Buffets Holdings, Inc. Executes Amendment to DIP Credit Agreement

EAGAN, Minn.--(BUSINESS WIRE)--Buffets Holdings, Inc. today announced that it has executed a third amendment to the Debtor-in-Possession (DIP) Credit Agreement with its lenders. Subject to the approval of the Bankruptcy Court, this amendment secures Buffets’ financing through April 30, 2009, with a possible extension to May 31, 2009, and keeps the company on track to exit Chapter 11 protection during the first calendar quarter of 2009. The amendment also waives breaches under the DIP agreement and makes necessary adjustments to ongoing covenants. Buffets intends to make a partial prepayment of the DIP facility upon court approval of the amendment.

As previously reported, earlier this month Buffets entered into a forbearance agreement with its lenders by which the lenders will forbear from exercising their default-related rights and remedies with respect to the breach of the minimum consolidated EBITDA covenant in the DIP agreement for the fiscal period ending October 22, 2008 through the Forbearance Period. In accordance with the terms of the Second DIP Forbearance Agreement, the Forbearance Period has been further extended to allow for the Bankruptcy Court to consider approval of the proposed DIP Credit Agreement amendment. Buffets will ask the Court to conduct a hearing to consider the third amendment to the DIP facility on December 16, 2008.

Mike Andrews, Chief Executive Officer of Buffets Holdings, said, “We are pleased to have reached this agreement with our lenders to address needed changes to our DIP facility and to extend its maturity. We remain on schedule to emerge from bankruptcy in the first calendar quarter of 2009, and we will do so with substantially less debt and a more efficient corporate structure. We appreciate the continued loyalty of our associates, customers, suppliers, and business partners as we navigate this process.”

Buffets Holdings, Inc. and all of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on January 22, 2008. More information about Buffets Holdings’ reorganization is available in the Company Information section of the Company’s Web site at www.Buffet.com. Claims information and court filings, including the proposed Plan of Reorganization and Disclosure Statement, are available at http://chapter11.epiqsystems.com/buf.

About Buffets Holdings

Buffets Holdings is the parent company of Buffets, Inc., the nation’s largest steak-buffet restaurant company, which currently operates 546 restaurants in 38 states, comprised of 536 steak-buffet restaurants and 10 Tahoe Joe’s Famous Steakhouse® restaurants, and franchises 14 steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet®, HomeTown Buffet®, Ryan’s® and Fire Mountain® brands. Buffets, Inc. employs more than 30,000 team members and serves more than 160 million customers annually. For more information about the Company, please visit our websites at www.Buffet.com and www.Ryansrg.com.

Safe Harbor Statement

The statements contained in this press release that are not historical facts are forward-looking statements, including references to the Company's plans in the context of a bankruptcy reorganization. These and other forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, the forward looking statements. Factors that may cause actual results to differ from the forward-looking statements in general are described in the "Risk Factors / Forward-Looking Statements" section in Buffets Holdings' Form 10-K filed with the Securities and Exchange Commission on September 30, 2008 and Form 10-Q filed with the Securities and Exchange Commission on November 6, 2008. The statements in this release reflect Buffets Holdings' current beliefs based upon available information. Developments subsequent to this release are likely to cause these statements to become outdated, and no obligation is undertaken to update the information.