Exhibit
      10.29









MEXICAN
      RESTAURANTS, INC.


1135
      Edgebrook


Houston,
      Texas 77034-1899





Dated:
      March 29,
      2007








Bank
      of
      America, N.A.


(successor
      by merger to Fleet National Bank)


100
      Federal Street


Boston,
      Massachusetts 02110





Re:
            Amendment
                No. 3 to Amended and Restated Revolving
                Credit


and
      Term Loan Agreement





Ladies
      and Gentlemen:





We
      refer
      to the Amended and Restated Revolving Credit and Term Loan Agreement (as
      amended, the “Loan Agreement”), dated as of January 7, 2004, between Mexican
      Restaurants, Inc. (the “Borrower”) and Bank of America, N.A. (successor by
      merger to Fleet National Bank) (the “Lender”). All of the words and expressions
      used in this letter of agreement (this “Amendment No. 3”) which are not defined
      herein, but which are defined in the Loan Agreement, shall have the same
      meanings herein as specified therefor in the Loan Agreement.





We
      have
      requested that you make certain amendments to the Loan Agreement and you have
      advised us that you are prepared and would be pleased to make the amendments
      requested by us, but only on the condition that we join with you in this letter
      of agreement.





Accordingly,
      in consideration of the premises and the promises, mutual covenants and
      agreements contained in this Amendment No. 3, and fully intending to be legally
      bound by this Amendment No. 3, we hereby agree with you as
      follows:


- -
 1706662





ARTICLE
      I





AMENDMENTS
      TO LOAN AGREEMENT





Effective
      as of December 31, 2006 (herein the “Modification Date”), the Loan Agreement is
      amended as follows:





(a)  Each
      reference in any Loan Document to the Loan Agreement shall be deemed to include
      this Amendment No. 3, and this Amendment No. 3 shall be deemed to be a Loan
      Document for all purposes under the Loan Agreement.





(b)  Section
      1.18 of the Loan Agreement is deleted in its entirety and the following is
      substituted in lieu thereof:





“1.18 ***“Consolidated
      Cash Flow”*** means,
      in relation to the Borrower Affiliated Group on a Consolidated basis for any
      period, Consolidated EBITDAR for such period minus (a) cash
      Taxes paid during such period, minus (b)
      Consolidated Maintenance Capital Expenditures during such period, and plus **** (c)
      the
      aggregate amount of any Restricted Payments made pursuant to Section 5.9 in
      connection with ***vest
      options purchased*** directly
      from the Company's former Chief Executive Officer, Curt Glowacki, in the fourth
      quarter of fiscal year 2006.





(c)  The
      definition of “Revolving Credit Maturity Date” contained in Section 1.65 of the
      Loan Agreement, and the fifth paragraph of the Revolving Credit Note, are each
      amended: (i) by deleting the reference therein to the date “January 7, 2009”;
      and (ii) by inserting in its place the following: “December 31,
      2011”.





(d)  Section
      1.66 of the Loan Agreement is deleted in its entirety and the following is
      substituted in lieu thereof:





“1.66  ***“Revolving
      Credit Maximum Amount”*** means
      Seven Million Five Hundred Thousand Dollars ($7,500,000.00).”





(e)  Section
      1.68 of the Loan Agreement is deleted in its entirety and the following is
      substituted in lieu thereof:





“1.68 ***“Revolving
      Loan Commitment”*** **** means,
      subject to the limitations set forth in this Agreement, Seven Million Five
      Hundred Thousand Dollars ($7,500,000.00).”





(f)  Notwithstanding
      anything to the contrary contained in the Loan Agreement or any other Loan
      Document (including, without limitation, Section 2.2 of the Loan Agreement
      and the Term Note), the Term Loan and the Term Loan Commitment are each hereby
      terminated and all amounts advanced under the Term Loan are hereby deemed to
      be
      advances under the Revolving Loan.





(g)  The
      table
      set forth in Section 2.6 of the Loan Agreement is amended to read in its
      entirety as follows:





Table
                1
              Applicable
                Interest Rate MarginsLevel
            Rent
                Adjusted Leverage
            Applicable
                Prime Rate Margin
            Applicable
                LIBOR MarginI
            x<4.25x
            0.00%
            2.00%II
            4.25x<x<4.50x
            0.50%
            2.50%III
            x>4.50x
            1.00%
            3.00%





(h)  Clause
      (iii) of Section 5.9 of the Loan Agreement is amended: (i) by deleting the
      reference to “$2,000,000” contained therein; and (ii) by inserting in its place
      the following: “$2,700,000”.





(i)  Section
      5.16 of the Loan Agreement is deleted in its entirety and the following is
      substituted in lieu hereof:





“5.16  Financial
      Covenants .





5.16(a)  *Maximum
      Rent Adjusted Consolidated Leverage Ratio.* The
      Borrower shall not permit the ratio of (a) Consolidated Funded Indebtedness plus an
      amount equal to rental expense (including all, if any, percentage rent and
      other
      monetary obligations under each real property Lease to which any member of
      the
      Borrower Affiliated Group is a party) multiplied by 8 to (b) Consolidated
      EBITDAR to exceed 4.75 to 1.00 as of the last day of each fiscal quarter (as
      determined at the end of each such fiscal quarter for the four consecutive
      fiscal quarters then ending).





5.16(b)  *Minimum
      Consolidated Cash Flow Coverage.* The
      Borrower shall not permit the ratio of (a) Consolidated Cash Flow to (b)
      Consolidated Financial Obligations plus rental
      expense (including all, if any, percentage rent and other monetary obligations
      under each real property Lease to which any member of the Borrower Affiliated
      Group is a party) to be less than 1.25 to 1.0 as at the end of any fiscal
      quarter (as determined at the end of each such fiscal quarter for the four
      consecutive fiscal quarters then ending).





5.16(c)  *Maximum
      Consolidated Capital Expenditures.* The
      Borrower shall not permit the amount of Consolidated Capital Expenditures in
      any
      period to exceed the amount specified opposite such period in the table set
      forth below; provided , however ,
      that
      with respect to the maximum amounts reflected in the table set forth below,
      in
      any given fiscal year up to 25% of the unused portion of such amount may be
      carried over to the next fiscal year.





**Period**
            **Maximum
                Amount**Fiscal
                Year 2006
            $
                6,000,000Fiscal
                Year 2007
            $
                5,600,000Fiscal
                Year 2008
            $
                7,000,000Fiscal
                Year 2009
            $
                8,750,000Fiscal
                Year 2010
            $10,500,000Fiscal
                Year 2011
            $12,500,000”





(j)  The
      Amended and Restated Revolving Credit Note is amended: (i) by deleting
      references to “$5,000,000.00” and “FIVE MILLION and 00/100 Dollars
      ($5,000,000.00)”, as applicable; (ii) by inserting in its place the following:
“$7,500,000.00” and “SEVEN MILLION FIVE HUNDRED THOUSAND and 00/100 Dollars
      ($7,500,000.00)”, respectively; and (iii) by extending the maturity date thereof
      to December 31, 2011.





ARTICLE
      II





REPRESENTATIONS
      AND WARRANTIES





The
      Borrower hereby represents and warrants to the Lender as follows:





(a)  Representations
      in Loan Documents .
      Each of
      the representations and warranties made by or on behalf of the Borrower or
      any
      other member of the Borrower Affiliated Group to you in any of the Loan
      Documents, as amended by this Amendment No. 3, was true and correct when made,
      was true and correct on and as of the Modification Date and is true and correct
      on and as of the date hereof (except to the extent that such representations
      and
      warranties relate expressly to an earlier date) with the same full force and
      effect as if each of such representations and warranties had been made by the
      Borrower or such other member of the Borrower Affiliated Group on the date
      hereof and in this Amendment No. 3.





(b)  Defaults .
      No
      Default or Event of Default exists on the date hereof.





(c)  Binding
      Effect of Documents .
      This
      Amendment No. 3 has been duly executed and delivered to you by the Borrower
      and
      is in full force and effect as of the date hereof, and the agreements and
      obligations of the Borrower contained herein constitute the legal, valid and
      binding obligations of the Borrower, enforceable against the Borrower in
      accordance with its terms.





ARTICLE
      III





PROVISIONS
      OF GENERAL APPLICATION





(a)  No
      Other Changes .
      Except
      as otherwise expressly provided by this Amendment No. 3, all of the terms,
      conditions and provisions of the Loan Agreement and the other Loan Documents
      remain unaltered. The Loan Agreement and this Amendment No. 3 shall be read
      and
      construed as one agreement. The making of the amendments in this Amendment
      No. 3
      does not imply any obligation or agreement by the Lender to make any other
      amendment, waiver, modification or consent as to any matter on any subsequent
      occasion.





(b)  Governing
      Law .
      This
      Amendment No. 3 is intended to take effect as a sealed instrument and shall
      be deemed to be a contract under the laws of the Commonwealth of Massachusetts.
      This Amendment No. 3 and the rights and obligations of each of the parties
      hereto are contracts under the laws of the Commonwealth of Massachusetts and
      shall for all purposes be construed in accordance with and governed by the
      laws
      of such Commonwealth (without regard to conflicts of law rules).





(c)  Binding
      Effect; Assignment .
      This
      Amendment No. 3 shall be binding upon and inure to the benefit of each of the
      parties hereto and their respective successors and assigns.





(d)  Counterparts .
      This
      Amendment No. 3 may be executed in any number of counterparts, but all such
      counterparts shall together constitute but one and the same agreement. In making
      proof of this Amendment No. 3, it shall not be necessary to produce or account
      for more than one counterpart hereof signed by each of the parties
      hereto.





(e)  Conflict
      with Other Agreements .
      If any
      of the terms of this Amendment No. 3 shall conflict in any respect with any
      of the terms of any of the Loan Documents, the terms of this Amendment No.
      3
      shall be controlling.





(f)  Conditions
      Precedent .
      The
      obligation of the Lender to make the foregoing amendments to the Loan Agreement
      is subject to (i) the Lender having received an executed original counterpart
      of
      this Amendment No. 3, duly executed and delivered by the Borrower, and (ii)
      the
      Lender having signed this Amendment No. 3.





If
      you
      are in agreement with the foregoing, please sign below and deliver a signed
      counterpart hereof to the undersigned, whereupon this Amendment No. 3, as so
      accepted by you, shall become a binding agreement among you and the
      undersigned.








Very
      truly
      yours,





MEXICAN
      RESTAURANTS,
      INC.








By:_____________________


Name:


Title:


On
      behalf of, and in
      his capacity as


Vice
      President of,
      the Borrower and each


other
      member of the
      Borrower Affiliated Group





ACCEPTED
      AND AGREED:





BANK
      OF
      AMERICA, N.A.


(successor
      by merger to Fleet National Bank)











By:________________________


Name:


Title: