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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Washington,
      D.C. 20549</strong></font></div>
    <div><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman;"><strong>FORM
      8-K</strong></font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>CURRENT
      REPORT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Pursuant
      to Section 13 or 15(d) of the Securities Exchange Act of
      1934</strong></font></div>
    <div><br></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Date
      of
      Report (Date of earliest event reported): June 29, 2007</font></div>
    <div><br></div>
    <div><br></div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><img src="mexrest.jpg" alt=""><br></div>
    <div><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>MEXICAN
      RESTAURANTS, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Exact
      name of registrant as specified in its charter)</font></div>
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            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>000-28234</strong></font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;"><strong>76-0493269</strong></font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(State
                or other jurisdiction</font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(Commission</font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">(IRS
                Employer</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">of
                incorporation)</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">File
                Number)</font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Identification
                No.)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>1135
      EDGEBROOK, HOUSTON, TEXAS 77034-1899</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Address
      of principal executive
      offices)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;(Zip
      Code)</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(Registrant's
      telephone number, including area code): <strong>(713)
      943-7574</strong></font></div>
    <div><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">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:</font></div>
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            </td>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425)</font></div>
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            </td>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)</font></div>
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            </td>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b))</font></div>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c))</font></div>
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              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong><a name="node2">Item
                1.01</a></strong></font></div>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Entry
                into a Material Definitive
                Agreement.</strong></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font id="TAB1" style="MARGIN-LEFT: 36pt;"></font>On
      June 29, 2007 Mexican Restaurants,
      Inc. (the &#8220;Company&#8221;) entered into a Credit Agreement (the &#8220;Wells Fargo
      Agreement&#8221;) with Wells Fargo Bank, N.A. (&#8220;Wells Fargo&#8221;) in order to increase the
      revolving loan amount available to the Company.&#160;&#160;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.&#160;&#160;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.&#160;&#160;The Wells Fargo Agreement
      terminates on June 29, 2010.&#160;&#160;At the Company&#8217;s option, the revolving
      loan bears an interest rate equal to either the Wells Fargo&#8217;s Base Rate plus a
      stipulated percentage or LIBOR plus a stipulated percentage.&#160;&#160;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.&#160;&#160;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.&#160;&#160;The Wells Fargo Agreement
      requires the Company to maintain certain minimum EBITDA levels, leverage ratios
      and fixed charge coverage ratios.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font id="TAB1" style="MARGIN-LEFT: 36pt;"></font>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.&#160;&#160;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.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
      1.02.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Termination
      of a Material Definitive Agreement.</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font id="TAB1" style="MARGIN-LEFT: 36pt;"></font>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.&#160;&#160;The Amended and
      Restated Revolving Credit and Term Loan Agreement provided for a revolving
      loan
      of up to $7.5 million.&#160;&#160;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.&#160;&#160;The interest rate was either the prime
      rate or LIBOR plus a stipulated percentage.&#160;&#160;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.&#160;&#160;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.&#160;&#160;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.&#160;&#160;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.</font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
      2.03&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
      Arrangement of a Registrant.</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font id="TAB1" style="MARGIN-LEFT: 36pt;"></font>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.&#160;&#160;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&#8217;s former franchisee in January 2004 ($500,000
      plus accrued interest).&#160;&#160;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.</font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>Item
      9.01.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial
      Statements and Exhibits.</strong></font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Exhibits.</font></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">The
      following is filed as Exhibit 10.1 to this Current Report on Form
      8-K:</font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font id="TAB1" style="MARGIN-LEFT: 36pt;"></font>10.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Credit
      Agreement dated as of June 29, 2007 among Mexican Restaurants, Inc. and Wells
      Fargo Bank, N.A.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><strong>SIGNATURES</strong></font></div>
    <div><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;"><font id="TAB1" style="MARGIN-LEFT: 36pt;"></font>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.</font></div>
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            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">MEXICAN
                RESTAURANTS, INC.</font></div>
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            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Date:&#160;&#160;July
                6, 2007</font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">By:&#160;&#160;&#160;&#160;&#160;&#160;&#160;/s/
                Andrew J. Dennard</font></div>
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            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;</font></td>
            <td align="left" valign="top" width="40%">
              <div>&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Name:&#160;&#160;Andrew
                J. Dennard</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">Title:&#160;&#160;&#160;&#160;Executive
                Vice President, Chief Financial</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Officer,
                Treasurer and Corporate Secretary</font></div>
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      TO
      EXHIBITS</font></div>
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                No.</font></div>
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                Agreement dated as of June 29, 2007 among Mexican Restaurants, Inc.
                and
                Wells Fargo Bank, N.A.</font></div>
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[{"type": "8-K", "sequence": "1", "filename": "form8-k.htm", "description": "MEXICAN RESTAURANTS, INC. FORM 8-K 6-29-07", "secsgml_size_bytes": 27688}]
{"company-data": {"conformed-name": "MEXICAN RESTAURANTS INC", "cik": "0001009244", "assigned-sic": "5812", "irs-number": "760493269", "state-of-incorporation": "TX", "fiscal-year-end": "1228"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-28234", "film-number": "07967208"}, "business-address": {"street1": "1135 EDGEBROOK", "city": "HOUSTON", "state": "TX", "zip": "77034", "phone": "7139437574"}, "mail-address": {"street1": "1135 EDGEBROOK", "city": "HOUSTON", "state": "TX", "zip": "77034"}, "former-company": {"former-conformed-name": "CASA OLE RESTAURANTS INC", "date-changed": "19960228"}}
form8-k.htm
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)
Texas
000-28234
76-0493269
(State
                or other jurisdiction
(Commission
(IRS
                Employer
of
                incorporation)
File
                Number)
Identification
                No.)
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:
[  ]
Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425)
[  ]
Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)
[  ]
Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b))
[  ]
Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c))
Item
                1.01
Entry
                into a Material Definitive
                Agreement.
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.
MEXICAN
                RESTAURANTS, INC.
Date:  July
                6, 2007
By:       /s/
                Andrew J. Dennard
Name:  Andrew
                J. Dennard
Title:    Executive
                Vice President, Chief Financial
Officer,
                Treasurer and Corporate Secretary
INDEX
      TO
      EXHIBITS
Exhibit
                No.
Description
10.1
Credit
                Agreement dated as of June 29, 2007 among Mexican Restaurants, Inc.
                and
                Wells Fargo Bank, N.A.