Unassociated Document


    


    


    
      	
              CREDIT
      SUISSE SECURITIES (USA) LLC

              Eleven
      Madison Avenue

              New
      York, NY 10010

            


    

    


    


     

    CONFIDENTIAL

     

    February
6, 2009

    Buffets,
Inc.

    1460
Buffet Way

    Eagan,
Minnesota 55121

    Attention:  R.
Michael Andrews

     

    


     

    Buffets,
Inc.

    $120,000,000 Funded Senior
Secured Exit Credit Facility

    Engagement
Letter

     

    Ladies
and Gentlemen:

    


    You have
advised Credit Suisse Securities (USA) LLC (together with its affiliates, “Credit
Suisse”, “we” or
“us”) that
it is exclusively authorized by Buffet’s, Inc. (the “Borrower”
or “you”), a
debtor-in-possession under Chapter 11 of the United States Bankruptcy Code (the
“Bankruptcy
Code”), and certain of its subsidiaries that are debtors-in-possession
under the Bankruptcy Code (collectively, with the Borrower, the “Debtors”)
in jointly administered cases in the United States Bankruptcy Court for the
District of Delaware (the “Bankruptcy
Court”), in connection with certain transactions described herein, to act
as sole lead arranger, sole bookrunner, sole administrative agent and sole
collateral agent for the Facility (as defined below).

     

    You have
informed us that, in connection with the Debtors’ joint plan of reorganization
under Chapter 11 of the Bankruptcy Code, as amended (the “Plan”), it
is proposed that the Borrower obtain a senior secured exit credit facility
providing gross cash proceeds in an aggregate amount of at least $120,000,000
(the “Facility”)
on the terms described in the Summary of Principal Terms and Conditions attached
hereto as Exhibit A (the “Term
Sheet”) or such other or modified terms as are acceptable to the
Debtors.

     

    You have
also informed us that the Debtors intend to amend the proposed Plan to provide
that:

     

    
      	
               
      

            	
              ·

            	
              up
      to $200,000,000 in aggregate principal amount of the Borrower’s existing
      debtor-in-possession credit facility (the “Rollover
      DIP Facility”) be converted into a second lien senior secured term
      loan facility (the “Second Lien
      Term Facility”)1; provided that (x) prior
      to converting the loans of any lender under the Rollover DIP Facility into
      loans under the Second Lien Term Facility, such lender shall commit to
      provide a portion of the Facility in an aggregate principal amount equal
      to at least 60% of their loans under the Rollover DIP Facility and (y)
      lenders under the Rollover DIP Facility that do not commit to provide a
      portion of the Facility shall not receive any portion of the Second Lien
      Term Facility and shall instead receive a form of equity interest in
      Buffets Restaurants Holdings, Inc.;

            


    

     

     __________________________

      
        	
                1

              	
                A to-be-determined
      portion of the Second Lien Term Facility may be assumed by
      Holdings.

              


      

       

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    
      	
               
      

            	
              ·

            	
              up
      to $47,000,000 in aggregate principal amount of the Borrower’s existing
      synthetic letter of credit facility be converted into a modified or new
      second lien senior secured synthetic letter of credit facility (the “Synthetic
      L/C Facility”); and

            


    

     

    
      	
               
      

            	
              ·

            	
              up
      to $25,000,000 in aggregate principal amount of the Borrower’s existing
      cash collateralized letter of credit facility be converted into a new or
      modified $30,000,000 cash collateralized letter of credit facility (the
      “Cash
      Collateralized L/C
Facility”).

            


    

     

    The
consummation of the Plan, including the entering into and funding of the
Facility and all related transactions contemplated by the Plan and this
engagement letter (including the Term Sheet and the other attachments hereto,
this “Engagement
Letter”), are hereinafter collectively referred to as the “Transactions.”

     

    


     

    1.           Titles and
Roles.

     

    You
hereby appoint Credit Suisse to act, and Credit Suisse hereby agrees to act, as
sole administrative agent, sole collateral agent, sole bookrunner and sole lead
arranger for the Facility upon the terms and subject to the conditions set forth
or referred to in this Engagement Letter.  Credit Suisse, in such
capacities, will perform the duties and exercise the authority customarily
performed and exercised by it in such roles.  In its capacity as sole
lead arranger and sole bookrunner, Credit Suisse agrees to use commercially
reasonable efforts to arrange a syndicate of banks, financial institutions and
other institutional lenders (the “Lenders”)
that will participate in the Facility.  You agree that no other
agents, co-agents or arrangers will be appointed, no other titles will be
awarded and no compensation (other than that expressly contemplated by this
Engagement Letter) will be paid in connection with the Facility unless you and
we shall so agree.  It is understood and agreed that this Engagement
Letter shall not constitute a commitment to provide, arrange or syndicate the
Facility or give rise to any obligation or commitment to provide any
financing.

     

    2.           Syndication.

     

    We intend
to commence syndication efforts promptly upon the execution of this Engagement
Letter, and you agree to actively assist us in completing a satisfactory
syndication.  Such assistance shall include (a) your using
commercially reasonable efforts to ensure that any syndication efforts benefit
materially from your existing lending and investment banking relationships, (b)
direct contact between your senior management, representatives and advisors and
the proposed Lenders, (c) assistance by you in the preparation of a Confidential
Information Memorandum for the Facility and other marketing materials to be used
in connection with the syndication, (d) your providing a detailed business plan
or projections of you and your subsidiaries for the years 2009 through 2013 and
for the quarters beginning with the first quarter of 2009 and
through the fourth quarter of 2009, in form
and substance satisfactory to Credit Suisse, and (e) the hosting, with Credit
Suisse, of one or more meetings of prospective Lenders.

     


    
      
         


      

      
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    You
agree, at the request of Credit Suisse, to assist in the preparation of a
version of the Confidential Information Memorandum and other marketing materials
and presentations to be used in connection with the syndication of the Facility,
consisting exclusively of information and documentation that is either (i) of a
type that would be publicly available if you were a public reporting company or
(ii) not material with respect to you or your subsidiaries or any of your or
their respective securities for purposes of foreign, United States Federal and
state securities laws (all such information and documentation being “Public Lender
Information”).  Any information and documentation that is not
Public Lender Information is referred to herein as “Private Lender
Information”.  You further agree that each document to be
disseminated by Credit Suisse to any Lender in connection with the Facility
will, upon the request of Credit Suisse, be identified by you as either (i)
containing Private Lender Information or (ii) containing solely Public Lender
Information.  You acknowledge that the following documents contain
solely Public Lender Information (unless you notify us promptly that any such
document contains Private Lender Information): (a) drafts and final definitive
documentation with respect to the Facility; (b) administrative materials
prepared by Credit Suisse for prospective Lenders (such as a lender meeting
invitation, bank allocation, if any, and funding and closing memoranda); and (c)
notification of changes in the terms of the Facility.

     

    Credit
Suisse will manage all aspects of any syndication, including decisions as to the
selection of institutions to be approached and when they will be
approached, when their commitments will be accepted, which institutions will
participate, the allocation of the commitments among the Lenders, any naming
rights and the amount and distribution of fees among the Lenders.  To
assist Credit Suisse in its syndication efforts, you agree promptly to prepare
and provide to Credit Suisse all information with respect to you and your
subsidiaries, the Transactions and the other transactions contemplated hereby,
including all financial information and projections (the “Projections”),
as we may reasonably request.

     

    3.           Information.

     

    You
hereby represent and covenant that (a) all information other than the
Projections (the “Information”)
that has been or will be made available to Credit Suisse by or on behalf of you
or any of your representatives is or will be, when furnished, complete and
correct in all material respects and does not or will not, when furnished,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made
and (b) the Projections that have been or will be made available to Credit
Suisse by or on behalf of you or any of your representatives have been or will
be prepared in good faith based upon accounting principles consistent with your
historical audited financial statements and upon assumptions that are reasonable
at the time made and at the time the related Projections are made available to
Credit Suisse.  You agree that if at any time prior to the closing
date of the Facility (the “Closing
Date”) any of the representations in the preceding sentence would be
incorrect if the Information and Projections were being furnished, and such
representations were being made, at such time, then you will promptly supplement
the Information and the Projections so that such representations will be correct
under those circumstances.  In arranging and syndicating the Facility,
we will be entitled to use and rely primarily on the Information and the
Projections without responsibility for independent verification
thereof.

     

    4.           Clear
Market.

     

    To ensure
an orderly and effective syndication of the Facility, you agree that, from the
date hereof until the earlier of the termination of the syndication (as
determined by Credit Suisse in its sole discretion) or the termination of this
Engagement Letter, you will not and you will not permit any of your affiliates
to, syndicate or issue, attempt to syndicate or issue, announce or authorize the
announcement of the syndication or issuance of, or engage in discussions
concerning the syndication or issuance of, any debt securities or commercial
bank or other credit facilities, without the prior written consent of Credit
Suisse.

     


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    


     

    5.           Fees.

     

    As
consideration for Credit Suisse’s structuring of the Facility, you shall pay to
Credit Suisse, for its own account, a non-refundable fee (the “Structuring
Fee”) equal to $1,000,000 within two (2) business days after entry of an
order by the Bankruptcy Court approving the payment of the Structuring
Fee.

     

    In
addition, as consideration for Credit Suisse’s agreement to perform the services
described herein, you agree to pay to Credit Suisse, upon the funding of the
Facility, for its own account, an arrangement fee (the “Arrangement
Fee”) equal to the sum of:

     

    
      	
               
      

            	
               (w)

            	
              3.0%
      of the gross cash proceeds of the Facility arising from loans made by
      lenders (“New
      Lenders”) that, as of the date hereof, are neither lenders under
      the Borrower’s existing “new money” debtor-in-possession credit facility
      (“New
      Money DIP
      Lenders”), lenders under the Borrower’s existing pre-petition
      credit facility (“Pre-Petition
      Lenders”) nor lenders under the Rollover DIP Facility (“Rollover
      DIP Lenders”); provided that to the
      extent the gross cash proceeds of the Facility arising from loans made by
      New Lenders is less than $60,000,000 and Credit Suisse received
      commitments from New Lenders to make loans under the Facility that would
      have yielded a greater amount of gross cash proceeds, the amount under
      this clause (w) shall be increased by an amount equal to 3.0% of the
      additional gross cash proceeds of the Facility that would have resulted
      from accepting such commitments; provided, further, that
      if such amount is increased pursuant to the first proviso of this clause
      (w), the aggregate amount under this clause (w) shall not exceed
      $1,800,000;

            


    

     

    
      	
               
      

            	
              (x)

            	
              3.0%
      of the gross cash proceeds of the Facility arising from loans made by
      Pre-Petition Lenders that are not also New Money DIP
    Lenders;

            


    

     

    
      	
               
      

            	
              (y)

            	
              3.0%
      of the gross cash proceeds of the Facility arising from loans made by
      Rollover DIP Lenders that are not also New Money DIP Lenders;
      and

            


    

     

    
      	
               
      

            	
              (z)

            	
              an
      amount equal to the sum of (i) 1.0% of the initial $73,000,000 in gross
      cash proceeds of the Facility arising from loans made by New Money DIP
      Lenders and (ii) 3.0% of the gross cash proceeds of the Facility arising
      from loans made by New Money DIP Lenders in excess of
      $73,000,000;

            


    

     

    provided, that the aggregate
amount of the Arrangement Fee shall not exceed 3.0% of the gross cash proceeds
of the Facility and the aggregate amount of the Structuring Fee paid to Credit
Suisse shall be credited against the Arrangement Fee.

     

    You
understand that it may be necessary for you to pay participation fees (the
“Participation
Fees”), which may take the form of original issue discount, to the
Lenders (including, if Credit Suisse becomes a Lender, Credit Suisse) in
connection with the syndication of the Facility.  The aggregate amount
of the Participation Fees, and the allocation thereof among the Lenders
(including, if Credit Suisse becomes a Lender, Credit Suisse), shall, subject to
approval by the Debtors, be as determined by Credit Suisse to be advisable to
ensure the successful syndication of the Facility, and the entire amount of the
Participation Fees shall be payable by you to the Lenders in addition to the
Arrangement Fee and the New Lender Arrangement Fee which are payable to Credit
Suisse.  If Credit Suisse becomes a Lender, in no event shall the
Participation Fees payable to any other Lender (as a percentage of the
commitments of such Lender) exceed the Participation Fees payable to Credit
Suisse (as a percentage of the commitments, if any, of Credit
Suisse).

     


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    


     

    In its
capacity as administrative agent in respect of the Facility, Credit Suisse will
be paid an annual administration fee (the “Administration
Fee”) in the amount of $250,000 for each year of the Facility (less the
aggregate amount of administrative agency fees paid to Credit Suisse for such
year with respect to the Second Lien Term Facility and the Synthetic L/C
Facility).  The first payment of such annual Administration Fee will
be due on the Closing Date, and each payment of such annual Administration Fee
thereafter will be due in advance on each anniversary of the Closing Date prior
to the maturity of the Facility.  Such annual Administration Fee will
be in addition to reimbursement of Credit Suisse’s out-of-pocket
expenses.

     

    You agree
that, once paid, the fees or any part thereof payable hereunder will not be
refundable under any circumstances.  All fees payable hereunder will
be paid in immediately available funds and shall not be subject to reduction by
way of setoff or counterclaim.  In connection with the syndication of
the Facility, Credit Suisse may, in its discretion, allocate to the Lenders
portions of any fees payable to it in connection therewith.

     

    6.           Alternate
Transaction.

     

    You also
agree that, if you or any of your affiliates determine to proceed within one
year from
the date hereof with any transaction similar in nature and scope to the
Transactions (any such transaction, an “Alternate
Transaction”), you or such affiliate will appoint Credit Suisse as sole
administrative agent, sole lead arranger and sole bookrunner (on terms
acceptable to Credit Suisse and you) for any bank financing relating to such
Alternate Transaction (“Alternate
Transaction Financing”) unless Credit Suisse does not agree to take such
Alternate Transaction Financing to market (on terms acceptable to Credit Suisse
and you).  If, in connection with the consummation of any Alternate
Transaction, a financial institution other than Credit Suisse arranges or
provides debt financing (notwithstanding a willingness on the part of Credit
Suisse to take to market the Facility or such Alternate Transaction Financing),
you agree to pay to Credit Suisse an amount equal to the Arrangement Fee that
would have otherwise been payable to Credit Suisse immediately upon the
consummation of such Alternate Transaction.  Notwithstanding the
foregoing, no Arrangement Fee shall be payable to Credit Suisse in connection
with an Alternate Transaction if this agreement has been terminated by Credit
Suisse pursuant to subsection (x) of paragraph 17 or terminated by the Borrower
pursuant to paragraph 7 hereof prior to the time such Arrangement Fee would have
otherwise become payable pursuant to the immediately preceding
sentence.

     

    7.           Termination by
Debtors.

     

    The
Borrower shall have the right to terminate this agreement (i) if the “Maturity
Date” (as defined under the New Money DIP Facility referred to in the Term Sheet
(the “DIP
Maturity Date”)) is not extended beyond the current date of April 30,
2009, and Credit Suisse has not obtained commitments for the Facility on or
prior to such date, at any time after April 30, 2009, (ii) if the DIP Maturity
Date is extended beyond April 30, 2009 and Credit Suisse has not obtained
commitments for the Facility by May 31, 2009, at any time after May 31, 2009,
(iii) if the DIP Maturity Date is extended beyond April 30, 2009, at any time
after the DIP Maturity Date (as such date may be further extended from time to
time) if the Facility has not closed by such date (except as a result of a
condition precedent to closing not being satisfied) or (iv) at any time for
cause, including, without limitation, Credit Suisse’s failure to timely
undertake commercially reasonable efforts to arrange the Facility.

     


    
      
         


      

      
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    8.           No Obligation to
Close.

     

    The
Borrower shall have no obligation to close on any Facility arranged by Credit
Suisse unless the final terms and documentation are in a form acceptable to the
Borrower in its sole discretion.

     

    9.           Indemnification;
Expenses.

     

    You agree
(a) to indemnify and hold harmless Credit Suisse and its officers, directors,
employees, agents, advisors, controlling persons, members and successors and
assigns (each, an “Indemnified
Person”) from and against any and all losses, claims, damages,
liabilities and expenses, joint or several, to which any such Indemnified Person
may become subject arising out of or in connection with this Engagement Letter,
the Transactions, the Facility or any related transaction or any claim,
litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any such Indemnified Person is a party thereto (and
regardless of whether such matter is initiated by a third party or by the
Borrower or any of its affiliates), and to reimburse each such Indemnified
Person upon demand for any reasonable legal or other expenses incurred in
connection with investigating or defending any of the foregoing, provided that the foregoing
indemnity will not, as to any Indemnified Person, apply to losses, claims,
damages, liabilities or related expenses to the extent they are found in a
final, non-appealable judgment of a court of competent jurisdiction to have
resulted primarily from the willful misconduct or gross negligence of such
Indemnified Person, and (b) to reimburse Credit Suisse from time to time, upon
presentation of a summary statement, for all reasonable out-of-pocket expenses
(including but not limited to expenses of Credit Suisse’s due diligence
investigation, consultants’ and other professionals’ fees, syndication expenses,
travel expenses and fees, disbursements and other charges of counsel), in each
case, incurred in connection with the Facility and the preparation, negotiation
and enforcement of this Engagement Letter, the definitive documentation for the
Facility and any ancillary documents and security arrangements in connection
therewith.  Notwithstanding any other provision of this Engagement
Letter, no
Indemnified Person shall be liable for any indirect, special, punitive or
consequential damages in connection with its activities related to the
Facility.

     

    10.           Sharing Information; Absence
of Fiduciary Relationship; Affiliate Activities.

     

    You
acknowledge that Credit Suisse may be providing debt financing, equity capital
or other services (including financial advisory services) to other companies in
respect of which you may have conflicting interests regarding the transactions
described herein or otherwise.  We will not furnish confidential
information obtained from you by virtue of the transactions contemplated by this
Engagement Letter or our other relationships with you to other
companies.  You also acknowledge that we do not have any obligation to
use in connection with the transactions contemplated by this Engagement Letter,
or to furnish to you, confidential information obtained by us from other
companies.

     


    
      
         


      

      
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    You
further acknowledge and agree that (a) no fiduciary, advisory or agency
relationship between you and Credit Suisse is intended to be or has been created
in respect of any of the transactions contemplated by this Engagement Letter,
irrespective of whether Credit Suisse has advised or is advising you on other
matters, (b) Credit Suisse, on the one hand, and you, on the other hand, have an
arms-length business relationship that does not directly or indirectly give rise
to, nor do you rely on, any fiduciary duty on the part of Credit Suisse, (c) you
are capable of evaluating and understanding, and you understand and accept, the
terms, risks and conditions of the transactions contemplated by this Engagement
Letter, (d) you have been advised that Credit Suisse is engaged in a broad range
of transactions that may involve interests that differ from your interests and
that Credit Suisse has no obligation to disclose such interests and transactions
to you by virtue of any fiduciary, advisory or agency relationship, and (e) you
waive, to the fullest extent permitted by law, any claims you may have against
Credit Suisse for breach of fiduciary duty or alleged breach of fiduciary duty
and agree that Credit Suisse shall have no liability (whether direct or
indirect) to you in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on behalf of or in right of you, including your
stockholders, employees or creditors.

     

    You
further acknowledge that Credit Suisse is a full service securities firm engaged
in securities trading and brokerage activities as well as providing investment
banking and other financial services.  In the ordinary course of
business, Credit Suisse may provide investment banking and other financial
services to, and/or acquire, hold or sell, for its own accounts and the accounts
of customers, equity, debt and other securities and financial instruments
(including bank loans and other obligations) of, you and other companies with
which you may have commercial or other relationships.  With respect to
any securities and/or financial instruments so held by Credit Suisse or any of
its customers, all rights in respect of such securities and financial
instruments, including any voting rights, will be exercised by the holder of the
rights, in its sole discretion.

     

    11.           Assignments, Amendments,
Governing Law, Etc.

     

    This
Engagement Letter shall not be assignable by you without the prior written
consent of Credit Suisse (and any attempted assignment without such consent
shall be null and void), is intended to be solely for the benefit of the parties
hereto (and Indemnified Persons), and is not intended to confer any benefits
upon, or create any rights in favor of, any person other than the parties hereto
(and Indemnified Persons).  Any and all services to be provided by
Credit Suisse hereunder may be performed and any and all rights of Credit Suisse
hereunder may be exercised by or through any of its affiliates or branches. This
Engagement Letter may not be amended or any provision hereof waived or modified
except by an instrument in writing signed by Credit Suisse and
you.  This Engagement Letter may be executed in any number of
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one agreement.  Delivery of an executed
counterpart of a signature page of this Engagement Letter by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.  Paragraph headings used herein are for convenience of
reference only, are not part of this Engagement Letter and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Engagement Letter.  You acknowledge that information and documents
relating to the Facility may be transmitted through SyndTrak, Intralinks, the
internet, e-mail or similar electronic transmission systems and that Credit
Suisse shall not be liable for any damages arising from the unauthorized use by
others of information or documents transmitted in such manner. This Engagement
Letter supersedes all prior understandings, whether written or oral, between us
with respect to the Facility.  THIS ENGAGEMENT LETTER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

     


    
      
         


      

      
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    12.           Jurisdiction.

     

    Each of
the parties hereto hereby irrevocably and unconditionally (a) submits, for
itself and its property, to the exclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Engagement Letter or the transactions
contemplated hereby, or for recognition or enforcement of any judgment, and
agrees that all claims in respect of any such action or proceeding may be heard
and determined only in such New York State court or, to the extent permitted by
law, in such Federal court or, prior to confirmation of the Plan, the Bankruptcy
Court, (b) waives, to the fullest extent it may legally and effectively do so,
any objection which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Engagement
Letter or the transactions contemplated hereby in any New York State court
or in any such Federal court, (c) waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court, and (d) agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Service of any process, summons, notice or document by
registered mail addressed to you at the address above shall be effective service
of process against you for any suit, action or proceeding brought in any such
court.

     

    13.           Waiver of Jury
Trial.

     

    EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY
RELATED TO OR ARISING OUT OF THIS ENGAGEMENT LETTER OR THE PERFORMANCE OF
SERVICES HEREUNDER.

     

    14.           Confidentiality.

     

    The Term
Sheet is delivered to you on the understanding that neither the Term
Sheet nor any of its terms or substance, nor the activities of Credit
Suisse pursuant hereto, shall be disclosed, directly or indirectly, to any other
person except (a) to your officers, directors, employees, attorneys, accountants
and advisors on a confidential and need-to-know basis, (b) as may be required in
connection with (x) obtaining the order of the Bankruptcy Court authorizing the
Debtors to enter into this Engagement Letter, pay the fees and expenses set
forth or referred to herein and to undertake and perform the indemnity
obligations referred to herein and (y) the confirmation of the Plan; provided that to the extent
it is necessary to disclose the Term Sheet for such purposes, you shall take
such reasonable actions as may be necessary to prevent the Term Sheet from
becoming publicly available, including, without limitation, the filing of a
motion or an ex parte request seeking an order of the Bankruptcy Court
authorizing the Borrower to file the body of the Term Sheet under seal (it being
understood that the issuance of such order will be subject to the approval of
the Bankruptcy Court) and (c) as required by applicable law or compulsory legal
process (in which case you agree to inform us promptly thereof prior to such
disclosure).

     


    
      
         


      

      
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    Notwithstanding
anything herein to the contrary, any party to this Engagement Letter (and any
employee, representative or other agent of such party) may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax structure
of the transactions contemplated by this Engagement Letter and all materials of
any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure, except that (i) tax treatment
and tax structure shall not include the identity of any existing or future party
(or any affiliate of such party) to this Engagement Letter, and (ii) no party
shall disclose any information relating to such tax treatment and tax structure
to the extent nondisclosure is reasonably necessary in order to comply with
applicable securities laws.  For this purpose, the tax treatment of
the transactions contemplated by this Engagement Letter is the purported or
claimed U.S. Federal income tax treatment of such transactions and the tax
structure of such transactions is any fact that may be relevant to understanding
the purported or claimed U.S. Federal income tax treatment of such
transactions.

     

    15.           Surviving
Provisions.

     

    The
compensation, alternate transaction, reimbursement, indemnification,
confidentiality, jurisdiction, governing law and waiver of jury trial provisions
contained herein shall remain in full force and effect regardless of whether
definitive financing documentation shall be executed and delivered and
notwithstanding the termination of this Engagement Letter or Credit Suisse’s
agreements hereunder.

     

    16.           PATRIOT Act
Notification.

     

    Credit
Suisse hereby notifies you that pursuant to the requirements of the USA PATRIOT
Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT
Act”),
Credit Suisse may be and each Lender is required to obtain, verify and record
information that identifies the Borrower, which information includes the name,
address, tax identification number and other information regarding the Borrower
that will allow Credit Suisse or such Lender to identify the Borrower in
accordance with the PATRIOT Act.  This notice is given in accordance
with the requirements of the PATRIOT Act and is effective as to Credit Suisse
and each Lender.  You hereby acknowledge and agree that Credit Suisse
shall be permitted to share any or all such information with the
Lenders.

     

    17.           Acceptance and
Termination.

     

    If the
foregoing correctly sets forth our agreement, please indicate your acceptance of
the terms of this Engagement Letter by returning to us executed counterparts
hereof not later than 5:00 p.m., New York City time, on February 9,
2009.  Credit Suisse’s agreements contained herein will expire at such
time in the event that Credit Suisse has not received such executed counterparts
in accordance with the immediately preceding sentence.  Subject to the
terms of Section 15 above, this Engagement Letter may be terminated by Credit
Suisse at any time after the earlier of (x) the earlier of 30 days after the DIP
Maturity Date (as such date may be further extended from time to time) and July
31, 2009 and (y) a material breach by the Borrower under this Engagement
Letter.

     

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        9

        
          

        

      

      
         


      

    


    Credit
Suisse is pleased to have been given the opportunity to assist you in connection
with the financing contemplated hereby.

    


    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      	 
      
	 
      	
              CREDIT
      SUISSE SECURITIES (USA) LLC

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Ali R. Mehdi

            
	 
      	 
      	
              Name:  Ali
      R. Mehdi

            
	 
      	 
      	
              Title:    Managing
      Director

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    


     

    Accepted
and agreed to as of

    the date
first above written:

     

    BUFFETS,
INC.

     

    By: /s/ R. Michael Andrews,
Jr.                                                                                                 

    Name:  R.
Michael Andrews, Jr.

    Title:    Chief
Executive Officer