AGREEMENT AND AMENDMENT NO. 3 TO CREDIT AGREEMENT

Exhibit 10.1

AGREEMENT AND AMENDMENT NO. 3 TO CREDIT AGREEMENT

THIS AGREEMENT AND AMENDMENT NO. 3 TO CREDIT AGREEMENT (this “ Amendment ”) is made as of June 28, 2009, by and between MEXICAN RESTAURANTS, INC., a Texas corporation (the “ Borrower ”), and WELLS FARGO BANK, N.A., a national banking association (the “ Lender ”).

WHEREAS, the Borrower and the Lender are parties to a certain Credit Agreement, dated as of June 29, 2007, as amended (the “ Credit Agreement ”); terms used herein and not otherwise defined are used herein as defined in the Credit Agreement; and

WHEREAS, the Borrower has requested that the Lender amend Sections 1.1, 4.2 and 7.1(c) of the Credit Agreement;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.            Amendments to Credit Agreement .

1.1           The defined term “Maturity Date” set forth in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

1.2           The Applicable Margin table set forth in the definition of “Applicable Margin” in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

1.3          Section 4.2 of the Credit Agreement is hereby amended to (i) delete “and” at the end of Section 4.2(e); (ii)