SECOND LOAN MODIFICATION AGREEMENT
                       ----------------------------------



DATE:                      As of          January 10     ,  1997
                                  ---------------------

PARTIES:                   NATIONAL BANK OF ARIZONA
                           3101 North Central Avenue
                           Post office Box 80440
                           Phoenix, Arizona 85060-0440                 [ "Bank"]


                           POORE BROTHERS, INC.
                           2664 South Litchfield Road
                           Goodyear, Arizona 85338                 [ "Borrower"]


RECITALS:

         A. Borrower executed a Promissory Note dated September 11, 1996, in the
original  principal  sum of  $2,400,000.00,  payable  to the  order of Bank (the
"Note").

         B. In connection with Borrower' s executing the Note, Borrower and Bank
entered into the Loan  Agreement,  with an effective  date of September 11, 1996
(the "Loan Agreement").

         C. The Note is secured by, among others, the following  documents,  all
of which documents securing the Note are hereinafter referred to collectively as
the "Security Documents:"

         Deed of  Trust,  Security  Agreement  and  Financing  Statement,  dated
         September  11, 1996,  recorded  September  13, 1996 an  Instrument  No.
         96-0650008, official records of Maricopa County, Arizona.

         Assignment of Permits,  Licenses,  Approvals,  Deposits,  Contracts and
         Documents, dated September 11, 1996.

         Specific Assignment of Development Agreement, dated September 11, 1996.

         UCC-1 Financing Statement, dated September 11, 1996, recorded September
         13, 1996, as Instrument No.  96-0650009,  official  records of Maricopa
         County, Arizona.

         UCC-1 Financing  Statement,  dated September 11, 1996,  filed September
         18, 1996, in File No. 935579, Arizona Secretary of State:

         D. At Borrower's  request,  the Bank and Borrower entered into the Loan
Modification Agreement dated December 23, 1996 (the "First Modification").
                                        1
<PAGE>
         E.  Borrower has  requested  that the Bank  further  modify the Note to
again  adjust  the  interest  rate and apply  the  proceeds  of the  Bank-issued
certificate of deposit in the amount of $1,250,000.00  currently held by Bank as
additional  collateral to permanently  reduce the outstanding  principal balance
and maximum  amount of the Note and  establish an account from which funds shall
be disbursed to pay for the cost of the  Improvements  prior to the disbursement
of any additional proceeds of the Loan. Bank has agreed to do the foregoing, but
only on the terms and subject to the conditions set forth hereinafter.

         NOW,  THEREFORE,  in  consideration  of the mutual  promises  contained
herein, the parties agree as follows:

AGREEMENTS:
-----------

         1. Accuracy of Recitals.  Borrower hereby  acknowledges the accuracy of
the Recitals of this Agreement.

         2.  Balance  Due;  Reduction  of Loan Amount to be  Advanced.  Borrower
acknowledges  and  agrees  that the  current  principal  balance  of the Note is
$1,248,117.42,  and that  interest  under the Note has been paid to  December 1,
1996 . Anything in the Note, the Loan Agreement or the Security Documents to the
contrary  notwithstanding,  the maximum principal amount Bank shall be obligated
to  advance  to  Borrower  shall be limited  to  $1,150,000.00  rather  than the
$2,400,000.00  amount previously  provided for, and the Note, the Loan Agreement
and the Security Documents are hereby amended accordingly.

         3.  Amendment to Note.  As of the date of this  Agreement,  the Note is
hereby  amended as follows:  Any reference in the Note to the  Principal  Amount
shall refer to $1,150,000.00 and not $2,400,000.00.  The fifth (5th) sentence of
the "VARIABLE  INTEREST  RATE"  paragraph on the first page of the Note shall be
revised in its entirety to read as follows:

         "The interest rate to be applied to the unpaid  principal  balance will
         be at a rate two (2.00) percentage points over the Index."

The second (2nd) sentence of the "LENDER'S  RIGHTS" paragraph on the second page
of the Note shall be revised in its entirety as follows:

         "Upon default,  including failure to pay upon final maturity, Lender at
         its option,  may also increase the variable  interest rate on this Note
         to six (6.00) percentage points over the Index."

         4. Amendment to Loan Agreement.  As of the date of this Agreement,  the
Loan Agreement is hereby amended as follows: The fifth sentence of the "VARIABLE
INTEREST RATE" paragraph on page 4 of the Loan Agreement shall be revised in its
entirety to read as follows:

         "The interest rate to be applied to the unpaid  principal  balance will
         be at a rate two (2.00) percentage points over the Index."
                                        2
<PAGE>
The  Loan  Agreement  is  hereby  modified  so that  any  reference  in the Loan
Agreement to the Loan Amount shall refer to $1,150,000.00 and not $2,400,000.00.

         5. Application of Proceeds of Certificate of Deposit. Contemporaneously
with  the  execution  of this  Agreement  and as a  condition  precedent  to its
effectiveness,  Borrower  shall  authorize  Bank to  liquidate  the  Bank-issued
certificate  of  deposit  in  the  amount  of   $1,250,000.00   (account  number
0005004270-1)  (the "CD") currently held by Bank as additional  collateral.  The
Bank shall use the  proceeds  of the CD to: (i)  reduce  the  current  principal
balance  of the  Note to zero;  and (ii)  with  the  balance  of such  proceeds,
establish  a  Bank-controlled   interest  bearing  bank  account  (the  "Reserve
Account").  All  interest  accruing in the Reserve  Account  shall accrue to the
Borrower's  benefit and be added to the Reserve Account.  So long as Borrower is
not in default, the Reserve Account, rather than the proceeds of the Loan, shall
be used to fund  Advances  until the Reserve  Account has been  reduced to zero.
Thereafter,  proceeds of the Loan shall be used to fund  advances but only up to
the maximum  amount of  $1,150,000.00.  This  Agreement  shall not be  effective
unless and until the  foregoing  application  of  proceeds  of the CD shall have
occurred.

         6. Continuation of Liens and Security Interests.  Borrower acknowledges
and agrees  that the  Security  Documents  shall  continue to secure the Note as
amended herein. No payment or discharge of the lien of the Security Documents is
intended by this Agreement and such liens and security  interests shall continue
in full force unimpaired from the date of their recording or filing.

         7.  Representations.  The Borrower  represents,  warrants and reaffirms
that:

                (a) Borrower has no defense, setoff or counterclaim against Bank
in regard to any of Borrower's obligations under the Note as modified herein.

                (b) The Note, the Loan Agreement and the Security Documents,  as
modified  herein,  is valid and binding  upon  Borrower and are  enforceable  in
accordance with their terms.

                (c) The Security Documents secure the Note as modified herein.

                (d)  No  default  or  event  of  default  has  occurred  and  is
continuing under the Note or the Loan Agreement and no event has occurred which,
with the giving of notice or the passage of time, or both, would constitute such
a default or event of default.

                (e) All  representations  and warranties made by the Borrower in
the Note as  amended  and in the Loan  Agreement  as  amended  and the  Security
Documents  continue  to  be  true  and  correct  and  are  hereby  restated  and
reaffirmed.

                (f) Any financial  statements  and other  financial  information
submitted  to Bank with respect to the Borrower in order to induce Bank to enter
into this Agreement are true, correct and complete.
                                        3
<PAGE>
                (g) The Claims  referred to in  paragraph 8 hereof,  if any such
Claims  exist,  are owed  by the persons  granting the releases made therein and
they have not previously been assigned in whole or in part.

         8. Release of Claims. Borrower hereby releases Bank and its affiliates,
subsidiaries,  shareholders,  directors,  officers,  employees and agents of and
from all claims, complaints, demands, causes of action,damages, costs, expenses,
fees,  debts,  liabilities or  obligations  of every kind,  whether in law or in
equity, direct or indirect,  fixed or contingent,  known or unknown,  whether or
not liquidated,  and whether arising heretofore or hereafter,  out of, by reason
of, or  related  in any way to,  any act or  omission  of Bank prior to the date
hereof with respect to the Loan evidenced by the Note as amended herein, or with
respect to the negotiation, execution, performance or enforcement of the Note as
amended herein and the Loan Agreement and the Security Documents  (collectively,
the "Claims").  The Borrower acknowledges and understands that a general release
may not, in some  jurisdictions,  extend to claims that the party  granting  the
release  does not know or suspect to exist in his favor at the time of executing
the release and which, if known by such party, may have materially  affected his
determination  to give a release.  The Borrower waives the provisions of any law
that purports to limit the foregoing release.

         9. Entire Agreement.  This Agreement contains the entire  understanding
of the parties with respect to the subject  matter hereof and may not be altered
or amended in any respect except in a writing signed by the party to be charged.

         10. No Waiver.  This Agreement shall not constitute a waiver by Bank of
any default  by Borrower  under the Note,  the Loan  Agreement  or the  Security
Documents.

         11. Continuing Effectiveness.  Except as modified herein, the Note, the
Security Documents and the Loan Agreement shall remain in full force and effect.

         12. Binding  Effect.  This  Agreement  applies to, is binding upon, and
inures to the  benefit  of,  the  parties  hereto  and their  respective  heirs,
personal representatives, successors and assigns.

         13.  Further  Assurances.  The parties shall execute,  acknowledge  and
deliver any other documents or agreements an may reasonably be required in order
to evidence or give effect to the  provisions  of this  Agreement or to evidence
the  continuing  effectiveness  and  perfection  of the  lien  and the  security
interests  created by the Security  Documents,  and/or any document  executed in
connection with this Agreement.

         14. Captions. Captions are for reference purposes only and shall not be
used to construe this Agreement.

         15. Mutual  Drafting.  This Agreement has been drafted  mutually by the
parties and shall be interpreted neither for nor against any party.

         16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona.
                                        4
<PAGE>
         17. Arbitration Disclosures.

                a.  ARBITRATION  IS USUALLY FINAL AND BINDING ON THE PARTIES AND
SUBJECT TO ONLY VERY LIMITED REVIEW BY A COURT.

                b. THE  PARTIES  ARE  WAIVING  THEIR RIGHT TO LITIGATE IN COURT,
INCLUDING THEIR RIGHT TO A JURY TRIAL.

                c.  PRE-ARBITRATION  DISCOVERY  IS  GENERALLY  MORE  LIMITED AND
DIFFERENT FROM COURT PROCEEDINGS.

                d.  ARBITRATORS'  AWARDS ARE NOT  REQUIRED  TO  INCLUDE  FACTUAL
FINDINGS  OR  LEGAL  REASONING  AND  ANY  PARTY'S  RIGHT  TO  APPEAL  OR TO SEEK
MODIFICATION OF RULINGS BY ARBITRATORS IS STRICTLY LIMITED.

                e. A PANEL OF ARBITRATORS  MIGHT INCLUDE AN ARBITRATOR WHO IS OR
WAS AFFILIATED WITH THE BANKING INDUSTRY.

         18. Arbitration Provisions. The Borrower hereby agrees an follows:

                a. Any  controversy  or claim  between  or  among  the  parties,
including but not limited to those arising out of or relating to the Loan,  this
Agreement or any  agreements  or  instruments  relating to the Loan or hereto or
delivered in connection with the Loan or herewith, and including but not limited
to a claim based on or arising from an alleged tort, shall at the request of any
party  be  determined  by  arbitration  in  accordance   with  the    Commercial
Arbitration  Rules of the  American  Arbitration  Association.  The  arbitration
proceedings shall be conducted in Phoenix, Arizona. The arbitrator(s) shall have
the  qualifications  set forth in  subparagraph  (c)  hereto.  All  statutes  of
limitations  which would otherwise be applicable in a judicial action brought by
a party shall apply to any arbitration or reference proceeding hereunder.

                b.  In any  judicial  action  or  proceeding  arising  out of or
relating to the Loan,  this Agreement or any agreements or instruments  relating
to the Loan or hereto or  delivered  in  connection  with the Loan or  herewith,
including  but not limited to a claim based on or arising from an alleged  tort,
if the  controversy  or claim is not  submitted to  arbitration  as provided and
limited in  subparagraph  (a)  hereto,  all  decisions  of fact and law shall be
determined  by a reference in  accordance  with Rule 53 of the Federal  Rules of
Civil  Procedure  or Rule 53 of the Arizona  Rules of Civil  Procedure  or other
comparable,  applicable reference procedure.  The parties shall designate to the
court the  referee(s)  selected  under the auspices of the American  Arbitration
Association  in the same  manner as  arbitrators  are  selected  in  Association
sponsored arbitration proceedings.  The referee(s) shall have the qualifications
set forth in subparagraph (c ) hereto.

                c.  The   arbitrator(s)  or  referees(s) shall  be  selected  in
accordance  with the rules of the American Arbitration  Association  from panels
maintained  by  the  Association.  A  single  arbitrator  or  referee  shall  be
knowledgeable in the subject matter of the dispute.  Where three  arbitrators or
referees  conduct an  arbitration  or reference  proceeding,  the claim shall be
decided by a majority vote
                                        5
<PAGE>
of the three arbitrators or referees, at least one of whom must be knowledgeable
in the  subject  matter  of the  dispute  and at  least  one of  whom  must be a
practicing  attorney.  The  arbitrator(s) or referee(s)  shall award recovery of
all costs and fees (including attorneys' fees, administrative fees, arbitrator's
fees,  and  court  costs).  The  arbitrator(s)  or  referee(s)  also  may  grant
provisional  or  ancillary  remedies  such as, for example,  injunctive  relief,
attachment,  or the appointment of a receiver, either during the pendency of the
arbitration or reference  proceeding or as part of the  arbitration or reference
award.

                d.  Judgment  upon an  arbitration  or  reference  award  may be
entered in any court having jurisdiction,  subject to the following  limitation:
the  arbitration  or  reference  award is binding  upon the parties  only if the
amount  does not  exceed  Four  Million  Dollars  ($4,000,000.00);  if the award
exceeds that limit,  either party may commence legal action for a court trial de
novo. Such legal action must be filed within thirty (30) days following the date
of the arbitration or reference  award; if such legal action is not filed within
that time period,  the amount of the  arbitration  or  reference  award shall be
binding.  The  computation  of the total amount of an  arbitration  or reference
award shall include  amounts  awarded for  arbitration  fees,  attorneys'  fees,
interest and all other related costs.

                e. At the Bank's  option,  foreclosure  under a deed of trust or
mortgage  may be  accomplished  either by  exercise of a power of sale under the
deed of trust or  mortgage  or by  judicial  foreclosure.  The  institution  and
maintenance  of an action for  judicial  relief or pursuit of a  provisional  or
ancillary  remedy  shall not  constitute  a waiver  of the  right of any  party,
including the  plaintiff,  to submit the  controversy or claim to arbitration if
any other party contests such action for judicial relief.

                f.  Notwithstanding  the applicability of other law to any other
provision of this Agreement,  the Federal  Arbitration  Act, 9 U.S.C. 1 et seq.,
shall  apply  to  the  construction  and   interpretation  of  this  arbitration
paragraph.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
date first above written.


                                  NATIONAL BANK OF ARIZONA

                                  By: /s/ Keith Maio
                                      -----------------------------

                                       Its: Sr. Vice President
                                            -----------------------

                                                             ["Bank"]

                                  POORE BROTHERS, INC., a Delaware corporation


                                  By: /s/ Jeffrey H. Strasberg
                                      -----------------------------
                                       Jeffrey H. Strasberg

                                       Its: Secretary/CFO
                                            -----------------------

                                                        ["Borrower"]
                                        6