PIZZA INN INC /MO/
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>doc2.txt
<TEXT>

                     SECOND AMENDMENT TO THE SECOND AMENDED
                     --------------------------------------
             AND RESTATED LOAN AGREEMENT AND RELATED LOAN DOCUMENTS
             ------------------------------------------------------
     This SECOND AMENDMENT TO THE SECOND AMENDED AND RESTATED LOAN AGREEMENT AND
RELATED  LOAN  DOCUMENTS  (the  "AMENDMENT"),  dated as of January 31, 2002, but
                                 ---------
effective  as  of  December  23,  2001 (the "EFFECTIVE DATE"), is by and between
                                             --------------
PIZZA  INN,  INC.,  a  Missouri  corporation  ("BORROWER"), and WELLS FARGO BANK
                                                --------
TEXAS,  NATIONAL  ASSOCIATION,  a  national  banking  association  (successor by
consolidation  to  Wells Fargo Bank (Texas), National Association) (the "BANK").
                                                                         ----
                                    RECITALS:
    A. The  Borrower  and  the Bank entered into that certain Second Amended and
Restated  Loan  Agreement  dated as of March 31, 2000 (the "AMENDED AND RESTATED
                                                            --------------------
LOAN  AGREEMENT")  and,  pursuant to Article IV of the Amended and Restated Loan
  -------------
Agreement,  that  certain  Construction  Loan Agreement dated as of December 28,
2000, (the "CONSTRUCTION LOAN AGREEMENT"), together with a Promissory Note dated
            ---------------------------
December  28,  2000  in  the  principal  amount  of  Eight  Million  One Hundred
Twenty-Five  Thousand  and  no/100  Dollars  ($8,125,000.00)  (the "CONSTRUCTION
                                                                    ------------
NOTE")  and a Fixed Rate Agreement (the "FIXED RATE AGREEMENT") attached thereto
                                         --------------------
as Exhibit A.  The Construction Loan Agreement, Construction Note and Fixed Rate
   ---------
Agreement  are  hereinafter  referred  to  as the "CONSTRUCTION LOAN DOCUMENTS."
                                                   ---------------------------

    B. In connection with the Amended and Restated Loan Agreement, Barko Realty,
Inc.,  a Texas corporation, R-Check, Inc., a Texas corporation, and Pizza Inn of
Delaware,  Inc.,  a  Delaware  corporation  (collectively,  the  "GUARANTORS"),
                                                                  ----------
executed that certain Second Amended and Restated Guaranty dated as of March 31,
2000 in favor of the Bank (as the same may be amended, restated or modified from
time  to  time,  the  "GUARANTY").
                       --------

     C.     The  Borrower  and  the  Bank  amended the Amended and Restated Loan
Agreement  pursuant  to  that  certain  First  Amendment  to  Second Amended and
Restated  Loan  Agreement dated as of December 28, 2000 (the "FIRST AMENDMENT").
                                                              ---------------
The  Amended and Restated Loan Agreement, as amended by the First Amendment,  is
hereinafter  referred  to  as  the  "LOAN  AGREEMENT."
                                     ---------------

     D.     The Borrower and the Bank now desire to amend the Loan Agreement and
the  Construction  Loan  Documents  as  herein  set  forth.

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

                                 ARTICLE  I.
                                 -----------
                                 DEFINITIONS

Section 1.1    DEFINITIONS.
            -----------
        Capitalized  terms  used  in this Amendment, to the extent not otherwise
defined herein, shall have the same meanings as in the Loan Documents as amended
hereby.

                               ARTICLE  II.
                               ------------
                      AMENDMENTS  TO  LOAN  AGREEMENT

Section 2.1 DELETION  OF  DEFINITIONS.  Effective  as of the Effective Date, the
            -------------------------
following definitions in Section 1.1 of the Loan Agreement are hereby deleted in
     their  entirety:
          "ADJUSTED  EURODOLLAR  RATE"
           --------------------------
          "EURODOLLAR  RATE"
           ----------------
          "EURODOLLAR  RATE  MARGIN"
           ------------------------
          "RESERVE  REQUIREMENT"
          --------------------

Section 2.2 ADDITION  OF  DEFINITIONS.  Effective  as of the Effective Date, the
            -------------------------
following  definitions  shall  be inserted in their proper alphabetical order to
Section  1.1  of  the  Loan  Agreement:

     "BASE LIBOR" means, for any Eurodollar Advance for any Interest Period, the
      ----------
rate per annum for United States dollar deposits quoted by the Reference Bank as
the  Inter-Bank  Market Offered Rate on the date that is two Business Days prior
to  the  Interest Period, with the understanding that such rate is quoted by the
Reference  Bank  for  the purpose of calculating effective rates of interest for
loans  making  reference  thereto,  on  the  first day of an Interest Period for
delivery  of  funds on such date for a period of time approximately equal to the
number  of days in such Interest Period, and in an amount approximately equal to
the  principal  amount  to  which  such  Interest  Period  applies.  Borrower
understands  and  agrees  that  the Reference Bank may base its quotation of the
Inter-Bank  Market  Offered  Rate upon such offers or other market indicators of
the  Inter-Bank  Market  as  the  Reference  Bank, in its sole discretion, deems
appropriate  including,  without  limitation, the rate offered for United States
dollar  deposits  on  the  London  Inter-Bank  Market.

"LIBOR"  means, for any Eurodollar Advance for any Interest Period, the rate per
 -----
annum  determined  pursuant to the following formula:  (a) Base LIBOR applicable
to  such Eurodollar Advance for such Interest Period, divided by (b) one hundred
percent  (100%)  minus  the LIBOR Reserve Percentage for such Eurodollar Advance
for  such  Interest  Period.

"LIBOR  RATE  MARGIN" means, (a) with respect to the Term Loan, one and one-half
 -------------------
percent (1.50%) and (b) with respect to the Revolving Credit Loans, at such time
and  from  time  to  time  as  the  relevant  Funded Debt Ratio is in one of the
following  ranges,  the percentage per annum set forth opposite such Funded Debt
Ratio:
                                                      PERCENTAGE  FOR  REVOLVING
            FUNDED DEBT RATIO                                  CREDIT LOANS
            -----------------                                  ------------
            Less than 2.0 to 1.0                                      1.25%
            --------------------                                      -----
            2.0 to 1.0 or greater and less than 2.5 to 1.0            1.50%
                                                                      -----
            2.5 to 1.0 or greater and less than 3.0 to 1.0            1.75%
                                                                      -----
            3.0 to 1.0 or greater and less than 3.25 to 1.0           2.00%
                                                                      -----
            3.25 to 1.0 or greater                                    2.25%
            ----------------------                                    -----

The  Borrower shall give written notice to the Bank of any changes in the Funded
Debt  Ratio as of the end of any fiscal quarter which results in a change to the
LIBOR  Rate  Margin  concurrently  with its delivery of the items required under
Section  10.1(c)  hereof,  and  any  change  to  the  LIBOR Rate Margin shall be
effective  with  respect  to  any  Interest Period commencing after the Bank has
received  such  information.

     "LIBOR  RESERVE  PERCENTAGE"  means,  for  any  Eurodollar  Advance for any
      --------------------------
Interest  Period, the reserve percentage prescribed by the Board of Governors of
the Federal Reserve system (or any successor) for "Eurocurrency Liabilities" (as
defined  in  Regulation  D),  adjusted  by the Bank for expected changes in such
reserve  percentage  during  the  applicable  Interest  Period.

Section 2.3 REFERENCES TO DELETED DEFINITIONS.     Effective as of the Effective
            ---------------------------------
     Date:
(a)     All references to "Adjusted Eurodollar Rate" in the Loan Agreement shall
be  deemed  to  be  references  to  "LIBOR";
(b)     All  references  to  "Eurodollar  Rate"  in  the Loan Agreement shall be
deemed  to  be  references  to  "Base  LIBOR";
(c)     All  references  to "Eurodollar Rate Margin" in the Loan Agreement shall
be  deemed  to  be  references  to  "LIBOR  Rate  Margin";  and
(d)     All  references  to "Reserve Requirement" in the Loan Agreement shall be
deemed  to  be  references  to  "LIBOR  Reserve  Percentage."

Section 2.4    AMENDMENT  TO  DEFINITIONS.
                --------------------------
   Effective  as of the Effective Date, the following definitions in Section 1.1
of  the Loan Agreement are hereby amended and restated in their entirety to read
as  follows:
     "COMMITMENT  FEE  RATE"  means,  at such times and from time to time as the
      ---------------------
relevant Funded Debt Ratio is in one of the following ranges, the percentage per
annum  set  forth  opposite  such  Funded  Debt  Ratio:
            FUNDED DEBT RATIO                             COMMITMENT FEE RATE
            -----------------                             -------------------
            Less than 2.0 to 1.0                                       0.375%
            --------------------                                       ------
            2.0 to 1.0 or greater and less than 2.5 to 1.0             0.375%
                                                                       ------
            2.5 to 1.0 or greater and less than 3.0 to 1.0             0.375%
                                                                       ------
            3.0 to 1.0 or greater and less than 3.25 to 1.0             0.50%
                                                                        -----
            3.25 to 1.0 or greater                                      0.50%
            ----------------------                                      -----

"EBITDA"  means,  for  the  preceeding  12 month period, Consolidated Net Income
 ------
calculated  before  federal income taxes, plus (a) depreciation and amortization
 ---                                      ----
and  interest expenses, plus (b) terminated rent expenses prior to and ending on
                        ----
November  30,  2001, to include (i) rent expense, including, without limitation,
base  rent,  CAM  charges  and repairs and maintenance, and (ii) associated rent
expenses incurred in connection with the Norco distribution warehouse located at
920  Avenue  R, Suite 100, Grand Prairie, Texas  75050, the Borrower's corporate
headquarters  located  at  5050 Quorum Dive, Suite 500, Dallas, Texas 75240, and
the  Borrower's  training  center located at 4819 Keller Springs, Addison, Texas
75248,  minus  (c)  any extraordinary gains or losses of the Borrower during the
        -----
period  in  question.

"EURODOLLAR  ADVANCES" means Advances the interest rates on which are determined
 --------------------
on the basis on the rates referred to in the definition of LIBOR in this Section
1.1.

 "FIXED  CHARGE  COVERAGE  RATIOFIXED CHARGE COVERAGE RATIO" means, at any time,
  ---------------------------------------------------------
the  quotient determined by dividing (a) the sum of (i) EBITDA for the preceding
twelve  (12)  calendar  months,  minus (ii) treasury stock purchases made by the
Borrower  for  the  preceding twelve (12) calendar months, minus (iii) dividends
paid  by  the  Borrower during the preceding twelve (12) calendar months, by (b)
the  sum of (i) all scheduled payments on all Long Term Debt of the Borrower and
the  Subsidiaries  and all scheduled payments under Capital Lease Obligations of
the  Borrower  and  the  Subsidiaries  to  be  paid  during the next twelve (12)
calendar  months,  plus  (ii)  interest expenses and tax expenses (to the extent
paid in cash) of the Borrower and the Subsidiaries for the preceding twelve (12)
calendar  months.

"FUNDED  DEBT RATIO" means, at any time, the quotient determined by dividing (a)
 ------------------
the  sum  of all Debt for borrowed money, Capital Lease Obligations and purchase
money Debt of the Borrower and the Subsidiaries, by (b) EBITDA for the preceding
twelve  (12)  complete  fiscal  months.

"PRIME  RATE  MARGIN"  means,  (a) with respect to the Term Loan, a deduction of
 -------------------
three-fourths  of  one  percent  (-0.75%)  and (b) with respect to the Revolving
Credit  Loans,  at any time, the following percentage determined by reference to
the  Funded  Debt  Ratio  then  existing:

           FUNDED DEBT RATIO               PERCENTAGE FOR REVOLVING CREDIT LOANS
           -----------------               -------------------------------------
            Less than 2.0 to 1.0                                           -1.00
           --------------------                                            -----
            2.0 to 1.0 or greater and less than 2.5 to 1.0                -0.75%
                                                                          ------
            2.5 to 1.0 or greater and less than 3.0 to 1.0                -0.50%
                                                                          ------
            3.0 to 1.0 or greater and less than 3.25 to 1.0               -0.25%
                                                                          ------
            3.25 to 1.0 or greater                                         0.00%
            ----------------------                                         -----

"REVOLVING  CREDIT  NOTE"  means the Fifth Amended and Restated Revolving Credit
 -----------------------
Note  executed  by  the  Borrower  and  payable  to the order of the Bank in the
 -
aggregate  principal amount of the Revolving Credit Commitment, in substantially
 -
the  form  of  Exhibit A hereto, together with all amendments, modifications and
               ---------
renewals  thereof.

"TERMINATION  DATE" means 10:00 A.M. Dallas, Texas time on December 31, 2003, or
 -----------------
such  earlier  date and time on which the Revolving Credit Commitment terminates
as provided in this Agreement; provided, however, if such date is not a Business
Day, the "Termination Date" shall be the first Business Day following such date.

Section 2.5 AMENDMENT OF EXHIBIT A.  Effective as of the Effective Date, Exhibit
            ----------------------
     A to the Loan Agreement is deleted and a new Exhibit A, attached as Exhibit
A to  this  Amendment,  is  inserted  in  its  place.

Section 2.6      AMENDMENT  TO  SECTION  11.4.
        Effective  as  of the Effective Date, Section 11.4 of the Loan Agreement
is  hereby  amended  and  restated  in  its  entirety  to  read  as  follows:
     (b)     Restricted  Payments.  The  Borrower  will  not  declare or pay any
             --------------------
dividends  or make any other payment or distribution (whether in cash, property,
or obligations) on account of its capital stock, or redeem, purchase, retire, or
otherwise acquire any of its capital stock, or permit any of its Subsidiaries to
purchase  or  otherwise  acquire  any  capital  stock of the Borrower or another
Subsidiary, or set apart any money for a sinking or other analogous fund for any
dividend  or  other  distribution  on  its  capital stock or for any redemption,
purchase, retirement, or other acquisition of any of its capital stock; provided
that  the  foregoing  restrictions  do not prohibit (a) dividend payments on any
class  of  capital  stock  payable  solely  in  shares  of  capital stock of the
Borrower;  (b)  payments  of  dividends from any Subsidiary to the Borrower; (c)
payments  in  lieu  of  taxes  to the Borrower or a Subsidiary pursuant to a tax
sharing  agreement;  (d)  any  exchange  of  stock  not  involving  any  cash
consideration  pursuant to a stock option plan for employees or directors of the
Borrower;  and (e) any other redemption, purchase, retirement or the acquisition
of  the Borrower's capital stock or payment of cash dividends upon obtaining the
prior  written  approval  of  the  Bank,  it  being  understood  that,  based on
performance, the Borrower may request the Bank to consider granting its approval
of  restricted  payments  on  a quarterly basis, or at such other time as deemed
necessary.

Section  2.7   AMENDMENT  TO  SECTION  12.2.
               ----------------------------
        Effective  as  of the Effective Date, Section 12.2 of the Loan Agreement
is  hereby  amended  and  restated  in  its  entirety  to  read  as  follows:
     Section  12.2.  Funded  Debt  Ratio.  The Borrower will maintain, as of the
                     -------------------
end  of each fiscal quarter, a Funded Debt Ratio of not greater than (a) 3.25 to
1.00  for  the  three (3) fiscal quarters ending on or around December 31, 2001,
March  31,  2002, and June 30, 2002, respectively, (b) 3.00 to 1.00 for the next
three  (3)  consecutive  fiscal quarters ending on or around September 30, 2002,
December 31, 2002 and March 31, 2003, respectively, and (c) 2.75 to 1.00 for the
fiscal  year  ending  on  or  around June 30, 2003, and at all times thereafter.

                                 ARTICLE  III.
                                 -------------
                  AMENDMENTS  TO  CONSTRUCTION  LOAN  DOCUMENTS

Section 3.1 AMENDMENTS  TO  CONSTRUCTION  LOAN  AGREEMENT
            ---------------------------------------------
(a)     Amendment  to  Definitions.
---     --------------------------
       Effective  as  of the Effective Date, the following definition in Section
1.1  of  the  Construction  Loan Agreement is hereby amended and restated in its
entirety  to  read  as  follows:
     "LOAN  CONVERSION"  - The conversion of the Loan from the Construction Loan
      ----------------
to  the  Mini-Perm  Loan  all  in  accordance with the provisions of Section 2.4
hereof.  The  effective date of the Loan Conversion shall be the first (1st) day
of  the  calendar  month  following  the  satisfaction  of  the  Loan Conversion
requirements  set  forth in Section 2.4, which effective date shall not be later
than  February  1,  2002.

(b)     Amendment  to  Section  2.4
---     ---------------------------
   Effective  as  of the Effective Date, the last sentence of Section 2.4 of the
Construction  Loan  Agreement  is hereby amended and restated in its entirety to
read  as  follows:
     To  the  extent  Loan Conversion has not occurred by February 1, 2002, then
Borrower  shall  not  thereafter  be  eligible  for  Loan  Conversion.

(c)     Amendment  to  Section  2.5. Effective as of the Effective Date, Section
---     ----------------------------
2.5  of  the  Construction  Loan Agreement is hereby amended and restated in its
entirety  to  read  as  follows:

     Section 2.5.     Maturity Date.  The Maturity Date of the Loan means (a) at
                      -------------
all times prior to Loan Conversion, February 1, 2002, and (b) if Loan Conversion
occurs  on  or  before  February 1, 2002, then December 28, 2007; subject to the
right  of  acceleration  provided herein and elsewhere in the Loan Documents, at
which  time  all  sums  due  and  owing  under this Agreement and the other Loan
Documents  shall  be  repaid  in  full.  All  payments  due to Lender under this
Agreement,  whether  at  the  Maturity  Date  or  otherwise,  shall  be  paid in
immediately  available  funds.
Section 3.2          AMENDMENTS  TO  FIXED  RATE  AGREEMENT
                     --------------------------------------
     (a)     DELETION  OF  DEFINITIONS.     Effective  as of the Effective Date,
             --------------------------
the  following  definitions  in Section 1 of the Fixed Rate Agreement are hereby
deleted  in  their  entirety:
     "ADJUSTED  EURODOLLAR  RATE"
      --------------------------
     "EURODOLLAR  RATE"
      ----------------
     "EURODOLLAR  RATE  MARGIN"
      ------------------------
     "RESERVE  REQUIREMENT"
      --------------------
     (b)ADDITION  OF  DEFINITIONS.     Effective  as  of the Effective Date, the
        -------------------------
following  definitions  shall  be inserted in their proper alphabetical order to
Section  1  of  the  Fixed  Rate  Agreement:

     "BASE LIBOR" means, for any Eurodollar Advance for any Interest Period, the
      ----------
rate per annum for United States dollar deposits quoted by the Reference Bank as
the  Inter-Bank  Market Offered Rate on the date that is two Business Days prior
to  the  Interest Period, with the understanding that such rate is quoted by the
Reference  Bank  for  the purpose of calculating effective rates of interest for
loans  making  reference  thereto,  on  the  first day of an Interest Period for
delivery  of  funds on such date for a period of time approximately equal to the
number  of days in such Interest Period, and in an amount approximately equal to
the  principal  amount  to  which  such  Interest  Period  applies.  Borrower
understands  and  agrees  that  the Reference Bank may base its quotation of the
Inter-Bank  Market  Offered  Rate upon such offers or other market indicators of
the  Inter-Bank  Market  as  the  Reference  Bank, in its sole discretion, deems
appropriate  including,  without  limitation, the rate offered for United States
dollar  deposits  on  the  London  Inter-Bank  Market.

"LIBOR"  means, for any Eurodollar Advance for any Interest Period, the rate per
 -----
annum  and  determined  pursuant  to  the  following  formula:  (a)  Base  LIBOR
applicable  to  such Eurodollar Advance for such Interest Period, divided by (b)
one  hundred  percent  (100%)  minus  the  LIBOR  Reserve  Percentage  for  such
Eurodollar  Advance  for  such  Interest  Period.

"LIBOR  RATE  MARGIN"  means  one  and  one-half  percent  (1.50%).
 -------------------
"LIBOR  RESERVE  PERCENTAGE"  means, for any Eurodollar Advance for any Interest
 --------------------------
Period,  the  reserve  percentage  prescribed  by  the Board of Governors of the
Federal  Reserve  system  (or  any successor) for "Eurocurrency Liabilities" (as
defined  in  Regulation  D),  adjusted  by the Bank for expected changes in such
reserve  percentage  during  the  applicable  Interest  Period.

          (c)     REFERENCES  TO  DELETED  DEFINITIONS.  Effective  as  of  the
                  ------------------------------------
Effective  Date:
(i)     All references to "Adjusted Eurodollar Rate" in the Fixed Rate Agreement
     shall  be  deemed  to  be  references  to  "LIBOR";
(ii)     All  references  to "Eurodollar Rate" in the Fixed Rate Agreement shall
be  deemed  to  be  references  to  "Base  LIBOR";
(iii)     All references to "Eurodollar Rate Margin" in the Fixed Rate Agreement
shall  be  deemed  to  be  references  to  "LIBOR  Rate  Margin";  and
(iv)     All  references  to  "Reserve  Requirement" in the Fixed Rate Agreement
shall  be  deemed  to  be  references  to  "LIBOR  Reserve  Percentage."
          (d)     AMENDMENT TO DEFINITIONS.  Effective as of the Effective Date,
                  ------------------------
the  following  definitions  in Section 1 of the Fixed Rate Agreement are hereby
amended  and  restated  in  their  entirety  to  read  as  follows:
     "EURODOLLAR  ADVANCES"  means  Advances  the  interest  rates  on which are
      --------------------
determined  on  the basis of the rates referenced to in the definition of LIBOR.
"MATURITY  DATE"  means  (a)  at all times prior to Loan Conversion, February 1,
 --------------
2002,  and  (b)  if  Loan  Conversion occurs on or before February 1, 2002, then
 --
December  28,  2007.
 --
                                 ARTICLE  IV.
                                 ------------
                            CONDITIONS  PRECEDENT

Section 4.1 CONDITIONS.  The  effectiveness  of this Amendment is subject to the
            ----------
satisfaction  of  the following conditions precedent on or prior to February 15,
2002  (where  applicable):
(a)     The Bank shall have received all of the following, in form and substance
satisfactory  to  the  Bank:
(1)     Resolutions.  Resolutions  of the Board of Directors of the Borrower and
---     -----------
each  Guarantor  certified  by  its  Secretary  or  an Assistant Secretary which
authorize  the  execution,  delivery,  and  performance by the Borrower and each
Guarantor  of  this Amendment and the other Loan Documents to which the Borrower
or  such  Guarantor  is  or  is  to  be  a  party  hereunder;
(2)     Incumbency  Certificate.  A  certificate  of incumbency certified by the
---     -----------------------
Secretary  or  an  Assistant  Secretary  of  the  Borrower  and  each  Guarantor
--
certifying  the  names  of  the  officers  of  the  Borrower  and each Guarantor
--
authorized  to sign this Amendment and each of the other Loan Documents to which
--
the  Borrower  or such Guarantor is or is to be a party hereunder (including the
certificates  contemplated  herein),  together  with specimen signatures of such
officers;
(3)     Articles  of Incorporation.  A certificate certified by the Secretary or
---     --------------------------
an  Assistant  Secretary  of the Borrower and each Guarantor certifying that the
articles  of  incorporation  of  the  Borrower  and each Guarantor have not been
amended or modified since March 31, 2000 and are still in full force and effect;
(4)     Bylaws.  A  certificate  certified  by  the  Secretary  or  an Assistant
---     ------
Secretary  of  the Borrower and each Guarantor certifying that the bylaws of the
---
Borrower  and  each  Guarantor have not been amended or modified since March 31,
2000  and  are  still  in  full  force  and  effect;  and
(5)     Governmental  Certificates.  Certificates  of the appropriate government
---     --------------------------
officials of the state of incorporation of the Borrower and each Guarantor as to
the  existence  and good standing of the Borrower and each Guarantor, each dated
no  earlier  than  ten  (10)  days  prior  to  the  date  hereof.
(b)     Borrower  shall  have  executed  and delivered to the Bank the Revolving
Credit  Note  in  the  form  attached  hereto  as  Exhibit  A.
                                                   ----------
(c)     The  representations  and  warranties  contained herein and in all other
Loan  Documents,  as  amended  hereby,  shall be true and correct as of the date
hereof  as  if  made  on  the  date  hereof.
(d)     No  Event  of Default shall have occurred and be continuing and no event
or condition shall have occurred that with the giving of notice or lapse of time
or  both  would  be  an  Event  of  Default.
(e)     All  corporate  proceedings  taken  in  connection with the transactions
contemplated  by  this Amendment and all documents, instruments, and other legal
matters  incident  thereto  shall  be  satisfactory  to  the  Bank and its legal
counsel,  Vinson  &  Elkins  L.L.P.

                                 ARTICLE  V.
                                 -----------
                 RATIFICATIONS,  REPRESENTATIONS  AND  WARRANTIES

Section 5.1    RATIFICATIONS.
               -------------
        The  terms  and  provisions set forth in this Amendment shall modify and
supersede  all inconsistent terms and provisions set forth in the Loan Agreement
or  the  Construction Loan Documents, as applicable (each, a "MODIFIED DOCUMENT"
                                                              -----------------
and  collectively,  the  "MODIFIED DOCUMENTS"), and except as expressly modified
                          ------------------
and  superseded  by  this  Amendment,  the  terms and provisions of the Modified
Documents  are  ratified  and  confirmed  and  shall  continue in full force and
effect.  The  Borrower and the Bank agree that the Modified Documents as amended
hereby  shall continue to be legal, valid, binding and enforceable in accordance
with  their  terms.

Section 5.2    REPRESENTATIONS  AND  WARRANTIES.
                --------------------------------
        The  Borrower  hereby  represents  and warrants to the Bank that (i) the
execution, delivery and performance of this Amendment and any and all other Loan
Documents  executed and/or delivered in connection herewith have been authorized
by  all  requisite  corporate  action  on  the part of the Borrower and will not
violate  the  articles  of  incorporation  or  bylaws  of the Borrower, (ii) the
representations  and  warranties contained in the Modified Documents, as amended
hereby,  and  any other Loan Document are true and correct on and as of the date
hereof  as  though  made on and as of the date hereof, (iii) no Event of Default
has  occurred and is continuing and no event or condition has occurred that with
the  giving of notice or lapse of time or both would be an Event of Default, and
(iv)  Borrower  is  in  material  compliance  with  all covenants and agreements
contained  in  the  Modified  Documents  as  amended  hereby.

                                 ARTICLE  VI.
                                 ------------
                                MISCELLANEOUS

Section 6.1    SURVIVAL  OF  REPRESENTATIONS  AND  WARRANTIES.
                ----------------------------------------------
        All  representations  and warranties made in this Amendment or any other
Loan  Document  including  any  Loan  Document furnished in connection with this
Amendment  shall  survive  the  execution and delivery of this Amendment and the
other  Loan  Documents,  and  no  investigation by the Bank or any closing shall
affect  the representations and warranties or the right of the Bank to rely upon
them.

Section 6.2    REFERENCE  TO  AGREEMENT.
                ------------------------
        Each of the Loan Documents, including the Modified Documents and any and
all  other  agreements,  documents, or instruments now or hereafter executed and
delivered  pursuant  to  the  terms  hereof or pursuant to the terms of the Loan
Agreement  as  amended  hereby, are hereby amended so that any reference in such
Loan  Documents to the Modified Documents shall mean a reference to the Modified
Documents  as  amended  hereby.

Section  6.3   EXPENSES  OF  BANK.
            ------------------
        As  provided in the Loan Agreement, the Borrower agrees to pay on demand
all  costs and expenses incurred by the Bank in connection with the preparation,
negotiation,  and  execution  of  this  Amendment  and  the other Loan Documents
executed  pursuant  hereto  and  any  and  all  amendments,  modifications,  and
supplements  thereto,  including,  without limitation, the costs and fees of the
Bank's  legal  counsel  in  connection  therewith,  and  all  costs and expenses
incurred  by  the Bank in connection with the enforcement or preservation of any
rights  under the Loan Agreement, as amended hereby, or any other Loan Document,
including  without  limitation  the  costs and fees of the Bank's legal counsel.

Section 6.4    SEVERABLITY.
                -----------
        Any  provision  of  this  Amendment  held  by  a  court  of  competent
jurisdiction  to  be invalid or unenforceable shall not impair or invalidate the
remainder  of  this  Amendment  and  the effect thereof shall be confined to the
provision  so  held  to  be  invalid  or  unenforceable.

Section 6.5    APPLICABLE  LAW.
                ---------------
        This  Amendment  and  all  other Loan Documents executed pursuant hereto
shall  be  deemed  to  have  been  made  and to be performable in Dallas, Dallas
County, Texas and shall be governed by and construed in accordance with the laws
of  the  State  of  Texas.

Section 6.6    SUCCESSORS  AND  ASSIGNS.
                ------------------------
        This  Amendment  is  binding  upon and shall inure to the benefit of the
Bank  and  the  Borrower and their respective successors and assigns, except the
Borrower  may  not assign or transfer any of its rights or obligations hereunder
without  the  prior  written  consent  of  the  Bank.

Section 6.7    COUNTERPARTS.
                ------------
        This  Amendment  may  be  executed  in one or more counterparts, each of
which  when so executed shall be deemed to be an original, but all of which when
taken  together  shall  constitute  one  and  the  same  instrument.

Section 6.8    EFFECT  OF  WAIVER.
                ------------------
        No  consent  or  waiver,  express  or implied, by the Bank to or for any
breach  of  or deviation from any covenant, condition or duty by the Borrower or
any  of  the  Guarantors  shall be deemed a consent or waiver to or of any other
breach  of  the  same  or  any  other  covenant,  condition  or  duty.

Section 6.9    HEADINGS.
                --------
        The  headings, captions, and arrangements used in this Amendment are for
convenience  only  and  shall  not  affect the interpretation of this Amendment.

Section 6.10    ENTIRE  AGREEMENT.
                 -----------------
        THIS  AMENDMENT  AND  ALL  OTHER  INSTRUMENTS,  DOCUMENTS AND AGREEMENTS
EXECUTED  AND  DELIVERED  IN  CONNECTION  WITH  THIS AMENDMENT EMBODY THE FINAL,
ENTIRE  AGREEMENT  AMONG  THE  PARTIES  HERETO  AND  SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS,  AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL,  RELATING  TO  THIS  AMENDMENT,  AND  MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE  OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF  THE  PARTIES  HERETO.  THERE ARE NO ORAL AGREEMENT AMONG THE PARTIES HERETO.
                  [Remainder of Page Intentionally Left Blank]

<PAGE>
Executed  as  of  the  date  first  written  above.

     Borrower:

     PIZZA  INN,  INC.

     By: /s/ Ronald W. Parker
     Ronald  W.  Parker
     President


     BANK:

WELLS  FARGO  BANK  TEXAS,
NATIONAL  ASSOCATION

By: /s/ Austin D. Nettle
     Austin  D.  Nettle
     Vice  President

<PAGE>
Each  of  the Guarantors hereby consents and agrees to this Amendment and agrees
that the Guaranty shall remain in full force and effect and shall continue to be
the  legal,  valid  and binding obligation of such Guarantor enforceable against
such  Guarantor  in  accordance  with  its  terms.
     Guarantors:

     BARKO  REALTY,  INC.
     R-CHECK,  INC.
     PIZZA  INN  OF  DELAWARE,  INC.

     By: /s/ Ronald W. Parker
          Ronald  W.  Parker
          President

<PAGE>
                                 EXHIBIT A
                                  -------
                          FORM OF REVOLVING CREDIT NOTE
                          -----------------------------




</TEXT>
</DOCUMENT>
