LIMITED WAIVER TO CREDIT AGREEMENT
 
THIS LIMITED WAIVER TO CREDIT AGREEMENT (this “Waiver”) is entered into as of
October 14, 2008, by and among Buffets, Inc., a Minnesota corporation, as a
debtor and debtor in possession under Chapter 11 of the Bankruptcy Code
(“Borrower”), Buffets Holdings, Inc., a Delaware corporation, as a debtor and
debtor in possession under Chapter 11 of the Bankruptcy Code (“Holdings”), the
Subsidiaries of Borrower and Holdings, as Guarantors (together with Borrower and
Holdings, the “Loan Parties”), the financial institutions party hereto as
Lenders (collectively, the “Lenders”) and Credit Suisse, Cayman Islands Branch,
as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”). Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Credit Agreement (as
hereinafter defined).  
 
RECITALS

WHEREAS, Borrower, Holdings, the Administrative Agent and the Lenders are
parties to the Secured Super-Priority Debtor in Possession Credit Agreement,
dated as of January 22, 2008 (as has been or may be further amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
pursuant to which, among other things, the Lenders agreed, subject to the terms
and conditions set forth in the Credit Agreement, to make certain loans and
other financial accommodations to Borrower;
 
WHEREAS, the Event of Default listed on Exhibit A hereto has occurred and is
continuing under the Credit Agreement as of the date hereof (the “Specified
Default”);
 
WHEREAS, pursuant to the Forbearance Agreement and Second Amendment, dated as of
September 26, 2008 (the “Forbearance Agreement and Second Amendment”), by and
among the Loan Parties, the Administrative Agent and the Lenders signatory
thereto, the Lenders have agreed, subject to the terms and conditions set forth
therein, to forbear from exercising certain of their default-related rights and
remedies against Borrower and the other Loan Parties with respect to the
Specified Default during the Forbearance Period (as defined therein);
 
WHEREAS, the Loan Parties have requested that the undersigned Lenders agree to
waive the Specified Default under the Credit Agreement as provided for herein;
and
 
WHEREAS, subject to certain conditions provided for herein, the undersigned
Lenders are willing to effect such waiver on the terms and subject to the
conditions of this Waiver.
 
NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and
conditions contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
 

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SECTION I. WAIVER
 
A. Limited Waiver. Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of the Loan Parties herein
contained, effective upon satisfaction of the conditions precedent set forth in
Section II below, the undersigned Lenders hereby consent to the waiver of the
Specified Default.
 
B. Limitation of Waiver. The waiver set forth above shall be limited precisely
as written and relate solely to the waiver of the provision of the Credit
Agreement in the manner and to the extent described above, and nothing in this
Waiver shall be deemed to:
 

 
(i)
constitute a waiver of (A) any Default or Event of Default other than the
Specified Default, or (B) any other term, provision or condition of any Loan
Document or any other instrument or agreement referred to therein; or

 

 
(ii)
prejudice any right or remedy that the Administrative Agent or any Lender may
have (except to the extent such right or remedy was based upon the Specified
Default) or may have in the future under or in connection with the Credit
Agreement or any other instrument or agreement referred to therein.

 
The Loan Parties hereby agree and acknowledge that the Lenders require and will
require strict performance by the Loan Parties of all of their respective
obligations, agreements and covenants contained in the Credit Agreement and the
other Loan Documents, and no inaction or action regarding any Event of Default
(other than the waiver expressly set forth herein with respect to the Specified
Default) is intended to be or shall be a waiver thereof.

SECTION II. CONDITIONS PRECEDENT TO EFFECTIVENESS
 
This Waiver shall become effective as of the date hereof only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the
“Waiver Effective Date”):
 
A. Execution. The Administrative Agent shall have received duly executed
signature pages for this Waiver signed by the Required Lenders, Borrower and the
other Loan Parties.
 
B. Representations and Warranties. As of the Waiver Effective Date, each
representation and warranty of each Loan Party set forth in Section III hereof
and in the Credit Agreement, shall be true and correct in all material respects.
 
C. Fees and Expenses. Borrower and each other Loan Party shall have paid the
Administrative Agent and the Lenders, as applicable, the fees described in
Section 15(b) of the Forbearance Agreement and Second Amendment and in that
certain Fee Letter, dated September 26, 2008 between the Borrower and the
Administrative Agent.
 
D. Bankruptcy Court Order. The Administrative Agent shall have received a copy
of an interim or final order from the Bankruptcy Court in form and substance
satisfactory to the Administrative Agent approving the execution, delivery and
performance of the Forbearance Agreement and Second Amendment and each provision
set forth therein shall have become effective; provided, however, that (A) if
the Bankruptcy Court has not entered a final order approving the Forbearance
Agreement and Second Amendment in form and substance satisfactory to the
Administrative Agent, such interim order shall be in full force and effect and
shall not have been stayed, reversed, vacated or otherwise modified in a manner
materially adverse to the Lenders and (B) if the Bankruptcy Court has entered
such final order, such final order shall be in full force and effect and shall
not have been stayed, reversed, vacated or otherwise modified in a manner
materially adverse to the Lenders.
 
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SECTION III. REPRESENTATIONS AND WARRANTIES
 
In order to induce the Administrative Agent and the Lenders to enter into this
Waiver in the manner provided herein, each of Borrower and the other Loan
Parties represents and warrants to each of the Lenders and the Administrative
Agent that, as of the Waiver Effective Date:
 
(a) The individual executing this Agreement on behalf of Borrower and each other
Loan Party is authorized to so act and the execution of this Agreement by such
individual makes the obligations set forth herein legal, valid, binding and
enforceable against Borrower or such other Loan Party in accordance with their
respective terms, except as the enforcement thereof may be subject to the Final
Order;
 
(b) Except with respect to the Specified Default, each of the representations
and warranties contained in the Credit Agreement and the other Loan Documents is
true and correct on and as of the date hereof as if made on the date hereof,
except to the extent that such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall be
true and correct as of such earlier date, and each of the agreements and
covenants in the Credit Agreement and the other Loan Documents is hereby
reaffirmed with the same force and effect as if each were separately stated
herein and made as of the date hereof;
 
(c) Neither the execution, delivery and performance of this Agreement nor the
consummation of the transactions contemplated hereby does or shall contravene,
result in a breach of, or violate the Final Order;
 
(d) As of the date hereof, other than the Specified Default, no Event of Default
has occurred or is continuing under this Agreement, the Credit Agreement or any
other Loan Document; and
 
(e) The Lenders’ security interests in the Collateral continue to be valid,
binding, and enforceable first-priority security interests which secure the
Obligations and no tax or judgment liens are currently of record against
Borrower or any other Loan Party.
 
SECTION IV. MISCELLANEOUS
 
A. Effect on the Credit Agreement and the Other Loan Documents.
 
(i) Except as expressly set forth herein, this Waiver shall not by implication
or otherwise limit, impair, constitute a waiver of or otherwise affect the
rights and remedies of the Lenders or the Administrative Agent under the Credit
Agreement or any other Loan Document, and shall not alter, modify, amend or in
any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other provision of the
Credit Agreement or of any other Loan Document, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. Nothing
herein shall be deemed to entitle any Loan Party to a further consent to, or a
further waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document in similar or different circumstances.
 
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(ii) On and after the Waiver Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, and this Waiver and the Credit Agreement shall be read
together and construed as a single instrument. This Waiver is a Loan Document.
 
(iii) Except as specifically waived or amended above, the Credit Agreement and
the other Loan Documents are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed. Without limiting the
generality of the foregoing, the Security Documents and all of the Collateral
described therein do and shall continue to secure the payment and performance of
all Obligations under and as defined therein.
 
(iv) This Waiver shall not be deemed or construed to be a satisfaction,
reinstatement, novation or release of the Loan Documents.
 
B. Headings. Section headings used herein are for convenience of reference only,
are not part of this Waiver and are not to affect the construction of, or to be
taken into consideration in interpreting, this Waiver.
 
C. Successors and Assigns. This Waiver shall be binding upon the parties hereto
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders.
 
D. Severability. In the event any one or more of the provisions contained in
this Waiver should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions. 
 
E. Applicable Law. THIS WAIVER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 
 
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F. Counterparts. This Waiver may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original but all of which when taken together shall constitute a single
contract, and shall become effective as provided in Section II. Delivery of an
executed signature page to this Waiver by facsimile transmission or other
electronic transmission shall be as effective as delivery of a manually signed
counterpart of this Waiver.
 
[Remainder of this page intentionally left blank.]

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IN WITNESS WHEREOF, this Waiver to Credit Agreement has been executed by the
parties hereto as of the date first written above.
 
BUFFETS, INC.,
as Borrower
 
 
BUFFETS HOLDINGS, INC.,
as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Financial Officer
 
Its:
Chief Financial Officer
 
 
 
 
 
 
 
HOMETOWN BUFFET, INC.,
as Loan Party
 
 
OCB PURCHASING CO.,
as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Financial Officer
 
Its:
Chief Financial Officer
 
 
 
 
 
 
 
OCB RESTAURANT COMPANY, LLC,
as Loan Party
 
 
BUFFETS FRANCHISE HOLDINGS, LLC, as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Finance Manager
 
Its:
Chief Finance Manager
 
 
 
 
 
 
 
BUFFETS LEASING COMPANY, LLC,
as Loan Party
 
 
RYAN’S RESTAURANT GROUP, INC.,
as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Finance Manager
 
Its:
Chief Financial Officer
 
 
 
 
 
 
 
RYAN’S RESTAURANT LEASING COMPANY, LLC, as Loan Party
 
 
RYAN’S RESTAURANT MANAGEMENT GROUP, LLC, as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Finance Manager
 
Its:
Chief Finance Manager
 

 
SIGNATURE PAGE TO WAIVER TO CREDIT AGREEMENT

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HOMETOWN LEASING COMPANY, LLC, as Loan Party
 
 
OCB LEASING COMPANY, LLC,
as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Finance Manager
 
Its:
Chief Finance Manager
 
 
 
 
 
 
 
FIRE MOUNTAIN RESTAURANTS, LLC,
as Loan Party
 
FIRE MOUNTAIN LEASING COMPANY, LLC, as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Finance Manager
 
Its:
Chief Finance Manager
 
 
 
 
 
 
 
FIRE MOUNTAIN MANAGEMENT GROUP, LLC, as Loan Party
 
BIG R PROCUREMENT COMPANY, LLC, as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Finance Manager
 
Its:
Chief Finance Manager
 
 
 
 
 
 
 
TAHOE JOE’S, INC.,
as Loan Party
 
 
TAHOE JOE’S LEASING COMPANY, LLC, as Loan Party
 
By:
/s/ A. Keith Wall
 
By:
/s/ A. Keith Wall
 
Name:
A. Keith Wall
 
Name:
A. Keith Wall
 
Its:
Chief Financial Officer
 
Its:
Chief Finance Manager
 
 
 
 
 
 
 

SIGNATURE PAGE TO WAIVER TO CREDIT AGREEMENT
 

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CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent
 
 
CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent
 
By:
/s/ Didier Siffer
 
By:
/s/ Megan Kane
 
Name:
Didier Siffer
 
Name:
Megan Kane
 
Its:
Managing Director
 
Its:
Director
 
 
 
 
 
 
 
KING’S CROSS ASSET FUNDING 27 sarl,
as a Lender
 
 
KING’S CROSS ASSET FUNDING 27 sarl,
as a Lender
 
By:
/s/ Beatriz Villate
 
By:
/s/ Jenny Karlsson
 
Name:
Beatriz Villate
 
Name:
Jenny Karlsson
 
Its:
Authorized Signatory
 
Its:
Authorized Signatory
 
 
 
 
 
 
 
WATERSHED CAPITAL INSTITUTIONAL PARTNERS, L.P., by WS Partners, L.L.C., its
General Partner, as a Lender
 
 
WATERSHED CAPITAL PARTNERS, L.P., as a Lender
 
By:
/s/ Meridee A. Moore
 
By:
/s/ Meridee A. Moore
 
Name:
Meridee A. Moore
 
Name:
Meridee A. Moore
 
Its:
Senior Managing Member
 
Its:
Senior Managing Member
 
 
 
 
 
 
 
ANCHORAGE CROSSOVER CREDIT FINANCE, Ltd., by Anchorage Advisors, L.L.C., its
Investment Manager, as a Lender
 
 
 
 
By:
/s/ Michael Aglialoro
 
   
 
Name:
Michael Aglialoro
 
   
 
Its:
Executive Vice President
 
   
 
 
 
 
 
 
 

SIGNATURE PAGE TO WAIVER TO CREDIT AGREEMENT
 

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EXHIBIT A (Specified Default)
 
1.
Event of Default under Section 7(d) of the Credit Agreement, as a result of the
Borrower’s failure to meet the Minimum Consolidated EBITDA covenant set forth in
Section 6.13 of the Credit Agreement with respect to the three month fiscal
accounting period ending on August 27, 2008.

 

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