Document:

FORBEARANCE
      AGREEMENT AND
      SECOND AMENDMENT TO CREDIT AGREEMENT

     

    This
      FORBEARANCE AGREEMENT AND SECOND AMENDMENT TO CREDIT AGREEMENT (this
“Agreement”)
      is
      entered into as of September 26, 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

     

    A. On
      January 22, 2008, Borrower and Holdings and certain of their Subsidiaries each
      filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code
      with the United States Bankruptcy Court for the District of Delaware (the
“Bankruptcy
      Court”).
      On
      February 22, 2008, the Bankruptcy Court entered a final order (as has been
      or
      may be further amended, restated, supplemented or otherwise modified from time
      to time, the “Final
      Order”)
      authorizing Borrower to obtain post-petition debtor-in-possession financing
      pursuant to the terms and conditions set forth in that certain 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”).
      

     

    B. Pursuant
      to the Credit Agreement, the Lenders have agreed, subject to the terms and
      conditions set forth in the Credit Agreement, to make certain loans and other
      financial accommodations to Borrower. 

     

    C. As
      of the
      date hereof, the Event of Default listed on Exhibit
      A
      hereto
      has either occurred and is continuing as of the date hereof or is expected
      to
      occur prior to the expiration of the Forbearance Period (as hereinafter defined)
      (collectively, the “Specified
      Default”).
      

     

    D. Upon
      Borrower’s request, the undersigned Lenders have agreed, subject to the terms
      and conditions set forth herein, to (a) forbear from exercising certain of
      their
      default-related rights and remedies against Borrower and the other Loan Parties
      with respect to the Specified Default and (b) amend the Credit Agreement as
      set
      forth in Section 2 below. 

     

    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
      1. Confirmation
      by Borrower of Obligations and Specified Default

     

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

    

    (a)
      Borrower and each other Loan Party acknowledges and agrees that as of September
      26, 2008, the aggregate principal balance of the outstanding Obligations under
      the Credit Agreement is at least $279,930,667.44, and that the respective
      principal balances of the various Loans as of such date were not less than
      the
      following:

     

    
      
        	
                New
                  Money Loans

              	
                $80,300,000.00

              
	
                Rollover
                  Loans

              	
                $199,630,667.14

              

      

    

     

    The
      foregoing amounts do not include interest, fees, expenses and other amounts
      which are chargeable or otherwise reimbursable under the Credit Agreement and
      the other Loan Documents. All
      of
      the Obligations, including those set forth above, are valid and outstanding,
      and
      none of Borrower and the other Loan Parties have any rights of offset, defenses,
      claims or counterclaims with respect to any of the Obligations. 

     

    (b)
      Borrower and each other Loan Party acknowledges and agrees that the Specified
      Default constitutes a material Event of Default that has occurred and is
      continuing as of the date hereof or is expected to occur and continue during
      the
      Forbearance Period, as the case may be. Prior to the effectiveness of this
      Agreement, the existence of the Specified Default (i) relieved or upon its
      occurrence would relieve the Lenders from any obligation to provide any
      financial accommodations under the Credit Agreement or other Loan Documents
      and
      (ii) permitted or upon its occurrence would permit the Lenders to, among other
      things, (A) suspend or terminate any commitment to provide Loans or make other
      extensions of credit under any or all of the Credit Agreement and the other
      Loan
      Documents, (B) accelerate all or any portion of the New Money Loans, (C) charge
      the default interest rate applicable pursuant to Section 2.07 of the Credit
      Agreement with respect to the New Money Loans, (D) commence any legal or other
      action to collect any or all of the Obligations from Borrower, any other Loan
      Party and/or any Collateral or any other property as to which any other Person
      granted the Lenders a security interest therein as security for the Obligations
      or any guaranty thereof (collectively, the “Other
      Collateral”),
      (E)
      foreclose or otherwise realize on any or all of the Collateral and Other
      Collateral, and/or appropriate, set-off and apply to the payment of any or
      all
      of the Obligations, any or all of the Collateral and Other Collateral, and/or
      (F) take any other enforcement action or otherwise exercise any or all rights
      and remedies provided for by any or all of the Credit Agreement, the other
      Loan
      Documents or applicable law.

     

    SECTION
      2. Amendments
      to Credit Agreement. 

     

    (a)
      Effective as of the Forbearance Effective Date (as defined herein), the
      following provisions of the Credit Agreement shall be amended as set forth
      below:   

     

    (i)
      Section 5.13 of the Credit Agreement is hereby amended by deleting the reference
      to “September 30, 2008” in clause (i) of paragraph (b) thereof and replacing it
      with “October 30, 2008”.

     

    (ii)
      Article VII of the Credit Agreement is hereby amended by deleting the reference
      to “September 30, 2008” in clause (i) of paragraph (p) thereof and replacing it
      with “October 30, 2008”.

     

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    (b)
      Effective as of the Supplemental Amendments Effective Date (as defined herein),
      the
      following provisions of the Credit Agreement shall be amended as set forth
      below: 

     

    (i)
      Section 1.1 of the Credit Agreement is hereby amended by deleting the definition
      of “Applicable Percentage” in its entirety and replacing it with the
      following:

     

    “Applicable
      Percentage”
shall
      mean (a) with respect to the New Money Loans, 8.25% and (b) with respect to
      the
      Rollover Loans, 7.25%. 

     

    (ii)
      Section 6.13 of the Credit Agreement is hereby deleted in its entirety and
      replaced with the following: 

     

    “Permit
      the Consolidated EBITDA of the Borrower for the most recently completed three
      monthly fiscal accounting periods, as of the last day of each monthly fiscal
      accounting period commencing (i) February 6, 2008 and ending August 27, 2008,
      to
      be less than 85% of the corresponding Consolidated EBITDA set forth in the
      Final
      Budget and (ii) September 24, 2008 and ending on the Maturity Date, to be less
      than the amounts indicated for such three monthly fiscal accounting periods
      ending on the applicable dates set forth below:

     

    
      	
              Period

            	
              Minimum
                EBITDA

              ($
                thousands)

            
	
              September
                24, 2008

            	
              14,464

            
	
              October
                22, 2008

            	
              14,511

            
	
              November
                19, 2008

            	
              16,420

            
	
              December
                17, 2008

            	
              18,519

            
	
              January
                14, 2009

            	
              16,406

            
	
              February
                11, 2009

            	
              14,610

            
	
              March
                11, 2009

            	
              16,231

            
	
              April
                8, 2009

            	
              19,874

            
	
              May
                6, 2009

            	
              22,340

            
	
              June
                3, 2009

            	
              22,709

            
	
              July
                1, 2009 

            	
              23,844

            

    

     

    For
      the
      avoidance of doubt, (i) the Credit Agreement shall remain amended as set forth
      in this Section 2 after the Forbearance Period expires or terminates and (ii)
      the increase in the Applicable Percentage applicable with respect to the New
      Money Loans from 7.25% to 8.25% made pursuant to Section 2(b)(i) hereof shall
      apply retroactively as of the Forbearance Effective Date.

     

    SECTION
      3. General
      Release; Covenant Not to Sue.

     

    (a) Subject
      to the approval of the Bankruptcy Court pursuant to the order referred to in
      Section 14(b)(i) hereof, and in consideration of, among other things, the
      Lenders’ execution and delivery of this Agreement, each of Borrower and
      Holdings, on behalf of itself and its agents, representatives, officers,
      directors, advisors, employees, subsidiaries, affiliates, successors and assigns
      (collectively, “Releasors”),
      hereby forever waives, releases and discharges, to the fullest extent permitted
      by law, each Releasee (as hereinafter defined) from any and all liens, claims,
      interests and causes of action of any kind or nature (collectively, the
“Claims”)
      that
      such Releasor now has or hereafter may have against the Lenders in their
      capacity as Lenders and their respective affiliates, subsidiaries, shareholders
      and “controlling persons” (within the meaning of the federal securities laws),
      and their respective successors and assigns and each and all of the officers,
      directors, employees, agents, attorneys and other representatives of each of
      the
      foregoing (collectively, the “Releasees”),
      based
      on facts existing on or before the Forbearance Effective Date that relate to:
      (i) any Loan Document, (ii) any transaction, action or omission contemplated
      thereby, or (iii) any aspect of the dealings or relationships between or among
      Borrower and the other Loan Parties, on the one hand, and the Lenders, on the
      other hand, relating to any Loan Document or transaction, action or omission
      contemplated thereby. The receipt by Borrower or Holdings of any Loans or other
      financial accommodations made by the Lenders after the date hereof shall
      constitute a ratification, adoption, and confirmation by such party of the
      foregoing general release of all Claims against the Releasees which are based
      on
      facts existing on or prior to the date of receipt of any such Loans or other
      financial accommodations. The provisions of this Section shall survive the
      termination of this Agreement, the Credit Agreement, the other Loan Documents
      and payment in full of the Obligations.

     

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    (b) Subject
      to the approval of the Bankruptcy Court pursuant to the order referred to in
      Section 14(b)(i) hereof, each of Borrower and Holdings, on behalf of itself
      and
      its successors, assigns, and other legal representatives, hereby unconditionally
      and irrevocably agrees that it will not sue any Releasee on the basis of any
      Claim released, remised and discharged by Borrower or Holdings pursuant to
      this
      Section 3. If Borrower, Holdings or any of its successors, assigns or other
      legal representatives violates the foregoing covenant, Borrower and Holdings,
      each for itself and its successors, assigns and legal representatives, agrees
      to
      pay, in addition to such other damages as any Releasee may sustain as a result
      of such violation, all attorneys’ fees and costs incurred by any Releasee as a
      result of such violation.

     

    SECTION
      4. Forbearance;
      Forbearance Default Rights and Remedies.

     

    (a) Effective
      as of the Forbearance Effective Date, the Lenders agree that until the
      expiration or termination of the Forbearance Period (as hereinafter defined),
      they will temporarily forbear from exercising their respective default-related
      rights and remedies against Borrower or any other Loan Party solely with respect
      to the Specified Default. As used herein, the term “Forbearance
      Period”
shall
      mean the period beginning on the Forbearance Effective Date and ending on the
      earlier to occur of: (i) any Forbearance Default (as hereinafter defined),
      or
      (ii) October 15, 2008. As used herein, the term “Forbearance
      Default”
shall
      mean (A) the occurrence of any Event of Default other than the Specified
      Default, (B) the failure of Borrower or any other Loan Party to timely comply
      with any term, condition, or covenant set forth in this Agreement, (C) the
      failure of Borrower to file within two Business Days of the Forbearance
      Effective Date a motion, in form and substance satisfactory to the
      Administrative Agent, for an order from the Bankruptcy Court authorizing and
      approving the payment of the fees and expenses set forth herein, (D) the failure
      of Borrower to obtain by October 15, 2008 entry of an order by the Bankruptcy
      Court in form and substance satisfactory to the Administrative Agent authorizing
      and approving the payment of the fees and expenses set forth herein, (E) the
      failure of the Borrower to pay the Administrative Agent and the Lenders within
      two Business Days of the Supplemental Amendments Effective Date the fees and
      expenses described in Section 15(a) and Section 15(b) of this Agreement or
      (F)
      the failure of any representation or warranty made by Borrower or any other
      Loan
      Party under or in connection with this Agreement to be true and complete as
      of
      the date when made or any other breach of any such representation or warranty.
      Any Forbearance Default shall constitute an immediate Event of Default under
      the
      Credit Agreement and other Loan Documents. 

     

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    (b) Upon
      the
      termination or expiration of the Forbearance Period, the agreement of the
      Lenders hereunder to forbear from exercising their respective default-related
      rights and remedies shall immediately terminate without the requirement of
      any
      demand, presentment, protest, or notice of any kind, all of which Borrower
      and
      the other Loan Parties each waives. Borrower and the other Loan Parties each
      agrees that the Lenders may at any time after the expiration or termination
      of
      the Forbearance Period proceed to exercise any and all of their respective
      rights and remedies under any or all of the Credit Agreement, any other Loan
      Document and/or applicable law, all of which rights and remedies are fully
      reserved by the Lenders. 

     

    (c) Any
      agreement by the Lenders to extend the Forbearance Period, if any, must be
      set
      forth in writing and signed by a duly authorized signatory of each Lender
      (constituting Required Lenders with respect hereto). Borrower and the other
      Loan
      Parties each acknowledges that no Lender has made any assurances concerning
      any
      possibility of an extension of the Forbearance Period.

     

    (d) Borrower
      and the other Loan Parties each acknowledges and agrees that any financial
      accommodation which the Lenders make on or after the Forbearance Effective
      Date
      has been made by such party in reliance upon, and is consideration for, among
      other things, the general releases and indemnities contained in Section 3 hereof
      and the other covenants, agreements, representations and warranties of Borrower
      and the other Loan Parties hereunder.

     

    SECTION
      5. Representations,
      Warranties And Covenants Of Borrower and Other Loan
      Parties.
      To
      induce the Lenders to execute and deliver this Agreement, each of Borrower
      and
      the other Loan Parties represents, warrants and covenants that:

     

    (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;

     

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    (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.

     

    (e) Lender’s
      security interests in the Collateral and Other 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
      6. Ratification
      of Liability.
      Each of
      Borrower and the other Loan Parties hereby ratifies and reaffirms all of its
      payment and performance obligations and obligations to indemnify, contingent
      or
      otherwise, under this Agreement and each other Loan Document to which such
      party
      is a party, and each such party hereby ratifies and reaffirms its grant of
      liens
      on or security interests in its properties pursuant to such Loan Documents
      to
      which it is a party as security for the Obligations under or with respect to
      the
      Credit Agreement, and confirms and agrees that such liens and security interests
      hereafter secure all of the Obligations. Borrower and each other Loan Party
      (i)
      acknowledges receipt of a copy of this Agreement and all other agreements,
      documents, and instruments executed and/or delivered in connection herewith,
      (ii) consents to the terms and conditions of same, and (iii) agrees and
      acknowledges that each of the Loan Documents remains in full force and effect
      and is hereby ratified and confirmed. 

     

    SECTION
      7. Reference
      To And Effect Upon The Credit Agreement.

     

    (a) Except
      as
      expressly modified hereby, all terms, conditions, covenants, representations
      and
      warranties contained in the Credit Agreement and other Loan Documents, and
      all
      rights of the Lenders and all of the Obligations, shall remain in full force
      and
      effect. Each of Borrower and the other Loan Parties hereby confirms that no
      such
      party has any right of setoff, recoupment or other offset or any defense, claim
      or counterclaim with respect to any of the Obligations, the Credit Agreement
      or
      any other Loan Document.

     

    (b) Except
      as
      expressly set forth herein, the execution, delivery and effectiveness of this
      Agreement shall not directly or indirectly: (i) create any obligation to make
      any further Loans or to continue to defer any enforcement action after the
      occurrence of any Default or Event of Default (including, without limitation,
      any Forbearance Default), (ii) constitute a consent to or waiver of any past,
      present or future violations of any provisions of the Credit Agreement or any
      other Loan Documents, (iii) amend, modify or operate as a waiver of any
      provision of the Credit Agreement or any other Loan Documents or any right,
      power or remedy of the Lenders, (iv) constitute a consent to any merger or
      other
      transaction or to any sale, restructuring or refinancing transaction, or
      (v) constitute a course of dealing or other basis for altering any
      Obligations or any other contract or instrument. Except as expressly set forth
      herein, the Lenders reserve all of its rights, powers, and remedies under the
      Credit Agreement, the other Loan Documents and applicable law. All of the
      provisions of the Credit Agreement and the other Loan Documents are hereby
      reiterated, and if ever waived, are hereby reinstated.

     

    (c) From
      and
      after the Forbearance Effective Date, (i) the term “Agreement” in the Credit
      Agreement, and all references to the Credit Agreement in any Loan Document
      shall
      mean the Credit Agreement, as amended by this Agreement, and (ii) the term
“Loan
      Documents” in the Credit Agreement and the other Loan Documents shall include,
      without limitation, this Agreement and any agreements, instruments and other
      documents executed and/or delivered in connection herewith.

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

     

    (d) This
      Agreement shall not be deemed or construed to be a satisfaction, reinstatement,
      novation or release of the Credit Agreement or any other Loan Document.

     

    SECTION
      8. Construction.
      This
      Agreement and all other agreements and documents executed and/or delivered
      in
      connection herewith have been prepared through the joint efforts of all of
      the
      parties hereto. Neither the provisions of this Agreement or any such other
      agreements and documents nor any alleged ambiguity therein shall be interpreted
      or resolved against any party on the ground that such party or its counsel
      drafted this Agreement or such other agreements and documents, or based on
      any
      other rule of strict construction. Each of the parties hereto represents and
      declares that such party has carefully read this Agreement and all other
      agreements and documents executed in connection therewith, and that such party
      knows the contents thereof and signs the same freely and voluntarily. The
      parties hereto acknowledge that they have been represented by legal counsel
      of
      their own choosing in negotiations for and preparation of this Agreement and
      all
      other agreements and documents executed in connection herewith and that each
      of
      them has read the same and had their contents fully explained by such counsel
      and is fully aware of their contents and legal effect. 

     

    SECTION
      9. Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed an original, but all such counterparts shall constitute
      one and the same instrument, and all signatures need not appear on any one
      counterpart. Any party hereto may execute and deliver a counterpart of this
      Agreement by delivering by facsimile or other electronic transmission a
      signature page of this Agreement signed by such party, and any such facsimile
      or
      other electronic signature shall be treated in all respects as having the same
      effect as an original signature. 

     

    SECTION
      10. Severability.
      The
      invalidity, illegality, or unenforceability of any provision in or obligation
      under this Agreement in any jurisdiction shall not affect or impair the
      validity, legality, or enforceability of the remaining provisions or obligations
      under this Agreement or of such provision or obligation in any other
      jurisdiction. 

     

    SECTION
      11. Further
      Assurances.
      Borrower
      and each other Loan Party agrees to, and to cause any other Loan Party to,
      take
      all further actions and execute all further documents as the Administrative
      Agent may from time to time reasonably request to carry out the transactions
      contemplated by this Agreement and all other agreements executed and delivered
      in connection herewith.

     

    SECTION
      12. Section
      Headings.
      Section
      headings in this Agreement are included herein for convenience of reference
      only
      and shall not constitute part of this Agreement for any other
      purpose.

     

    SECTION
      13. Notices.
      All
      notices, requests, and demands to or upon the respective parties hereto shall
      be
      given in accordance with the Credit Agreement.

     

    

    
      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    

    

    SECTION
      14. Effectiveness.

     

    (a)
      This
      Agreement (other than those provisions set forth in Section 2(b) hereof) shall
      become effective at the time (the date on which such time occurs, the
“Forbearance
      Effective Date”)
      that
      all of the following conditions precedent have been met (or waived) as
      determined by the Administrative Agent in its sole discretion:

     

    (i) Execution.
      The
      Administrative Agent shall have received duly executed signature pages for
      this
      Agreement signed by the Required Lenders, Borrower and the other Loan Parties.
      

     

    (ii)  Representations
      and Warranties.
      As of
      the Forbearance Effective Date, and, with respect to the provisions set forth
      in
      Section 2(b) hereof, the Supplemental Amendments Effective Date, each
      representation and warranty of each Loan Party set forth in Section 5 and in
      the
      Credit Agreement, as amended by this Agreement, shall be true and correct in
      all
      material respects.

     

    (iii) Due
      Authorization.
      Borrower and each other Loan Party shall have delivered to the Administrative
      Agent (i) evidence of the corporate authority of each such party to execute,
      deliver and perform its obligations under this Agreement and, as applicable,
      all
      other agreements and documents executed in connection therewith, and (ii) such
      other documents and instruments as the Administrative Agent may require, all
      of
      the foregoing of which shall be in form and substance acceptable to the
      Administrative Agent.

     

    (b)
      The
      provisions set forth in Section 2(b) hereof shall become effective at the
      earliest time (the date on which such time occurs, the “Supplemental
      Amendments Effective Date”)
      on
      which both (i) the Forbearance Effective Date shall have occurred and (ii)
      each
      of the following conditions precedent have been met (or waived) as determined
      by
      the Administrative Agent in its sole discretion:

    

    (i)
      Bankruptcy
      Court Order.
      The
      Bankruptcy Court shall have issued an order in form and substance satisfactory
      to the Administrative Agent approving the execution, delivery and performance
      of
      this Agreement, including with respect to the payment of the fees and expenses
      set forth herein. 

     

    (ii)
      Fees
      and Expenses.
      Borrower and each other Loan Party shall have paid the Administrative Agent
      and
      the Lenders, as applicable, (1) the fees, costs and expenses described in
      Section 15(a) and Section 15(b) of this Agreement and (2) the fees payable
      in
      the amounts and at the times separately agreed upon between the Borrower and
      the
      Administrative Agent, in each case in accordance with the order of the
      Bankruptcy Court referred to in Section 14(b)(i) hereof. 

     

    SECTION
      15. Costs
      and Expenses.

     

    (a)
      Costs
      and Expenses.
      Borrower and Holdings agree, jointly and severally, to pay all fees, costs,
      charges and expenses incurred by the Administrative Agent, the Collateral Agent
      and the Lenders in connection with this Agreement (including the reasonable
      fees, charges and disbursements of (i) Blackstone, financial advisor to the
      Administrative Agent and the Collateral Agent (as provided in the letter
      agreement between Blackstone and the Administrative Agent dated as of December
      13, 2007, (ii) Latham & Watkins LLP, counsel for the Administrative Agent
      and the Collateral Agent and (iii) Ropes & Gray LLP, counsel for the
      Lenders).

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (b)
      Fees.
      Borrower and Holdings shall obtain by October 15, 2008 an order from the
      Bankruptcy Court authorizing the payment to the Administrative Agent for the
      benefit of the Lenders of an amendment fee equal to 0.75% of the aggregate
      amount of such Lenders’ outstanding New Money Loans and unused New Money
      Commitments. 

     

    SECTION
      16. Assignments;
      No Third Party Beneficiaries.
      This
      Agreement shall be binding upon and inure to the benefit of the Loan Parties,
      the Lenders and their respective successors and assigns; provided, that no
      Loan
      Party shall be entitled to delegate any of its duties hereunder and shall not
      assign any of its rights or remedies set forth in this Agreement without the
      prior written consent of the Administrative Agent in its sole discretion. No
      Person other than the parties hereto, and in the case of Section 3 hereof,
      the
      Releasees, shall have any rights hereunder or be entitled to rely on this
      Agreement and all third-party beneficiary rights (other than the rights of
      the
      Releasees under Section 3 hereof) are hereby expressly disclaimed.

     

    SECTION
      17. Final
      Agreement.
      This
      Agreement, the Credit Agreement, the other Loan Documents, and the other written
      agreements, instruments, and documents entered into in connection therewith
      (collectively, the “Borrower/Lenders
      Documents”)
      set
      forth in full the terms of agreement between the parties hereto and thereto
      and
      are intended as the full, complete, and exclusive contracts governing the
      relationship between such parties, superseding all other discussions, promises,
      representations, warranties, agreements, and understandings between the parties
      with respect thereto. No term of the Borrower/Lenders Documents may be amended,
      restated, waived or otherwise modified except in a writing signed by the party
      against whom enforcement of the modification, amendment, or waiver is sought.
      Any waiver of any condition in, or breach of, any of the foregoing in a
      particular instance shall not operate as a waiver of other or subsequent
      conditions or breaches of the same or a different kind. The Lenders’ exercise or
      failure to exercise any rights or remedies under any of the foregoing in a
      particular instance shall not operate as a waiver of its right to exercise
      the
      same or different rights and remedies in any other instances. There are no
      oral
      agreements among the parties hereto that are inconsistent with the terms of
      this
      Agreement.

    

    SECTION
      18. Rights
      of the Official Committee of Unsecured Creditors Unaffected.
Notwithstanding
      the foregoing, nothing in this Agreement shall affect the rights of the Official
      Committee of Unsecured Creditors under paragraph 19 of the Final Order to assert
      a Challenge or Excepted Challenge.

     

    SECTION
      19. Governing
      Law.
      THIS
      AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
      THE
      STATE OF NEW YORK.

     

    [Signature
      pages follow.]

    

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    IN
      WITNESS WHEREOF, this Forbearance Agreement and Second Amendment 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/
                  R. Michael Andrews, Jr.

              	 	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr.

              	 	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	 
	
                Its:
                  

              	
                Chief
                  Executive Officer

              	 	
                Its:
                  

              	
                Chief
                  Executive Officer

              	 
	 	 	 	 	 	 
	
                HOMETOWN
                  BUFFET, INC.,
                  

                as
                  Loan Party

                 

              	 	
                OCB
                  PURCHASING CO.,
                  

                as
                  Loan Party

              	 
	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr.

              	 	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	 
	
                Its:
                  

              	
                Chief
                  Executive Officer

              	 	
                Its:
                  

              	
                Chief
                  Executive Officer

              	 
	 	 	 	 	 	 
	
                OCB
                  RESTAURANT COMPANY, LLC,
                  

                as
                  Loan Party

                 

              	 	
                BUFFETS
                  FRANCHISE HOLDINGS, LLC,
                  as Loan Party

              	 
	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	 	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	 
	
                Its:
                  

              	
                Chief
                  Manager 

              	 	
                Its:
                  

              	
                Chief
                  Manager 

              	 
	 	 	 	 	 	 
	
                BUFFETS
                  LEASING COMPANY, LLC,
                  

                as
                  Loan Party

                 

              	 	
                RYAN’S
                  RESTAURANT GROUP, INC.,
                  

                as
                  Loan Party

              	 
	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	 	
                Name:

              	
                R.
                  Michael Andrews, Jr. 

              	 
	
                Its:
                  

              	
                Chief
                  Manager

              	 	
                Its:
                  

              	
                Chief
                  Executive Officer

              	 
	 	 	 	 	 	 
	
                RYAN’S
                  RESTAURANT LEASING COMPANY, LLC,
                  as Loan Party

                 

              	 	
                RYAN’S
                  RESTAURANT MANAGEMENT GROUP, LLC,
                  as Loan Party

              	 
	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	 
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	 	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	 
	
                Its:
                  

              	
                Chief
                  Manager 

              	 	
                Its:

              	
                Chief
                  Manager 

              	 

      

    

     

    

      SIGNATURE
        PAGE TO FORBEARANCE AGREEMENT AND SECOND AMENDMENT TO CREDIT
        AGREEMENT

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

      
        	
                HOMETOWN
                  LEASING COMPANY, LLC,
                  as Loan Party

                 

              	
                 

              	
                OCB
                  LEASING COMPANY, LLC,
                  

                as
                  Loan Party

              	
                 

              
	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr.

              	
                 

              	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	
                 

              
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr.

              	
                 

              	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Manager

              	
                 

              	
                Its:
                  

              	
                Chief
                  Manager

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                FIRE
                  MOUNTAIN RESTAURANTS, LLC,
                  

                as
                  Loan Party

              	
                 

              	
                FIRE
                  MOUNTAIN LEASING COMPANY, LLC,
                  as Loan Party

              	
                 

              
	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	
                 

              	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	
                 

              
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr.

              	
                 

              	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Manager

              	
                 

              	
                Its:
                  

              	
                Chief
                  Manager

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                FIRE
                  MOUNTAIN MANAGEMENT GROUP, LLC,
                  as Loan Party

              	
                 

              	
                BIG
                  R PROCUREMENT COMPANY, LLC,
                  as Loan Party

              	
                 

              
	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	
                 

              	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	
                 

              
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	
                 

              	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Manager 

              	
                 

              	
                Its:
                  

              	
                Chief
                  Manager 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                TAHOE
                  JOE’S, INC.,
                  

                as
                  Loan Party

                 

              	
                 

              	
                TAHOE
                  JOE’S LEASING COMPANY, LLC,
                  as Loan Party

              	
                 

              
	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	
                 

              	
                By:
                  

              	
                /s/
                  R. Michael Andrews, Jr. 

              	
                 

              
	
                Name:
                  

              	
                R.
                  Michael Andrews, Jr. 

              	
                 

              	
                Name:

              	
                R.
                  Michael Andrews, Jr. 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Executive Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Manager 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              

      

    

    

      SIGNATURE
        PAGE TO FORBEARANCE AGREEMENT AND SECOND AMENDMENT 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
                  

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                ANCHORAGE
                  CROSSOVER CREDIT FINANCE, Ltd., by Anchorage Advisors, L.L.C.,
                  its
                  Investment Manager,
                  as
                  a Lender

                 

              	
                 

              	
                KING’S
                  CROSS ASSET FUNDING 27 sarl,
                  

                as
                  a Lender

              	
                 

              
	
                By:
                  

              	
                /s/
                  Michael Aglialoro 

              	
                 

              	
                By:
                  

              	
                /s/
                  Danny Nahum 

              	
                 

              
	
                Name:
                  

              	
                Michael
                  Aglialoro 

              	
                 

              	
                Name:
                  

              	
                 Danny
                  Nahum 

              	
                 

              
	
                Its:
                  

              	
                Executive
                  Vice President

              	
                 

              	
                Its:
                  

              	
                Authorized
                  Signatory

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                KING’S
                  CROSS ASSET FUNDING 27 sarl,
                  

                as
                  a Lender

                 

              	
                 

              	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for AVERY POINT CLO,
                  LTD.,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                /s/
                  Beatriz Villate 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Beatriz
                  Villate 

              	
                 

              	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Authorized
                  Signatory

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 SANKATY
                  ADVISORS, LLC as Collateral Manager for Castle Hill I - INGOTS,
                  Ltd.,
                  as a Lender

                 

              	
                 

              	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Castle Hill II - INGOTS,
                  Ltd.,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              

      

    

     

    
      
         

      

      
        (i)

        
          

        

      

      
         

      

    

    

      
        	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Castle Hill III CLO,
                  Limited,
                  as a Lender

                 

              	
                 

              	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Loan Funding XI
                  LLC,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                Chatham
                  Light II CLO, Limited, by Sankaty Advisors, LLC, as Collateral
                  Manager,
                  as a Lender

                 

              	
                 

              	
                Chatham
                  Light III CLO, Ltd., by Sankaty Advisors, LLC, as Collateral
                  Manager,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                Katonah
                  III, Ltd., by Sankaty Advisors, LLC, as Sub-Advisors,
                  as a Lender

                 

              	
                 

              	
                Katonah
                  IV, Ltd., by Sankaty Advisors, LLC, as Sub-Advisors,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Nash Point CLO,
                  Limited,
                  as a Lender

                 

              	
                 

              	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Nash Point II
                  CLO,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              

      

    

     

    
      
        
           

        

        
          (ii)

          
            

          

        

        
           

        

      

    

    

      
        	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Prospect Funding I,
                  LLC,
                  as a Lender

                 

              	
                 

              	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Race Point CLO,
                  Limited,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Race Point II CLO,
                  Limited,
                  as a Lender

                 

              	
                 

              	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Race Point III CLO,
                  Limited,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for Race Point IV CLO,
                  Ltd.,
                  as a Lender

                 

              	
                 

              	
                SANKATY
                  HIGH YIELD PARTNERS II, L.P.,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                SANKATY
                  HIGH YIELD PARTNERS III, L.P.,
                  as a Lender

                 

              	
                 

              	
                SANKATY
                  ADVISORS, LLC as Collateral Manager for SSS Funding
                  II.,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              	
                By:
                  

              	
                 /s/
                  Alan K. Halfenger 

              	
                 

              
	
                Name:
                  

              	
                Alan
                  K. Halfenger 

              	
                 

              	
                Name:

              	
                Alan
                  K. Halfenger 

              	
                 

              
	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              	
                Its:
                  

              	
                Chief
                  Compliance Officer

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              

      

    

     

    
      
         

      

      
        (iii)

        
          

        

      

      
         

      

    

     

    
      
        	
                SKY
                  CBNA LOAN FUNDING,
                  as
                  a Lender

                 

              	
                 

              	
                WATERSHED
                  CAPITAL PARTNERS, L.P.,
                  as a Lender

              	
                 

              
	
                By:
                  

              	
                /s/
                  David Balmert 

              	
                 

              	
                By:
                  

              	
                /s/
                  Meridee A. Moore 

              	
                 

              
	
                Name:
                  

              	
                David
                  Balmert 

              	
                 

              	
                Name:

              	
                Meridee
                  A. Moore 

              	
                 

              
	
                Its:
                  

              	
                Attorney
                  in Kind 

              	
                 

              	
                Its:
                  

              	
                Senior
                  Managing Member

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                WATERSHED
                  CAPITAL INSTITUTIONAL PARTNERS, L.P.,
                  by
                  WS Partners, L.L.C., its General Partner, as
                  a Lender

                 

              	
                 

              	 	
                 

              
	
                By:
                  

              	
                /s/
                  Meridee A. Moore 

              	
                 

              	 	
                 

              	
                 

              
	
                Name:
                  

              	
                Meridee
                  A. Moore 

              	
                 

              	 	 	
                 

              
	
                Its:
                  

              	
                Senior
                  Managing Member

              	
                 

              	
                 

              	 	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              

      

    

     

    
      
         

      

      
        (iv)

        
          

        

      

      
         

      

    

     

    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.

            

    

     

    
      
        
           

        

        
          (v)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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]