Exhibit
10.35


AGREEMENT


This
Agreement is made as of the 8th day of January, 2007, by and between Friendly
Ice Cream Corporation, a Massachusetts corporation (the “Company”), and George
M. Condos (“Employee”).


WHEREAS,
Employee is currently serving as the Company’s President and Chief Executive
Officer;


WHEREAS,
in consideration for Employee agreeing to continue his employment with the
Company, agreeing to keep Company information confidential and not to compete
with the Company in the event Employee’s employment is terminated and providing
the Company with a release of any potential claims, the Company agrees that
Employee shall receive a similar release from the Company and the compensation
set forth in this Agreement as a cushion against the financial and career
impact on Employee in the event Employee’s employment with the Company is
terminated without cause.


NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth and intending to be legally bound hereby, the
parties hereto agree as follows:


1.             Definitions


“Base
Compensation” shall mean the annualized base rate of salary being paid to
Employee at the time of Employee’s Termination of Employment.


“Cause”
shall mean (1) misappropriation of funds, (2) habitual insobriety or substance
abuse, (3) conviction of a crime involving moral turpitude, or (4) gross
negligence in the performance of duties, which gross negligence has had a
material adverse effect on business, operations, assets, properties or financial
condition of the Company and its Subsidiaries taken as a whole.


“Severance
Period” shall mean the one (1)-year period after Employee’s Termination of
Employment.


“Termination of
Employment” shall mean the termination of Employee’s active employment relationship
with the Company or its parent, Friendly Ice Cream Corporation.


2.             Severance Compensation upon
Termination.   Subject to the
requirements of Section 7 hereof, in the event that Employee’s employment is
terminated by Friendly’s (as defined below) for a reason other than for Cause,
Employee shall be entitled to receive salary continuation payments during the
Severance Period in an aggregate amount equal to the Base Compensation, which
payments shall be paid on Employee’s then
current payment schedule.


Notwithstanding
the foregoing, no such payments shall be provided unless Employee executes, and
does not revoke, an effective written release, complying with all state and
federal 













requirements (the “Release”),
of any and all claims against the Company and all related parties with respect
to all matters arising out of Employee’s employment or the termination thereof.


3.             Confidential Information.  Employee recognizes and acknowledges that, by
reason of his employment by and service to the Company, he has had and will
continue to have access to confidential information of the Company and its
affiliates, including, without limitation, information and knowledge pertaining
to the products and services offered, innovations, designs, ideas, plans, trade
secrets, proprietary information, distribution and sales methods and systems,
sales and profit figure, customer and client lists, and relationships between
the Company and its affiliates and other distributors, customers, clients,
suppliers and others who have business dealings with the Company and its
affiliates (“Confidential Information”). 
Employee acknowledges that such Confidential Information is a valuable
and unique asset and covenants that he will not, either during or after his
employment by the Company, disclose any such Confidential Information to any
person for any reason whatsoever without the prior written authorization of the
Board, unless such information is in the public domain through no fault of
Employee or except as may be required by law or in a judicial or administrative
proceeding.  In the event that Employee
is required to disclose any of the Company’s Confidential Information, Employee
shall provide reasonable notice to the Company and shall provide reasonable
cooperation with any efforts of the Company to oppose such disclosure.


4.             Non-Competition.


(a)           During his employment by the Company
and for a period of one year thereafter unless acting with the prior written
consent of the Board, Employee shall not, directly or indirectly, own, manage,
operate, join, control, finance or participate in the ownership, management,
operation, control or financing of, or be connected as an officer, director,
employee, partner, principal, agent, representative, consultant or otherwise
with or use or permit his name to be used in connection with, those businesses
directly competing with the Company, including, and limited to, Denny’s, IHOP
and Bob Evans. Employee also shall not, directly or indirectly, during such
period (a) solicit or divert business from, or attempt to convert any client,
account or customer of the Company or any of its affiliates, whether existing
at the date hereof or acquired during Employee’s employment nor (b) following
Employee’s employment, solicit or attempt to hire or hire any then employee of
the Employer or of any of its affiliates.


(b)           The foregoing restriction shall not
be construed to prohibit the ownership by Employee of less than five percent
(5%) of any class of securities of any corporation in the family dining segment
having a class of securities registered pursuant to the Securities Exchange Act
of 1934, provided that such ownership represents a passive investment and that
neither Employee nor any group of persons including Employee in any way, either
directly or indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes any part in its
business, other than exercising his rights as a shareholder, or seeks to do any
of the foregoing.


5.             Equitable Relief.  Employee acknowledges that the restrictions
contained in Sections 3 and 4 hereof are reasonable and necessary to protect
the legitimate interests of the Company and its affiliates, that the Company
would not have entered into this Agreement in the 



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absence of such
restrictions, and that any violation of any provision of those Sections will
result in irreparable injury to the Company. 
Employee represents that his experience and capabilities are such that
the restrictions contained in Section 4 hereof will not prevent Employee from
obtaining employment or otherwise earning a living at the same general level of
economic benefit as is currently the case. 
Employee further represents and acknowledges that (i) he has been advised
by the Company to consult his own legal counsel in respect of this Agreement,
and (ii) that he has had full opportunity, prior to execution of this
Agreement, to review thoroughly this Agreement with this counsel.


6.             Notice.  All notices and other communications required
or permitted hereunder or necessary or convenient in connection herewith shall
be in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
services, as follows:


	
  

  	
  If to the Company, to:

  
	
   

  	
   

  
	
   

  	
   

  	
  Friendly Ice Cream Corporation

  
	
   

  	
   

  	
  1855 Boston Road

  
	
   

  	
   

  	
  Wilbraham, MA 01095

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Employee, to:

  
	
   

  	
   

  
	
   

  	
   

  	
  George M. Condos

  
	
   

  	
   

  	
  299 Great Bay Street

  
	
   

  	
   

  	
  East Falmouth, MA 02536

  



 


or to such other names
or addresses as the Company or Employee, as the case may be, shall designate by
notice to the other party hereto in the manner specified in this Section.  Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five days after
deposit; postage prepaid, with the U.S. Postal Service in the case of
registered or certified mail, or on the next business day in the case of
overnight express courier service.


7.             Release of Claims.  Notwithstanding any provision contained
herein, Employee’s right to receive payments hereunder is expressly conditioned
upon Employee’s execution of an agreement to release claims, which agreement
shall contain, in part, the following provision:


 “Employee, on
his behalf, his spouse, heirs, agents, attorneys, representatives and assigns,
hereby releases and discharges forever all claims and causes of action of every
name and nature that have arisen or might have arisen at any time up to and
including the date on which you sign this Agreement (whether known or unknown,
accrued, contingent, or liquidated) that you now have or may have against
Friendly Ice Cream Corporation, any of its subsidiaries, divisions, parents and
affiliates (collectively, “Friendly’s”), or any of the aforementioned entities’
agents, employees, directors, and officers, including but not limited to, any
claims relating to your employment with Friendly’s and the termination thereof;
any claims based on statute, regulation, ordinance, 



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contract or tort; any claims arising under the Age
Discrimination in Employment Act of 1967, as amended (the “ADEA”), or any other
federal, state, or local law relating to employment discrimination, harassment,
or retaliation; any claims relating to wages, compensation, or benefits; and any
related claims for attorney’s fees.”


8.             Miscellaneous.


(a)           All
section headings are for convenience only. 
This Agreement may be executed in several counterparts, each of which is
an original.  It shall not be necessary
in making proof of this Agreement or any counterpart hereof to produce or
account for any of the other counterparts.


(b)           Nothing
in this Agreement shall be construed as giving Employee any right to be
retained in the employ of the Company. 
Employee is and will remain an employee at will.


(c)           If
any provision of this Agreement or application thereof to anyone or under any
circumstances shall be determined to be invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provisions or
applications of this Agreement which can be given effect without the invalid or
unenforceable provision or application.


(d)           This
Agreement shall be governed by and interpreted under the laws of the State of
Delaware without giving effect to any conflict of laws provisions.


IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Agreement as of the date first above written.


	
  

  	
  FRIENDLY ICE CREAM CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald N. Smith

  
	
   

  	
   

  	
  Donald N. Smith, Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ George M. Condos

  
	
   

  	
   

  	
  George M. Condos

  



 


 



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