<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 5 herein.
(Continued on following pages)
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CUSIP NO. 14712P104
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<TABLE>
<S> <C> <C>
1 Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons (entities only)
Louis P. Neeb
--------------------------
- ---------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(See Instructions)
(a) [ ]
(b) [X]
- ---------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- ---------------------------------------------------------------------------------------------------------------------
4 Source of Funds (See Instructions)
PF
- ---------------------------------------------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States of America
- ---------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power
404,487 (See Items 4 and 5)
NUMBER OF ------------------------------------------------------------------------------------------
SHARES 8 Shared Voting Power
BENEFICIALLY
OWNED BY EACH 2,000 (See Items 4 and 5)
REPORTING ------------------------------------------------------------------------------------------
PERSON WITH 9 Sole Dispositive Power
404,487 (See Items 4 and 5)
------------------------------------------------------------------------------------------
10 Shared Dispositive Power
2,000
- ---------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
406,487 (See Items 4 and 5)
- ---------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
[ ]
- ---------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11
11.30% (See Items 4 and 5)
- ---------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions)
IN
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
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CUSIP NO. 14712P104
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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 Louis P. Neeb (the "Reporting
Person"). The Reporting Person's present principal occupation is Chairman of
the Board and Chief Executive Officer of Casa Ole Restaurants, Inc., an
operator and franchisor of Mexican-theme family dining restaurants, which has
its principal business address at 1135 Edgebrook, Houston, Texas 77034-1899.
The Reporting Person's present principal business address is 1135 Edgebrook,
Houston, Texas 77034-1899.
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.
The Reporting Person 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, 1998, 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 personal funds of the Reporting
Person, as 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, 1998, 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 personal funds 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."
Page 3 of 32 Pages
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CUSIP NO. 14712P104
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 ($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 personal funds of the
Reporting Person.
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
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 rights of the Reporting Person pursuant to the Warrants to
purchase additional Common Stock of the Company will become exercisable on
April 25, 1998, the second annual anniversary of the effective date of the
Initial Public Offering.
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 has plans to
purchase up to 17,000 additional shares of Common Stock of the Company on or
before March 13, 1998.
At the time of this Statement, the Reporting Person does not have any
plans or proposals that relate to or would result in (i) any acquisition of
additional securities of the Company other than as stated in the preceding
paragraph 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
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CUSIP NO. 14712P104
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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 record ownership, sole
voting power and sole dispositive power with respect to 28,000 shares of Common
Stock of the Company and record ownership, shared voting power and shared
dispositive power (as shared with his spouse) with respect to 2,000 shares of
Common Stock of the Company. The above referenced 30,000 shares of Common
Stock constitute .80% 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 additional shares of Common Stock of the
Company. As a result of the rights created by the Warrants, the Reporting
Person has beneficial ownership, shared voting power and shared dispositive
power (shared only as to 2,000 shares of the Company's Common Stock as shared
with his spouse) with respect to 406,487 shares of Common Stock, constituting
11.30% 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.
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.
ITEM 7. (MATERIAL TO BE FILED AS EXHIBITS)
<TABLE>
<S> <C>
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.
</TABLE>
Page 5 of 32 Pages
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CUSIP NO. 14712P104
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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
/s/ Louis P. Neeb
--------------------------
Louis P. Neeb
Page 6 of 32 Pages
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CUSIP NO. 14712P104
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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 7 of 32 Pages
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CUSIP NO. 14712P104
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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, LOUIS P. NEEB ("Neeb") 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, Neeb 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 Neeb;
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. Neeb or his 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, $.01 par value per share, of the
Company (the "Common Stock") at the Exercise Price per share set forth in
Paragraph 2(c) herein, and upon such purchase to receive a certificate or
certificates representing such shares of Common Stock. The number of shares of
Common Stock to be received upon the exercise of this Warrant may be adjusted
from time to time as hereinafter set forth.
2. Defined Terms. As used in this Warrant, the following
capitalized terms shall have the meanings respectively assigned to them below,
which meanings shall be applicable equally to the singular and plural forms of
the terms so defined.
Page 8 of 32 Pages
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CUSIP NO. 14712P104
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(a) "Business Day" shall mean any day except a Saturday,
Sunday or other day on which commercial banks in the State of Texas
are authorized or required by law to close.
(b) "Exercise Period" means the period commencing on the
second anniversary of the Initial Public Offering and terminating at
5:00 p.m., Houston, Texas time, on the tenth (10th) anniversary of the
Initial Public Offering or, in the event that the tenth anniversary of
the Initial Public Offering is not a Business Day, the Business Day
next following.
(c) "Exercise Price" shall mean the price at which shares
of Common Stock of this Company are offered to the public in the
Company's Initial Public Offering less the amount paid for the warrant
($.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 9 of 32 Pages
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CUSIP NO. 14712P104
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(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 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. 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.
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
Page 10 of 32 Pages
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CUSIP NO. 14712P104
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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 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
Page 11 of 32 Pages
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CUSIP NO. 14712P104
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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 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.
Page 12 of 32 Pages
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CUSIP NO. 14712P104
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(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) 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.
(d) 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
Page 13 of 32 Pages
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CUSIP NO. 14712P104
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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 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
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CUSIP NO. 14712P104
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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 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
Page 15 of 32 Pages
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CUSIP NO. 14712P104
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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.
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.
Page 16 of 32 Pages
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CUSIP NO. 14712P104
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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:
Louis P. Neeb
6914 Hillpark Drive
Dallas, Texas 75230
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
The terms and provisions of the Warrant are accepted and agreed to
this 26th day of February, 1996.
/s/ Louis P. Neeb
----------------------------------
Louis P. Neeb
Page 17 of 32 Pages
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CUSIP NO. 14712P104
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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 Louis P. Neeb (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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CUSIP NO. 14712P104
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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 19 of 32 Pages
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CUSIP NO. 14712P104
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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 20 of 32 Pages
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CUSIP NO. 14712P104
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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, LOUIS P. NEEB 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, LOUIS P. NEEB 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 LOUIS P. NEEB;
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. LOUIS P. NEEB or his 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 THOUSAND SIX HUNDRED TWO (196,602)
shares of common stock, $.01 par value per share, of CASA OLE RESTAURANTS,
INC., a Texas corporation (the "Company") (the "Common Stock"), at the Exercise
Price per share set forth in Paragraph 2(c) herein, and upon such purchase to
receive a certificate or certificates representing such shares of Common Stock.
The number of shares of Common Stock to be received upon the exercise of this
Warrant may be adjusted from time to time as hereinafter set forth.
2. Defined Terms. As used in this Warrant, the following
capitalized terms shall have the meanings respectively assigned to them below,
which meanings shall be applicable equally to the singular and plural forms of
the terms so defined.
Page 21 of 32 Pages
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CUSIP NO. 14712P104
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(a) "Business Day" shall mean any day except a Saturday,
Sunday or other day on which commercial banks in the State of Texas
are authorized or required by law to close.
(b) "Exercise Period" means the period commencing on the
second anniversary of the Initial Public Offering and terminating at
5:00 p.m., Houston, Texas time, on the tenth (10th) anniversary of the
Initial Public Offering or, in the event that the tenth anniversary of
the Initial Public Offering is not a Business Day, the Business Day
next following.
(c) "Exercise Price" shall mean the price at which shares
of Common Stock of this Company are offered to the public in the
Company's Initial Public Offering less the amount paid for the warrant
($.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 22 of 32 Pages
<PAGE> 23
CUSIP NO. 14712P104
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(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. 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 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
Page 23 of 32 Pages
<PAGE> 24
CUSIP NO. 14712P104
-------------------
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
shares for Holder shall include such qualification under applicable
blue sky or other state securities laws as may be requested by Holder.
Page 24 of 32 Pages
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CUSIP NO. 14712P104
-------------------
(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 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:
Page 25 of 32 Pages
<PAGE> 26
CUSIP NO. 14712P104
-------------------
"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) 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.
(d) 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 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,
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CUSIP NO. 14712P104
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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 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
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CUSIP NO. 14712P104
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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
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
Page 28 of 32 Pages
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CUSIP NO. 14712P104
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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:
Louis P. Neeb
6914 Hillpark Drive
Dallas, Texas 75230
IN WITNESS WHEREOF, this Warrant has been executed by LARRY N.
FOREHAND as of the date first above written.
GRANTOR:
/s/ Larry N. Forehand
----------------------------------
Larry N. Forehand
Page 29 of 32 Pages
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CUSIP NO. 14712P104
-------------------
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/ Stacy M. Riffe
---------------------------------------
Printed Name: Stacy M. Riffe
Title: Vice President
The terms and provisions of the Warrant are accepted and agreed to by
the undersigned this 26th day of February, 1996.
By: /s/ Louis P. Neeb
-------------------------------
Printed Name: Louis P. Neeb
Title: Individually
Page 30 of 32 Pages
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CUSIP NO. 14712P104
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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 Louis P. Neeb (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:
---------------------------------------------------
---------------------------------------------------
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CUSIP NO. 14712P104
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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 32 of 32 Pages
