UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): June 29, 2007
MEXICAN
RESTAURANTS, INC.
(Exact
name of registrant as specified in its charter)
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Texas
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000-28234
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76-0493269
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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1135
EDGEBROOK, HOUSTON, TEXAS 77034-1899
(Address
of principal executive
offices) (Zip
Code)
(Registrant's
telephone number, including area code): (713)
943-7574
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Registrant under any of the following
provisions:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Entry
into a Material Definitive
Agreement.
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On
June 29, 2007 Mexican Restaurants,
Inc. (the “Company”) entered into a Credit Agreement (the “Wells Fargo
Agreement”) with Wells Fargo Bank, N.A. (“Wells Fargo”) in order to increase the
revolving loan amount available to the Company. In connection with
the execution of the Wells Fargo Agreement, the Company prepaid and terminated
its existing Amended and Restated Revolving Credit and Term Loan Agreement
between the Company and Bank of America, successor to Fleet National
Bank. The Wells Fargo Agreement provides for a revolving loan of up
to $10 million with an option to increase the revolving loan by an additional
$5
million for a total of $15 million. The Wells Fargo Agreement
terminates on June 29, 2010. At the Company’s option, the revolving
loan bears an interest rate equal to either the Wells Fargo’s Base Rate plus a
stipulated percentage or LIBOR plus a stipulated percentage. The
Company is subject to a non-use fee of 0.50% on the unused portion of the
revolver from the date of the Wells Fargo Agreement. The Company has
pledged the stock of its subsidiaries, its leasehold interests, its patents
and
trademarks and its furniture, fixtures and equipment as collateral for its
credit facility with Wells Fargo Bank, N.A. The Wells Fargo Agreement
requires the Company to maintain certain minimum EBITDA levels, leverage ratios
and fixed charge coverage ratios.
The
foregoing description of the Wells
Fargo Agreement does not purport to be complete and is qualified in its entirety
by the provisions of the Wells Fargo Agreement, which is filed as an exhibit
to
this Form 8-K. The information reported under Item 1.02 and 2.03 with
respect to the Wells Fargo Agreement and the Amended and Restated Revolving
Credit and Term Loan Agreement is incorporated into this Item 1.01 by
reference.
Item
1.02. Termination
of a Material Definitive Agreement.
On
June 29, 2007, with certain of the
proceeds the Company obtained under the Wells Fargo Agreement, the Company
prepaid and terminated its existing Amended and Restated Revolving Credit and
Term Loan Agreement with Bank of America, successor to Fleet National Bank,
without incurring material termination penalties. The Amended and
Restated Revolving Credit and Term Loan Agreement provided for a revolving
loan
of up to $7.5 million. As of June 29, 2007 under the Bank of America
loan, the Company had outstanding loans with an aggregate principal amount
of
approximately $6.1 million. The interest rate was either the prime
rate or LIBOR plus a stipulated percentage. The Company was subject
to a non-use fee of 0.75% on the unused portion of the revolver from the date
of
the credit agreement. The Company had pledged the stock of its
subsidiaries, its leasehold interests, its patents and trademarks and its
furniture, fixtures and equipment as collateral for its credit facility with
Bank of America. The Amended and Restated Revolving Credit and Term
Loan Agreement with Bank of America required the Company to maintain certain
minimum EBITDA levels, leverage ratios and fixed charge coverage
ratios. The information reported under Items 1.01 and 2.03 with
respect to the Wells Fargo Agreement and the Amended and Restated Revolving
Credit and Term Loan Agreement is incorporated into this Item 1.02 by
reference.
Item
2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
On
June 29, 2007 the Company incurred
an aggregate principal amount of approximately $6.8 million of indebtedness
for
a revolving loan under the Wells Fargo Agreement. Such indebtedness
was used to prepay all amounts outstanding and currently owed to Bank of America
under the Amended and Restated Revolving Credit and Term Loan Agreement and
one
seller note issued to the Company’s former franchisee in January 2004 ($500,000
plus accrued interest). The information reported under Item 1.01 and
1.02 with respect to the Wells Fargo Agreement and the Amended and Restated
Revolving Credit and Term Loan Agreement is incorporated into this Item 2.03
by
reference.
Item
9.01. Financial
Statements and Exhibits.
(c) Exhibits.
The
following is filed as Exhibit 10.1 to this Current Report on Form
8-K:
10.1 Credit
Agreement dated as of June 29, 2007 among Mexican Restaurants, Inc. and Wells
Fargo Bank, N.A.
SIGNATURES
Pursuant
to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to
be signed on its behalf by the undersigned hereunto duly
authorized.
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MEXICAN
RESTAURANTS, INC.
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Date: July
6, 2007
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By: /s/
Andrew J. Dennard
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Name: Andrew
J. Dennard
Title: Executive
Vice President, Chief Financial
Officer,
Treasurer and Corporate Secretary
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INDEX
TO
EXHIBITS
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Exhibit
No.
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Description
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10.1
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Credit
Agreement dated as of June 29, 2007 among Mexican Restaurants, Inc.
and
Wells Fargo Bank, N.A.
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