply Holder with copies of any prospectus included therein (and, if
necessary, with copies of a prospectus meeting the requirements of
Section 10(a)(3) of the Act; provided, however, that no such
prospectus need be supplied more than nine (9) months after the
effective date of such registration statement) in such quantities as
may be necessary for the purposes of such proposed sale or
distribution; and (ii) each Holder will be required to enter into an
underwriting agreement, in usual and customary form, with the
underwriters of such offering.
(d) Nothing in this Paragraph 8 shall be deemed to (i)
require the Company to proceed with any registration of its securities
after giving the notice herein provided; or (ii) provide Holder with
any right to participate in the selection of the managing
underwriter(s) for such offering.
9. Restrictions on Transfer. Holder represents and warrants that
this Warrant is being purchased for Holder's investment account without a view
towards the resale or distribution thereof in violation of applicable
securities laws. It is understood that in case of subsequent sale of such
Warrant under certain circumstances, such sale might be deemed to constitute a
public distribution within the meaning of, and require registration under, the
provisions of the Act.
(a) Holder agrees that prior to making any disposition of
this Warrant, Holder will give written notice to Grantor and the
Company describing briefly the manner of any such proposed disposition
and will not make any such disposition until Grantor has notified
Holder in writing that each of the Company and Grantor has consented
to the disposition, and (i) Holder has furnished Grantor with an
opinion of counsel satisfactory to Grantor addressed to Holder and
Grantor to the effect that the proposed transfer, sale or assignment
is exempt from registration under the Act and state securities laws,
or (ii) a registration statement covering the Warrant Securities
issuable under this Warrant has been filed by the Company and declared
effective by the Commission.
(b) Holder acknowledges and agrees that unless the
Warrant Securities are registered under the Act, such Warrant
Securities shall be "restricted securities" for purposes of Rule 144
under the Act. Holder shall, prior to any transfer or disposition or
attempted transfer or disposition of such Warrant Securities give
written notice to Grantor of Holder's intention to effect such
transfer or disposition and shall deliver to Grantor an opinion of
legal counsel (reasonably suitable to Grantor) that the proposed
transfer or disposition of the Warrant Securities may be effected
without registration thereof under the Act and without taking any
similar action under any other applicable securities laws, in which
case Holder shall be entitled to transfer or dispose of the Warrant
Securities in accordance with the terms of the notice delivered by
such Holder to the Company. Until such Warrant Securities are
registered under the Act pursuant to Paragraph 8 hereof, each
certificate evidencing the Warrant Securities so transferred or
disposed
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CUSIP NO. 1412P104
of (and each certificate evidencing any untransferred Warrant
Securities) shall bear the following restrictive legend unless in the
opinion of Company counsel such legend is not required:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or any
state securities laws. These shares may not be offered for
sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or pursuant to
an exemption from such registration."
(c) Notwithstanding the provisions of this Paragraph 9,
Tex-Mex may distribute the Warrant and Warrant Securities in whole or
in part to such of its members as shall agree in writing delivered to
Grantor (with a copy to the Company) (i) to hold the Warrant or
Warrant Securities or portion thereof for investment purposes and not
with a view to the distribution thereof and (ii) to be bound by the
terms of this Agreement.
(d) Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder thereof as the
absolute owner thereof for all purposes, notwithstanding any notice to
the contrary.
(e) In connection with any registration of shares of
stock, pursuant to this Paragraph 9, Holder shall furnish the Company
with such information concerning it and the proposed sale or
distribution as shall, in the opinion of counsel for the Company, be
required for use in the preparation of a registration statement.
10. Indemnification.
(a) If Holder shall acquire Warrant Securities (in such event,
being hereinafter referred to as the "Distributing Holder"), the
Company will indemnify and hold harmless the Distributing Holder and
each Person, if any, who controls the Distributing Holder within the
meaning of the Act against any losses, claims, damages, liabilities or
actions, joint or several (including all costs of defense and
investigation and all attorneys' fees), to which the Distributing
Holder or such controlling Person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages, liabilities or
actions (i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement referred to in
Paragraph 8 hereof and under which such shares of stock were
registered under the Act, and in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement
thereto, or (ii) arise out of or are based upon the omission or
alleged omission to state in any such document a material fact
required to be stated therein or necessary to make the statements in
any such document not misleading; and will reimburse the Distributing
Holder and each such controlling Person for any legal or other
expenses reasonably incurred by the Distributing Holder or such
controlling Person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is
based upon an untrue statement or omission
Page 28 of 34 Pages
<PAGE> 29
CUSIP NO. 1412P104
made in said registration statement, preliminary prospectus, final
prospectus or amendment or supplement to any of the foregoing in
reliance upon and in conformity with written information furnished by
the Distributing Holder and/or controlling Person for use in the
preparation thereof.
(b) The Distributing Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed said registration statement and each Person, if any, who
controls the Company within the meaning of the Act, against any
losses, claims, damages, liabilities or actions (including all costs
of defense and investigation and all attorneys' fees), to which the
Company or any such director, officer or controlling Person may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions (i) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained, on
the effective date thereof, in any registration statement referred to
in Paragraph 8 hereof and under which such shares of stock were
registered under the Act, and in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement
thereto, or (ii) arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and will reimburse the Company or any such director,
officer or controlling Person for any legal or other expenses
reasonably incurred thereby in connection with investigating or
defending any such loss, claim, damage, liability or action, in each
case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made
in said registration statement, preliminary prospectus, final
prospectus or amendment or supplement to any of the foregoing in
reliance upon and in conformity with written information furnished by
the Distributing Holder and/or controlling Person for use in the
preparation thereof.
(c) Promptly after receipt by an indemnified party under
this Paragraph 10 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this Paragraph 10, notify the
indemnifying party of the commencement thereof, but the failure so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under this
Paragraph 10.
(d) In case any such action is brought against any
indemnified party and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate in, and to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; and
after notice from the indemnifying party to the indemnified party that
it will assume the defense thereof, with counsel satisfactory to the
indemnified party, the indemnifying party will not be liable to such
indemnified party under this Paragraph 10 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right
to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall
not be at the expense of the indemnifying party if the indemnifying
party has assumed the defense of the action with counsel reasonably
satisfactory to the indemnified party; provided, however, that the
fees and expenses of the indemnified party's counsel shall be at the
expense of the indemnifying
Page 29 of 34 Pages
<PAGE> 30
CUSIP NO. 1412P104
party if (i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party or (ii) the named
parties to such action (including any impleaded parties) include both
the indemnified party and the indemnifying party and such indemnified
party shall have been advised by counsel that there may be one or more
legal defenses available to such indemnified party that are not
available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on
behalf of such indemnified party, it being understood, however, that
the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys for the indemnified party, which
firm shall be designated in writing by the indemnified party). The
indemnifying party shall not be liable for any settlement of any such
action or proceeding effected without its written consent, but if
settled with its written consent, or if there be a final judgment for
the plaintiff in any such action or proceeding, the indemnifying party
agrees to indemnify and hold harmless the indemnified party from and
against any loss or liability by reason of such settlement or
judgment.
11. Stock to be Delivered upon Exercise. Grantor will at all
times keep available through the term of the Exercise Period, solely for
delivery upon the exercise of this Warrant, such number of the shares of Common
Stock or other securities as shall from time to time be sufficient to effect
the exercise of this Warrant.
12. Representations and Warranties of the Company. Grantor
represents and warrants to Holder that (a) he has all requisite power and
authority, and has taken all necessary action, to issue and deliver this
Warrant and, upon payment from time to time of the Exercise Price, to deliver
the Warrant Securities upon the exercise of this Warrant; (b) the Warrant
Securities to be delivered upon exercise of this Warrant, when payment is made
therefor in accordance with the terms of this Warrant, will be fully paid and
nonassessable; (c) the holder of this Warrant shall receive good and marketable
title to the Warrant Securities, free and clear of all voting and other trust
arrangements, liens, encumbrances, equities and claims whatsoever not created
by Holder; and (d) the execution and delivery of this Warrant and the
consummation of the transactions herein contemplated will not result in a
breach or violation of, or constitute a default or an event permitting
acceleration under, any statute, or any mortgage, lease, indenture or any other
agreement, instrument, decree, order, judgment, rule or regulation to which
Grantor is subject or a party.
13. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to Grantor of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to Grantor
or, in the case of any such mutilation, upon surrender and cancellation of this
Warrant, Grantor will execute and deliver, in lieu thereof, a new warrant of
like tenor to Holder.
14. Specific Performance. Grantor stipulates that the remedies at
law available to the holder of this Warrant in the event of any default or
threatened default by it in the performance of or compliance with any of the
terms of the Agreement are not and will not be adequate, and that such terms
Page 30 of 34 Pages
<PAGE> 31
CUSIP NO. 1412P104
may be specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.
15. Applicable Law. THIS WARRANT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CHOICE OF LAWS OF SUCH STATE.
16. Entire Agreement. This Warrant constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes any and all prior agreements and understandings relating to the
subject matter hereof. This Warrant and any of the terms hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.
17. Successors and Assigns. This Warrant shall be binding upon
and inure to the benefit of Grantor, the Company (solely with respect to the
provisions of Paragraphs 8 and 10 hereof) and Holder and their respective
successors and permitted assigns; provided, however, nothing herein shall be
construed to permit assignment of the Warrant except in accordance with the
provisions herein.
18. Severability. Every provision of this Warrant is intended to
be severable. If any term or provision hereof (or portion thereof) is
determined to be illegal or unenforceable for any reason whatsoever, such
illegality or unenforceability shall not affect any other term or provision (or
portion thereof) of this Warrant.
19. Notices. All notices and other communications from Grantor to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at the following address or at such other
address as may have been furnished to Grantor in writing by such holder, or,
until an address is so furnished, to the address of the last holder of such
Warrant who has so furnished an address to Grantor:
If to Grantor:
Larry N. Forehand
Casa Ole Restaurants, Inc.
1135 Edgebrook
Houston, Texas 77034-1899
If to Holder:
Tex-Mex Partners, L.C.
-----------------------
IN WITNESS WHEREOF, this Warrant has been executed by LARRY N.
FOREHAND as of the date first above written.
Page 31 of 34 Pages
<PAGE> 32
CUSIP NO. 14712P104
GRANTOR:
/s/ Larry N. Forehand
------------------------------------------
Larry N. Forehand
IN WITNESS WHEREOF, this Warrant has been executed by CASA OLE
RESTAURANTS, INC., by its duly authorized officers as of the date first above
written.
CASA OLE RESTAURANTS, INC. (solely
with respect to Paragraphs 8 and 10 hereof)
By: /s/ LOUIS P. NEEB
-------------------------------------
Printed Name: Louis P. Neeb
Title: Chairman
The terms and provisions of the Warrant are accepted and agreed to
this 26th day of February, 1996.
Tex-Mex Partners, L.C.
By: /s/ JOHN C. TEXTOR
---------------------------------------
Printed Name: John C. Textor
Title: Managing Director
Page 32 of 34 Pages
<PAGE> 33
CUSIP NO. 14712P104
EXHIBIT "I"
NOTICE OF EXERCISE
(To be executed by Holder to exercise the
Warrant in whole or in part)
Casa Ole Restaurants, Inc.
1135 Edgebrook
Houston, Texas 77034-1899
Re: Warrant to Purchase Common Stock dated __________ ___, 1996 by
and between Larry N. Forehand and Tex- Mex Partners, L.C. (the
"Warrant")
Dear Sir or Madam:
The undersigned holder irrevocably elects to exercise the Warrant of
Larry N. Forehand to purchase ___________ shares of Common Stock of Casa Ole
Restaurants, Inc. (the "Company") subject to the Warrant, and hereby makes
payment of the amount of $________________ in the manner described below,
representing the Exercise Price per share of Common Stock multiplied by the
number of shares of Common Stock to be purchased pursuant to this exercise.
By:
--------------------------------
$___________________ cash
$___________________ certified or bank cashier's check
$___________________ wire transfer
The undersigned requests that certificates for such shares of Common
Stock be issued as follows:
Name:
----------------------------------------
Address:
------------------------------------
------------------------------------
Page 33 of 34 Pages
<PAGE> 34
CUSIP NO. 14712P104
and if the exercise shall not be for all of the shares of Common Stock
evidenced by the Warrant, that a new warrant for the balance of the shares and
upon the same terms and conditions be registered in the name of, and delivered
to, the undersigned at Holder's address as set forth below:
----------------------------------------
----------------------------------------
By:
-------------------------------------------
Date:
-----------------------------------------
Page 34 of 34 Pages
