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:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      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.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      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.
        

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      (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. 

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      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.]


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      


      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


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        
          	
                  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

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        
          	
                  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

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      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.