Document:

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                                                                EXHIBIT 10.1

                               [O'CHARLEY'S LOGO]

                                O'CHARLEY'S INC.

                              DEVELOPMENT AGREEMENT

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                                TABLE OF CONTENTS

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<S>                                                                          <C>
ARTICLE I Grant................................................................2

ARTICLE II Fees................................................................4

ARTICLE III Schedule and Manner for Exercising Development Rights..............5

ARTICLE IV Prerequisites to Obtaining Licenses................................11

ARTICLE V Term................................................................13

ARTICLE VI Duties of Developer................................................14

ARTICLE VII Default and Termination...........................................18

ARTICLE VIII Transfer of Interest.............................................23

ARTICLE IX Covenants..........................................................29

ARTICLE X Independent Contractor and Indemnification..........................32

ARTICLE XI Approvals..........................................................33

ARTICLE XII Non-Waiver and Remedies...........................................33

ARTICLE XIII Notices..........................................................34

ARTICLE XIV Severability and Construction.....................................34

ARTICLE XV Entire Agreement; Applicable Law...................................35

ARTICLE XVI Acknowledgments...................................................38
</TABLE>

<TABLE>
<S>             <C>                                                        <C>
Attachment A    Operating Agreement.........................................A-1
Attachment B    Lease Rider.................................................B-1
Attachment C    Confidentiality And Non-Compete Agreement...................C-1
Attachment D    Statement Of Ownership Interests and Principal..............D-1
Attachment E    Guaranty....................................................E-1
</TABLE>

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                                O'CHARLEY'S INC.

                              DEVELOPMENT AGREEMENT

         THIS DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into
this 28th day of March, 2005, by and among O'Charley's Inc., a Tennessee
corporation ("Licensor"), Four Star Restaurant Group, LLC, a Nebraska limited
liability company ("Developer"), Michael R. Johnson, an individual, 419 Elm
Street, Uehling, Nebraska 68063 (the "Controlling Principal").

                                   WITNESSETH:

         WHEREAS, Licensor, as a result of the expenditure of time, skill,
effort and money, has developed and owns the rights to develop and operate a
unique system of full service varied menu casual dining restaurants which
feature freshly prepared items such as hand-cut and aged steaks, fresh chicken,
seafood, homemade yeast rolls and fresh-cut salads with special recipe dressings
and which serve alcoholic beverages through a full-service bar all under the
trademark O'Charley's(R) (the "System");

         WHEREAS, the distinguishing characteristics of the System include,
without limitation, distinctive exterior and interior design, decor, color
schemes, awnings, neons and furnishings, special recipes and menu items, uniform
standards, specifications and procedures for operations, quality and uniformity
of products and services offered, procedures for inventory management and
financial control, training and assistance, and advertising and promotional
programs, all of which may be changed, improved and further developed by
Licensor from time to time;

         WHEREAS, Licensor identifies the System by means of certain trade
names, service marks, trademarks, emblems and indicia of origin, including, but
not limited to, the mark O'Charley's(R) and such other trade names, service
marks and trademarks as are now designated (and may hereafter be designated by
Licensor in writing) for use in connection with the System (the "Proprietary
Marks");

         WHEREAS, Licensor continues to develop, use and control the use of such
Proprietary Marks in order to identify for the public the source of services and
products marketed thereunder and under the System, and to represent the System's
high standards of quality, appearance and service;

         WHEREAS, the value of Licensor's Proprietary Marks is based upon: (a)
the maintenance of uniform high quality standards in connection with the
preparation and sale of Licensor-approved food and beverage products; (b) the
uniform high standards of appearance of the individual restaurant units in the
System; (c) the use of distinctive Proprietary Marks, building designs and
advertising signs representing a uniformly high quality of products and
services; and (d) the assumption by its franchisees of the obligation to
maintain and enhance the goodwill and public acceptance of the System and of the
Proprietary Marks by strict adherence to the high standards required by
Licensor; and

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         WHEREAS, Developer wishes to obtain certain development rights to
operate one (1) or more full-service O'Charley's restaurants (each, a
"Restaurant" or "Licensed Business," and together, the "Restaurants" or
"Licensed Businesses") under the System in the territory described in this
Development Agreement.

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

                                    ARTICLE I
                                      GRANT

         A. In reliance on the representations, warranties, covenants and
agreements of Developer and its Controlling Principal hereunder, Licensor hereby
grants to Developer and Developer hereby accepts, pursuant to the terms and
conditions of this Agreement, the right and obligation to develop the number of
Restaurants described in the Development Schedule (as defined below) solely
within the geographic area(s) described on Schedule 1 hereto (collectively the
"Territory"). Developer may be granted rights to develop additional Restaurants
in Licensor's sole discretion. Any and all such rights to develop Restaurants
are subject to Developer's full compliance with all conditions precedent to the
grant of such rights outlined in this Agreement, and any such rights shall be
exercised in accordance with Article III.

         B. Developer acknowledges and understands that the rights granted
hereunder are for the development of full-service O'Charley's restaurants.
Except as provided in this Agreement, and subject to Developer's full compliance
with this Agreement and any other agreements among Developer, or any of its
Affiliates and Licensor or any of its Affiliates, neither Licensor nor its
Affiliates shall establish or authorize any other person or any other
corporation, limited liability company, partnership, limited partnership, joint
venture, association, trust, unincorporated association or any other business
entity (each, an "Entity"), other than Developer, to establish a Restaurant in
the Territory during the term of this Agreement. Notwithstanding the above,
Developer acknowledges and agrees that Licensor and its Affiliates operate
restaurants under the trademark O'Charley's(R) and further agrees and
acknowledges that the rights granted hereby are only for the development and
operation of one (1) or more full-service O'Charley's restaurants, and,
therefore, Licensor and its Affiliates may conduct (or authorize one or more
third parties to conduct) the following activities:

                  (1) Licensor, its Affiliates, any O'Charley's developer or
operator and any other authorized person or Entity shall have the right, at any
time, to advertise and promote the System, and fill customer orders by providing
catering and/or delivery services in the Territory.

                  (2) Licensor and its Affiliates may offer and sell (or may
authorize others to offer and sell) collateral and ancillary products and
services under the Proprietary Marks which may be similar to those offered by
the Restaurants in the Territory if offered and sold other than through a
full-service O'Charley's restaurant, such as pre-packaged food products,
t-shirts and O'Charley's memorabilia.

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                  (3) Subject to the requirements of Section I(B)(4), Licensor
and its Affiliates may (a) offer and sell in the Territory (or may authorize
others to offer and sell) such products and services under the Proprietary Marks
through any permanent, temporary or seasonal food service facility (e.g., a
kiosk, concession or multi-brand facility) that will provide a limited number or
representative sample of the products and services normally offered by, and be
located in a smaller facility than, a full-service O'Charley's restaurant
("Alternative Distribution Facilities"), or (b) operate (or authorize others to
operate) in the Territory a full-service O'Charley's restaurant or other similar
food service facilities offering the same products and services offered by a
full-service O'Charley's restaurant or an Alternative Distribution Facility in
any area of retail sales establishments, food courts, transportation facilities
(e.g., airports, train stations, bus terminals or port authorities), hospitals
and other healthcare facilities, cafeterias, commissaries, schools, hotels,
sports and entertainment facilities (e.g., stadiums, arenas, ball parks or
convention centers) and other mass gathering locations or events designated by
Licensor (each, an "Excluded Area").

                  (4) Licensor shall first offer to Developer the right to open
and operate (a) an O'Charley's restaurant in an Excluded Area within the
Territory (each, an "Excluded Area Restaurant"), or (b) an Alternative
Distribution Facility within the Territory, in each such case on such terms and
conditions as such arrangements may be offered to third parties as determined by
Licensor or any other third party involved in the arrangement such as an airport
or stadium authority, educational institution or other facilities operator
(each, a "Facilities Operator"), as applicable; provided, however, that to be
eligible to receive such offer, Developer must (x) not be in default under this
Agreement or any Operating Agreement executed pursuant to this Agreement, and
(y) meet each of the conditions outlined in Section IV(B) and any other criteria
and qualifications deemed necessary by Licensor or any Facilities Operator to
open and operate such Excluded Area Restaurant or Alternative Distribution
Facility. If Developer does not meet any of the criteria or qualifications
required by Licensor or the Facilities Operator, then Developer shall have no
right to open and operate, or to receive an offer to open and operate, the
Excluded Area Restaurant or the Alternative Distribution Facility, and Licensor
may conduct such business, or authorize any other person or Entity to do so. If
Developer meets all of the conditions, criteria and qualifications required by
Licensor and the Facilities Operator, Licensor shall offer to Developer the
right to open and operate such Excluded Area Restaurant or Alternative
Distribution Facility. Developer shall have thirty (30) days after receipt of
written notification of any such offer from Licensor in which to accept such
offer. If Developer fails to notify Licensor in writing of Developer's intent to
accept the offer within such thirty (30) day time period, Licensor may conduct
such business itself, or authorize any other person or Entity to do so.

                  (5) Licensor and its Affiliates may offer and sell (or may
authorize others to offer and sell) products and services under any other names
and marks.

                  (6) Licensor, its Affiliates, any O'Charley's restaurant
developer or operator and any other authorized person or Entity may establish
and operate a full-service O'Charley's restaurant anywhere outside of the
Territory regardless of proximity to the Territory or the Location (as defined
in the Operating Agreement) of any O'Charley's Restaurant operated by Developer.

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         C. This Agreement is not a franchise or license agreement and does not
grant to Developer any right or license to operate a Restaurant, distribute
goods or services, or any right to use or interest in the Proprietary Marks
(such right and license being granted only pursuant to the Operating Agreement
applicable to individual Restaurants as such Operating Agreement may be entered
into and become effective pursuant to this Agreement and such Operating
Agreement).

         D. After this Agreement expires or is terminated, Licensor shall have
the complete and unrestricted right to operate or license other persons to
operate one or more restaurants utilizing the System in the Territory (except at
Locations for which Developer has a then outstanding and effective Operating
Agreement).

                                   ARTICLE II
                                      FEES

         A. Simultaneously with the execution of this Agreement, Developer shall
pay Licensor an initial development fee of Ten Thousand Dollars ($10,000) for
each Restaurant to be developed pursuant to this Agreement.

         B. Developer acknowledges that the development fees being paid to
Licensor simultaneously with the execution of this Agreement are being paid in
partial consideration of the administrative and other expenses incurred by
Licensor in connection with the development rights granted hereunder and for its
lost or deferred opportunity to grant such rights to any other party. Developer
acknowledges that no part of such fees shall be refunded to Developer under any
circumstances, even if no Restaurants are opened by Developer under this
Agreement, and that Developer shall have no right to recover from Licensor,
directly or indirectly, any of such portion of the development fees.

         C. Pursuant to its obligations hereunder and under the applicable
Operating Agreements, Licensor will make various expenditures in connection with
the development of prospective Restaurant sites by Developer, including
expenditures for travel, lodging and meals. Developer shall promptly notify
Licensor of a decision to cease development of a prospective Restaurant site. In
the event that Developer fails to open a Restaurant at any such site, Developer
shall reimburse Licensor for Licensor's expenditures with respect to that site.
In such event, Licensor shall provide Developer with an itemized list of
Licensor's expenditures with respect to that site within sixty (60) days after
Licensor receives notice that Developer no longer intends to develop a
Restaurant at that site, and Developer shall reimburse Licensor for such
expenditures within thirty (30) days after receiving such list.

         D. Developer shall not be entitled to withhold payments due Licensor
under this Agreement on grounds of alleged nonperformance by Licensor hereunder.
Any payment not actually received by Licensor on or before the date due shall be
deemed overdue. Time is of the essence with respect to all payments to be made
by Developer to Licensor. All unpaid obligations under this Agreement shall bear
interest from the date due until paid at the lesser of (1) the prime commercial
rate of interest as reported in the Wall Street Journal (Southeastern edition)
from time to time or by any bank or financial institution designated from time
to time by Licensor for short term unsecured loans to substantial and
responsible commercial borrowers,

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plus three percent (3%), or (2) the maximum rate allowed by applicable law.
Notwithstanding anything to the contrary contained herein, no provision of this
Agreement shall require the payment or permit the collection of interest in
excess of the maximum rate allowed by applicable law. If any excess of interest
is provided for herein, or shall be adjudicated to be so provided in this
Agreement, the provisions of this paragraph shall govern and prevail, and
neither Developer nor its Principal shall be obligated to pay the excess amount
of such interest. If for any reason interest in excess of the maximum rate
allowed by applicable law shall be deemed charged, required or permitted, any
such excess shall be applied as a payment and reduction of any other amounts
which may be due and owing hereunder, and if no such amounts are due and owing
hereunder then such excess shall be repaid to the party that paid such interest.

         E. Developer acknowledges that the Development Period extension fees in
Article III and the transfer fee in Section VIII(B)(2)(j) may, in Licensor's
sole discretion, be increased annually effective January 1 of each year
beginning on January 1 of the year following the date of this Agreement, by an
amount equal to the annual percentage increase during the preceding calendar
year in the Consumer Price Index---All Consumers (All Items)---United States
City Average, as compiled and published by the United States Department of
Labor, or such comparable successor index as may be designated by Licensor from
time to time.

                                  ARTICLE III
              SCHEDULE AND MANNER FOR EXERCISING DEVELOPMENT RIGHTS

         A. Developer shall enter into a separate Operating Agreement with
Licensor for each Restaurant for which a development right is granted. The
Operating Agreement to be executed for each Restaurant to be developed under
this Agreement shall be in the form of the Operating Agreement attached hereto
as Attachment A.

         B. (1) Acknowledging that time is of the essence, and subject to the
requirements of Article IV, Developer agrees to exercise its development rights
according to the development schedule set forth on Schedule 1 hereto (the
"Development Schedule"), which schedule designates the number of Restaurants in
the Territory to be established and in operation by Developer upon the
expiration of each of the designated development periods (the "Development
Periods").

                  (a) Developer shall have the obligation to develop each
Restaurant within the Territory during the Development Periods. If Developer has
developed the Restaurant(s) required in the applicable Development Period in
accordance with the Development Schedule and continues to meet the conditions
set forth in Article IV, Developer shall have the right and obligation to
develop the Restaurant(s) required during the next applicable Development
Period. Developer acknowledges that compliance with its development obligations
in each Development Period described above and continued compliance with Article
IV is a condition precedent to the receipt of such additional development
rights. If Developer fails to meet its development obligations or fails to
comply with the Operational Approval, Financial Approval, Legal Approval and
Ownership Approval requirements in Article IV, the conditions to the receipt of
those further development rights shall not have been met, and Developer shall
have no further rights to develop Restaurants hereunder.

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                  (b) During any of the Development Periods set forth above,
subject to the terms and conditions of this Agreement, Developer, with
Licensor's prior written consent (which consent may be withheld in Licensor's
sole discretion), may develop more than the total minimum number of Restaurants
which Developer is required to develop during that Development Period.
Notwithstanding the above, Developer shall not open or operate more than the
cumulative total number of Restaurants Developer is obligated to develop under
this Agreement as set forth above in the Development Schedule without Licensor's
consent, which may be withheld in Licensor's sole discretion. Any Restaurants
developed during a Development Period in excess of the minimum number of
Restaurants required to be developed upon expiration of that Development Period,
shall be applied to satisfy Developer's development obligation during the next
succeeding Development Period, if any.

         (2) If during the term of this Agreement, Developer ceases to operate
any Restaurant developed under this Agreement for any reason, Developer shall
develop a replacement Restaurant to fulfill Developer's obligation to have open
and in operation the required number of Restaurants upon the expiration of each
Development Period. The replacement Restaurant shall be developed within the
Territory and within a reasonable time to be determined by Licensor after
Developer ceases to operate the Restaurant to be replaced. If during the term of
this Agreement, Developer, in accordance with the terms of any Operating
Agreement for a Restaurant developed under this Agreement, transfers its
interest in such Restaurant, the transferred Restaurant shall continue to be
counted in determining whether Developer has complied with the Development
Schedule so long as it continues to be operated as an O'Charley's restaurant and
the transfer of the Restaurant is made in accordance with Article VIII of this
Agreement. If the transferred Restaurant ceases to be operated as an O'Charley's
restaurant during the term of this Agreement, Developer shall develop a
replacement Restaurant within the Territory and within a reasonable time to be
determined by Licensor after the transferred Restaurant ceases to be operated as
an O'Charley's restaurant. In either case, the reasonable time period shall
apply to the development of the replacement Restaurant only. In Licensor's sole
discretion, however, Licensor may extend the term of the applicable Development
Period; provided, however, that in no event shall such time period exceed three
(3) months; and, provided, further, that such agreed time period shall not
extend the term of this Agreement. In addition, Developer shall be required to
pay to Licensor a lost revenue fee for any Restaurant that ceases to be operated
as an O'Charley's restaurant. The lost revenue fee shall be an amount equal to
the amount of revenue that Licensor would have received from Developer during
the period between the closing of the Restaurant and the opening of the
replacement Restaurant had the original Restaurant never closed. The lost
revenue fee shall be determined by multiplying (x) by (y) where (x) equals the
number of Accounting Periods (both complete and partial) between the closing of
the Restaurant and the opening of the replacement Restaurant and (y) equals the
greater of: (i) the closed Restaurant's Gross Sales (as that term is defined in
the Operating Agreement) for its last full Accounting Period of operation, or
(ii) the average of the Restaurant's last twelve (12) Accounting Periods (or
such shorter period the Restaurant has been operating) of Gross Sales. For
purposes of this Agreement, the term "Accounting Period" shall mean the
accounting period for the Restaurant as established by Licensor from time to
time and described in the Manuals.

         (3) Developer shall open each Restaurant developed hereunder and shall
commence business in accordance with the Development Schedule described in this
Article III.

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                  (a) Developer may request in writing that Licensor extend the
 Development Period of any one Restaurant to permit Developer to complete
construction and begin operation of such Restaurant. If Licensor determines, in
its sole discretion, to grant any such request, the applicable Development
Period shall be extended for a period of thirty (30) days (each such 30-day
period being referred to as an "Extension Period"). Developer's initial written
request for an extension must be received by Licensor no later than sixty (60)
days prior to the end of the Development Period for that Restaurant, and such
written request must include a description of the reasons for Developer's
failure to develop in a timely manner and the date that Developer expects to
complete construction and opening of the Restaurant. During an Extension Period,
any written request for a subsequent Extension Period for that Restaurant must
be received by Licensor no later than fifteen (15) days prior to the end of the
Extension Period for that Restaurant, and such written request must include a
description of the reasons for Developer's failure to develop in a timely manner
and the date that Developer expects to complete construction and opening of the
Restaurant.

                  (b) If Developer has agreed to develop five (5) or more
Restaurants hereunder, unless otherwise agreed to by Licensor, in Licensor's
sole and absolute discretion, Developer shall not be entitled to more than three
(3) Extension Periods for any one Restaurant, nor more than six (6) Extension
Periods during the term of this Agreement. If Licensor permits a fourth (4th)
Extension Period for any one Restaurant, Developer must pay Licensor an
extension fee of Ten Thousand Dollars ($10,000) at the beginning of such
Extension Period, plus another Ten Thousand Dollar ($10,000) extension fee at
the beginning of each Extension Period Licensor approves thereafter until such
Restaurant has begun operation. If Licensor permits a seventh (7th) Development
Period, Developer must pay Licensor an extension fee of Ten Thousand Dollars
($10,000) at the beginning of such Extension Period, plus another Ten Thousand
Dollar ($10,000) extension fee at the beginning of each Extension Period
Licensor approves thereafter until such Restaurant has begun operation. No
extension of any Development Period will affect the duration of any Development
Period for any other Restaurant or any of Developer's other development
obligations hereunder.

                  (c) If Developer has agreed to develop four (4) or fewer
Restaurants hereunder, unless otherwise agreed to by Licensor, in Licensor's
sole and absolute discretion, Developer will be permitted no more than three (3)
Extension Periods during the term of this Agreement. If Licensor permits a
fourth (4th) Extension Period, Developer must pay Licensor an extension fee of
Ten Thousand Dollars ($10,000) at the beginning of such Extension Period, plus
another Ten Thousand Dollar ($10,000) extension fee at the beginning of each
Extension Period Licensor approves thereafter until such Restaurant has begun
operation. No extension of any Development Period will affect the duration of
any Development Period for any other Restaurant or any of Developer's other
development obligations hereunder.

         C. Developer acknowledges that the projected opening dates ("Projected
Opening Dates") for each Restaurant set forth on Schedule 1 hereto are
reasonable and consistent with the requirements of the Development Schedule.
Subject to Developer's compliance with Article IV hereof, Developer shall
execute an Operating Agreement for each Restaurant no later than six (6) months
prior to the Projected Opening Date for the applicable Restaurant.

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         D. Developer assumes all cost, liability, expense and responsibility
for locating, obtaining and developing sites for each Restaurant, and for
constructing and equipping each Restaurant at each such site. Developer shall
not make any binding commitment to a prospective vendor or lessor of real estate
with respect to a site for a Restaurant unless the site is accepted as set forth
below. Developer acknowledges that the location, selection, procurement and
development of a site for each Restaurant is Developer's responsibility; that in
discharging such responsibility Operator may consult with real estate and other
professionals of Developer's choosing; and that Licensor's acceptance of a
prospective site and the rendering of assistance in the selection of a site does
not constitute a representation, promise, warranty or guarantee, express or
implied, by Licensor that the Restaurant operated at that site will be
profitable or otherwise successful.

            (1) In connection with the development of each Restaurant hereunder,
Licensor shall do the following:

                  (a) Licensor shall provide Developer with written site
selection guidelines, which may be found within the Manuals or may otherwise be
communicated to Developer, and such site selection assistance as Licensor may
deem advisable.

                  (b) Licensor shall provide such on-site evaluation as Licensor
may deem necessary on its own initiative or in response to Developer's
reasonable request for site acceptance; provided, however, that Licensor shall
not provide an on-site evaluation for any proposed site prior to the receipt of
all required information and materials concerning such site prepared pursuant to
Section (III)(D)(2)(a). Licensor (or its designee) will provide at no additional
charge to Developer three (3) on-site evaluations for each of the first three
(3) Restaurants to be developed hereunder, and one (1) on-site evaluation for
each additional Restaurant to be developed hereunder. If additional on-site
evaluations are deemed appropriate by Licensor, or upon Developer's reasonable
request, Licensor reserves the right to charge a fee for each such evaluation
representing the reasonable expenses incurred by Licensor (or its designee) in
connection with such on-site evaluation, including, without limitation, the cost
of travel, lodging and meals.

                  (c) Licensor shall loan to Developer a set of prototypical
architectural and design plans and specifications for an O'Charley's Restaurant.

         (2) (a) Developer shall locate a site for the Restaurant that satisfies
the Licensor's written site selection guidelines. Developer shall submit to
Licensor, in the form specified by Licensor in the Manuals, a fully completed
site selection acceptance request package which shall include a description of
the site, evidence satisfactory to Licensor demonstrating that the site
satisfies Licensor's current site selection guidelines and criteria, a letter of
intent or other evidence satisfactory to Licensor which confirms Developer's
favorable prospects for obtaining the site, together with such other information
and materials as required in the Manuals or as Licensor may otherwise reasonably
require. Recognizing that time is of the essence, Developer agrees that it will
submit each such fully completed site selection acceptance request package and
materials for the proposed site to Licensor for its acceptance at such time and
in accordance with such procedures as are set forth in the Manuals, or which are
otherwise communicated to Developer by Licensor. Licensor shall have thirty (30)
days after receipt of

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this information and materials to accept or reject, in its sole discretion, the
proposed site as the location for the Restaurant. In the event Licensor rejects
the proposed site, Licensor may submit to Operator a document outlining the
reasons why Licensor rejected the proposed site. No site may be used for the
location of the Restaurant unless it is first accepted in writing by Licensor.

                  (b) After a location for the Restaurant is accepted by
Licensor and acquired by Developer, the Location shall be described in
Attachment A to the Operating Agreement that will be executed by Developer in
connection with such Restaurant, which description shall be the legal
description and/or street address of the site at which the Restaurant is to be
located.

         (3) At least six (6) months prior to the Projected Opening Date for
such Restaurant, Developer shall acquire by purchase or lease, at Developer's
expense, the site for the Restaurant as set forth below.

                  (a) If Developer intends to purchase the premises for the
Restaurant, Developer shall submit a copy of the proposed contract of sale to
Licensor for its written acceptance prior to Developer's execution of such
contract and shall furnish to Licensor a copy of the executed contract of sale
within ten (10) days after execution. If Developer intends to occupy the
premises of the Restaurant under a lease, Developer shall submit a copy of the
proposed lease to Licensor for Licensor's written acceptance prior to
Developer's execution of such lease and shall furnish to Licensor a copy of the
executed lease within ten (10) days after execution. No lease for the Restaurant
premises shall be accepted by Licensor unless a rider to the lease, prepared by
Licensor and executed by Licensor, Developer and the lessor, in substantially
the form attached as Attachment B, is attached to the lease and incorporated
therein. Licensor shall have thirty (30) days after receipt of the proposed
lease or the proposed contract of sale to either accept, reject or propose
amendments to such documentation prior to its execution. If Licensor fails to
notify Developer of an objection to the proposed lease or the proposed contract
of sale within this time period, Developer may use such lease or contract of
sale; provided, however, the proposed contract or lease satisfies Licensor's
then current criteria and requirements for contracts or leases outlined in the
Manuals or as otherwise communicated to Developer by Licensor. These criteria
and requirements may include financial requirements, specific lease requirements
or other requirements that Licensor deems necessary. Licensor retains the right
to vary from any requirement, add new requirements or make exceptions to any
requirements in Licensor's sole discretion.

                  (b) Developer shall be responsible for obtaining all zoning
classifications and clearances which may be required by state or local laws,
ordinances or regulations or which may be necessary as a result of any
restrictive covenants relating to the Restaurant premises. Prior to beginning
the construction of the Restaurant, Developer shall (i) obtain all permits,
licenses and certifications (including licenses and permits to sell alcoholic
beverages at the Restaurant) required for the lawful construction or remodeling
and operation of the Restaurant (provided, however, that if a liquor license
cannot be obtained before a Certificate of Occupancy is granted, then Developer
shall use its best efforts to obtain the liquor license as soon as possible
thereafter, and shall keep Licensor fully informed of the status of Developer's
application for the liquor license), and (ii) certify in writing to Licensor
that the insurance coverage specified in Article XIII of the Operating Agreement
is in full force and effect and that

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all required approvals, clearances, permits and certifications (including
alcoholic beverage licenses and permits) have been obtained. Upon request,
Developer shall provide to Licensor additional copies of Developer's insurance
policies or certificates of insurance and copies of all such approvals,
clearances, permits and certifications.

                  (c) Developer must independently obtain any architectural,
engineering and design services it deems necessary for the construction of the
Restaurant at its own expense from an architectural design firm, which Licensor
reserves the right to approve. Developer shall adapt the prototypical
architectural and design plans and specifications for construction of the
Restaurant provided to Developer by Licensor as necessary for the construction
of the Restaurant and shall submit such adapted plans to Licensor for review. If
Licensor determines, in its sole discretion, that any such plans do not satisfy
Licensor's architectural or design standards and specifications for a
full-service O'Charley's restaurant or are not consistent with the best
interests of the System, Licensor may prohibit the implementation of such plans,
and in this event will notify Developer of any objection(s) within thirty (30)
days of receiving such plans or such other time period as may be specified in
the Manuals. If Licensor fails to notify Developer of an objection to the plans
within this time period, Developer may use such plans, provided such plans
satisfy Licensor's then current architectural and design standards and
specifications for a full-service O'Charley's restaurant. If Licensor objects to
any such plans, it shall provide Developer with a reasonably detailed list of
changes necessary to make the plans acceptable. Licensor shall, upon a
resubmission of the plans with such changes, notify Developer within thirty (30)
days of receiving the resubmitted plans whether the plans are acceptable. If
such changes are not acceptable, Licensor shall notify Developer of such
objections as described above, and Developer shall resubmit such plans in
accordance with the procedures described above until such plans are accepted by
Licensor. If Licensor fails to notify Developer of any objection within such
time period, Developer may use the resubmitted plans. Developer acknowledges
that acceptance by Licensor of such plans does not constitute a representation,
warranty or guarantee, express or implied, by Licensor that such plans are free
of architectural or any design errors and thus, Licensor shall have no liability
to Developer or any other party with respect thereto.

                  (d) Prior to commencement of construction, Developer must
submit all requested information, including, but not limited to, architectural
and design plans, construction schedules and current budgets in accordance with
Licensor's request. As time is of the essence, Developer shall timely commence
and diligently pursue construction of the Restaurant. Commencement of
construction shall be defined as the time at which any site work is initiated by
or on behalf of Developer at the Location accepted for the Restaurant. Site work
includes, without limitation, paving of parking areas, installing outdoor
lighting and sidewalks, extending utilities and demolishing of any existing
premises, depending on whether the accepted Location for the Restaurant is
freestanding. During the time of construction or remodeling, Developer shall
provide Licensor with such periodic reports regarding the progress of the
construction or remodeling as may be reasonably requested by Licensor or as
required in the Manuals. In addition, Licensor shall make such on-site
inspections as it may deem reasonably necessary to evaluate such progress. If
during such inspections Licensor identifies instances where Developer's
construction is inconsistent with, or does not meet, Licensor's standards,
Licensor shall notify Developer in writing of such deficiencies, and Developer
shall correct such deficiencies prior to opening the Restaurant. Developer shall
notify Licensor of the scheduled

                                       10
<PAGE>

date for completion of construction no later than sixty (60) days prior to such
date. Within a reasonable time after the date of completion of construction,
Licensor shall, at its option, conduct an inspection of the completed
Restaurant. Developer acknowledges and agrees that Developer will not open the
Restaurant for business without written authorization of Licensor and that
authorization to open shall be conditioned upon Developer's strict compliance
with this Agreement.

                                   ARTICLE IV
                       PREREQUISITES TO OBTAINING LICENSES

         A. Developer and Controlling Principal understand and acknowledge that
the rights and duties set forth in this Agreement are personal to Developer and
its Controlling Principal (as applicable), are non-delegable and non-assignable,
and that Licensor has granted such rights in reliance on the business skill,
financial capacity and personal character of and expectations of performance of
the duties hereunder by Developer and Controlling Principal. Developer and
Controlling Principal have represented to Licensor that they have entered this
Agreement for the purpose of fully complying and with the intention to fully
comply with the Restaurant development obligations hereunder and not for the
purpose of reselling the development rights granted herein. Developer and
Controlling Principal understand and agree that this Agreement does not confer
upon Developer a right to develop or license to operate any Restaurant, but is
intended by the parties to set forth the terms and conditions which, if fully
satisfied by Developer, shall entitle Developer to obtain the right to develop
and operate each Restaurant under an Operating Agreement within the Territory.

         B. In the event that Developer shall have obtained Licensor's
acceptance of a particular proposed site for a Restaurant and shall have paid to
Licensor all of the development fees due under this Agreement and all of the
license fees due under the applicable Operating Agreement, and if Licensor, in
the exercise of its sole and absolute discretion, has granted Developer, in
writing, "Operational Approval," "Financial Approval," "Legal Approval" and
"Ownership Approval" (collectively the "Conditions"), then Licensor will grant
Developer a license to operate a Restaurant at the site in question. As used
herein, Licensor will give Developer Operational Approval, Financial Approval,
Legal Approval and Ownership Approval under the following circumstances:

                  (1) Operational Approval will be granted if Licensor has
determined, in the exercise of its sole discretion, that:

                           (a) Developer is in compliance with the Development
Schedule (including any extensions approved by Licensor in writing) and this
Agreement and has opened each Restaurant as required under the Development
Schedule (including any extensions approved by Licensor in writing);

                           (b) Developer and its Affiliates are in compliance
with any other agreement between Developer and its Affiliates and Licensor and
its Affiliates;

                                       11
<PAGE>

                  (c) Developer is conducting the operation of its existing
Restaurants, if any, and is capable of conducting the operation of each proposed
Restaurant required under the Development Schedule:

                           (i) in accordance with the terms and conditions of
                  the Agreement and any amendments thereto;

                           (ii) in accordance with the provisions of the
                  respective Operating Agreements and any amendments thereto;
                  and

                           (iii) in accordance with the standards,
                  specifications and procedures:

                                    (A) set forth and described in the Manuals
                       (as defined in the Operating Agreement), as such Manuals
                       may be amended from time to time;

                                    (B) as evaluated by Licensor, in its sole
                       discretion, in accordance with the evaluation programs
                       outlined in the Manuals; or

                                    (C) as otherwise set forth by Licensor in
                       writing.

         (2) Developer acknowledges and agrees that it is vital to Licensor's
interest that each of its operators be financially sound to avoid failure of an
O'Charley's restaurant and that such failure would adversely affect the
reputation and good name of Licensor and the System. In accordance with the
foregoing criteria, Financial Approval will be granted if:

                  (a) Developer and Controlling Principal satisfy Licensor's
then-current financial criteria for developers and controlling Principal of
O'Charley's restaurants with respect to Developer's operation of its existing
Restaurants, if any, and the proposed Restaurant;

                  (b) Developer and Controlling Principal have been and are
faithfully performing all terms and conditions under each of the existing
Operating Agreements with Licensor, if any;

                  (c) Developer is not in default, and has not been in default
during the twelve (12) months preceding Developer's request for financial
approval, of any monetary obligations owed to Licensor or its Affiliates under
any Operating Agreement or other agreement between Developer or any of its
Affiliates and Licensor or any of its Affiliates; and

                  (d) Developer is not in default, and has not been in default
during the twelve (12) months preceding the date of this Agreement, of any
financial covenant or monetary obligation with any of its lenders or financing
sources.

         (3) Legal Approval will be granted if Developer has executed and
delivered to Licensor, in a timely manner, all information and documents
requested by Licensor prior to and as a basis for the issuance of individual
licenses or pursuant to any right granted to Developer by this Agreement or by
any Operating Agreement between Developer and Licensor and has taken

                                       12
<PAGE>

such additional actions in connection therewith as may be requested by Licensor
from time to time.

           (4) Ownership Approval will be granted if:

                  (a) neither Developer nor any of its Controlling Principal (as
applicable) shall have transferred a Controlling Interest in Developer; and

                  (b) Developer and Controlling Principal upon whom Licensor has
 relied to perform the duties under this Agreement shall continue to own and
exercise control over a Controlling Interest in Developer.

         C. (1) If Licensor determines, in its sole discretion, that Developer
and Controlling Principal:

                  (a) have met all of the Conditions prior to the grant of the
right to establish each additional Restaurant, then Licensor shall grant to
Developer the right to develop such additional Restaurants pursuant to the
Development Schedule; or

                  (b) have not met one (1) or more of the Conditions, Licensor
may (in addition to any other rights or remedies Licensor may have) suspend,
without extending the term of this Agreement, Developer's right to develop
Restaurants until the Conditions are satisfied in Licensor's sole discretion,
and re-state the Development Schedule (which may include a reduction in the
number of Restaurants and the number of Development Periods).

           (2) The Conditions described above shall survive the termination or
expiration of this Agreement and shall apply with respect to any Operating
Agreement executed pursuant to this Development Agreement.

         D. It is understood and agreed that the foregoing criteria apply to the
operational, financial, legal and ownership aspects of any Restaurant franchised
by Licensor in which Developer or any Controlling Principal has any legal or
equitable interest. It is further understood and agreed that Developer and
Controlling Principal have an ongoing responsibility to operate each Restaurant
in which Developer or any Controlling Principal has any legal or equitable
interest in a manner which satisfies the foregoing requirements for Operational
Approval, Financial Approval, Legal Approval and Ownership Approval.

                                   ARTICLE V
                                      TERM

         A. Unless sooner terminated in accordance with this Agreement, the term
of this Agreement and all rights granted by Licensor under this Agreement shall
expire on the date on which Developer successfully and in a timely manner has
exercised all of the development rights and completed the development
obligations under this Agreement in accordance with the Development Schedule
(including, if applicable, any extension thereof under Section III(B)(3)).

         B. As set forth in Section VII(E)(3), upon such expiration, Licensor
shall, subject to the terms of the Operating Agreements executed pursuant
hereto, have the right to develop, or

                                       13
<PAGE>

authorize any other person or Entity to develop, O'Charley's restaurants in the
Territory and Developer shall have no further rights with respect to the
development of O'Charley's restaurants in the Territory; provided, however, if
an Operating Agreement is fully executed in accordance with Article III, prior
to the expiration of the Development Schedule, Developer shall complete the
development of such Restaurant subject to the Operating Agreement and shall open
and operate such Restaurant as provided in the Operating Agreement.

                                   ARTICLE VI
                               DUTIES OF DEVELOPER

         A. Developer and Controlling Principal, as applicable, make the
following representations, warranties and covenants and accept the following
obligations:

                  (1) If Developer is a corporation, limited liability company,
 partnership or other Entity, Developer make the following representations,
warranties and covenants to Licensor:

                       (a) Developer is duly organized and validly existing
under the state law of its formation.

                       (b) Developer is duly qualified and is authorized to
do business in each jurisdiction in which its business activities or the nature
of the properties owned by it require such qualification.

                       (c) Developer's corporate charter, written operating
agreement or written partnership agreement shall at all times provide that the
activities of Developer are confined exclusively to the development and
operation of O'Charley's restaurants. Unless otherwise consented to by Licensor
in writing, Developer shall not use the Proprietary Marks as part of its
corporate or other legal name, and, in any event, shall obtain Licensor's
approval of such corporate or other legal name prior to applying for or filing
it with the applicable government authority.

                       (d) The execution of this Agreement and the consummation
of the transactions contemplated hereby are within Developer's corporate power,
if Developer is a corporation, are permitted under Developer's articles of
organization and written operating agreement and have been duly authorized by
Developer, if Developer is a limited liability company, or are permitted under
Developer's written partnership agreement and have been duly authorized by
Developer, if Developer is a partnership.

                       (e) If Developer is a corporation, copies of Developer's
Articles of Incorporation, Bylaws, other governing documents, any amendments
thereto, resolutions of the Board of Directors authorizing entry into and
performance of this Agreement and any certificates, buy-sell agreements or other
documents restricting the sale or transfer of stock of the corporation, and any
other documents as may be reasonably required by Licensor, shall have been
furnished to Licensor prior to the execution of this Agreement; if Developer is
a limited liability company, copies of Developer's articles of organization,
operating agreement, any buy-sell agreements or other documents restricting the
sale or transfer of interests in the limited liability company, and any other
governing documents and any amendments thereto shall have

                                       14
<PAGE>

been furnished to Licensor prior to the execution of this Agreement; or, if
Developer is a partnership, copies of Developer's written partnership agreement,
any buy-sell agreements or other documents restricting the sale or transfer of
interests in the partnership, and any other governing documents and any
amendments thereto shall have been furnished to Licensor prior to the execution
of this Agreement. Developer shall also provide to Licensor evidence of consent
or approval of the entry into and performance of this Agreement by the requisite
number or percentage of shareholders, members or partners, if such approval or
consent is required by statute or by Developer's Articles of Incorporation,
Bylaws, articles of organization, operating agreement, written partnership
agreement or other governing documents, as applicable.

                       (f) If Developer is a corporation, limited liability
company or partnership, the ownership interests in Developer are accurately and
completely described in Attachment D. Further, if Developer is a corporation,
Developer shall maintain at all times a current list of all owners of record and
all beneficial owners of any class of voting securities in Developer, if
Developer is a limited liability company, Developer shall maintain at all times
a current list of all owners of an interest in the limited liability company,
or, if Developer is a partnership, Developer shall maintain at all times a
current list of all owners of an interest in the partnership. Developer shall
immediately provide a copy of the updated list to Licensor upon the occurrence
of any change of ownership and otherwise shall make its list of owners available
to Licensor upon request.

                       (g) If, after the execution of this Agreement, any person
ceases to qualify as a Principal, or if any individual succeeds to or otherwise
comes to occupy a position which would, upon designation by Licensor, qualify
him as a Principal, Developer shall notify Licensor within five (5) days after
any such change and, upon designation of such person by Licensor as a Principal,
or as a Controlling Principal, as the case may be, such person shall execute
such documents and instruments (including, as applicable, this Agreement) as may
be required by Licensor to be executed by others in such positions.

                       (h) If Developer is a corporation, Developer shall
maintain stop-transfer instructions against the transfer on its records of any
of its equity and voting securities and each certificate representing an equity
or voting security of the corporation shall have conspicuously endorsed upon it
a statement, in a form satisfactory to Licensor, that it is held subject to all
restrictions imposed upon assignments by this Agreement; provided, however, that
the requirements of this Section VI(A)(1)(h) shall not apply to the transfer of
equity securities of a Publicly-Held Entity that is otherwise approved to be the
Operator. If Developer is a limited liability company, its operating agreement
shall provide that ownership of an interest in the limited liability company is
held subject to all restrictions imposed upon assignments by this Agreement. If
Developer is a partnership, its written partnership agreement shall provide that
ownership of an interest in the partnership is held subject to all restrictions
imposed upon assignments by this Agreement.

                       (i) Developer and each Controlling Principal have
provided Licensor with the most recent financial statements of Developer and
each Controlling Principal. Developer shall provide an annual balance sheet,
income statement, statement of shareholders' equity and statement of cash flows
in the form prescribed by Licensor (which may be unaudited, unless otherwise
requested or required by Licensor) within one hundred twenty (120) days after

                                       15
<PAGE>

Developer's fiscal year end. Such financial statements present fairly the
financial position of Developer and each Controlling Principal, as applicable,
at the dates indicated therein and with respect to Developer, the results of its
operations, cash flow and owners' equity for the years then ended. Developer
agrees that it shall maintain at all times during the term of this Agreement,
sufficient working capital to fulfill its obligations under this Agreement. Each
of the financial statements mentioned above shall be certified as true, complete
and correct by Developer's treasurer or chief financial officer (or by the
applicable Controlling Principal, as appropriate) and shall have been prepared
in conformity with accounting principles generally accepted in the United States
of America and consistently applied to all applicable periods involved.
Developer's treasurer or chief financial officer shall deliver to Licensor,
simultaneously with the financial statements mentioned above, a certificate
certifying that Developer is not in default of any of Developer's financial
covenants or monetary obligations with any of Developer's lenders or financing
sources. No material liabilities, adverse claims, commitments or obligations of
any nature exist as of the date of this Agreement, whether accrued,
unliquidated, absolute, contingent or otherwise, which are not reflected as
liabilities on the financial statements of Developer or such Controlling
Principal or otherwise appropriately disclosed in the notes thereto.

                       (j) Each of the Principal, except Controlling Principal,
shall execute and bind themselves to the confidentiality and non-competition
covenants set forth in the Confidentiality and Non-Compete Agreement attached
hereto as Attachment C to this Agreement (see Sections IX(B)(2) and IX(I)).
Controlling Principal shall jointly and severally guarantee Developer's
performance of all of Developer's obligations (including, but not limited to,
the payment of fees), covenants and agreements described in this Agreement
pursuant to the terms and conditions of the guaranty attached hereto as
Attachment E, and do otherwise bind themselves to the terms of this Agreement as
stated herein.

                       (k) Developer and Controlling Principal acknowledge and
agree, jointly and severally, that the representations, warranties, covenants
and agreements set forth above in Section VI(A)(l)(a)-(j) are continuing
obligations of Developer and Controlling Principal, as applicable. Developer and
each Controlling Principal will cooperate with Licensor in any efforts made by
Licensor to verify compliance with such representations, warranties, covenants
and agreements.

                  (2) Upon the execution of this Agreement, Developer shall
designate and retain an individual to serve as Operating Principal of Developer
("Operating Principal"). If Developer is an individual, Developer shall perform
all obligations of Operating Principal. Operating Principal shall, during the
entire period he serves as such, meet the following qualifications:

                       (a) Operating Principal may, at Operating Principal's
option, and, subject to the approval of Licensor, designate an individual to
perform the duties and obligations of Operating Principal described herein;
provided, however that Operating Principal shall ensure that such designee meets
all the requirements for an Operating Principal outlined below and conducts and
fulfills all of the Operating Principal's obligations in accordance with the
terms of this Agreement; provided, further, Operating Principal shall remain
fully responsible for any such performance.

                                       16
<PAGE>

                       (b) Operating Principal must maintain a direct or
indirect ownership interest in the Developer reasonably satisfactory to
Licensor. Except as may otherwise be provided in this Agreement, Operating
Principal's interest in Developer shall be and shall remain free of any pledge,
mortgage, hypothecation, lien, charge, encumbrance, voting agreement, proxy,
security interest or purchase right or options.

                       (c) Developer and Operating Principal (or his designee,
as applicable) shall devote their full time and best efforts to the supervision
and conduct of the business contemplated by this Agreement. Operating Principal
shall execute this Agreement as a Controlling Principal, and shall be
individually, jointly and severally with Developer and the other Controlling
Principal, bound by all obligations of Developer, Operating Principal and
Controlling Principal hereunder.

                       (d) Operating Principal (or his designee, as applicable)
shall meet Licensor's standards and criteria for such individual (including, but
not limited to, educational, financial and operational experience criteria
prescribed by Licensor), as set forth in the Manuals (as defined in the
Operating Agreement) or as otherwise communicated by Licensor to Operator from
time to time.

                       (e) If during the term of this Agreement Operating
Principal (or any designee) is not able to continue to serve in the capacity of
Operating Principal or no longer qualifies to act as such in accordance with
this Section, Developer shall notify Licensor within ten (10) days and shall
designate a replacement within sixty (60) days after Operating Principal (or any
designee) ceases to serve or be so qualified, such replacement being subject to
the same qualifications and restrictions listed above. Developer shall provide
for interim management of the activities contemplated under this Agreement until
such replacement is so designated, such interim management to be conducted in
accordance with this Agreement.

                  (3) Developer and Controlling Principal understand that
compliance by all developers and operators operating under the System with
Licensor's training, development and operational requirements is an essential
and material element of the System and that Licensor and developers and
operators operating under the System consequently expend substantial time,
effort and expense in training management personnel for the development and
operation of their respective O'Charley's restaurants. Accordingly, Developer
and Controlling Principal agree that if during the term of this Agreement,
Developer or any Controlling Principal shall designate or employ any individual
who is at the time or was within the preceding three (3) months employed in a
restaurant managerial position, a multi-restaurant supervisory position or home
office staff position (e.g., officer or director level personnel, management
information systems personnel or human resources and training personnel), by
Licensor or any of its Affiliates, including, but not limited to, individuals
employed by Licensor to work in its O'Charley's restaurants, or at Licensor's
home office, or employed in a restaurant managerial position by any other
developer or operator operating under the System (a "Covered Individual"), then
(a) Developer shall give such former employer written notice of its intent to
employ such Covered Individual at least thirty (30) days prior to the date such
Covered Individual commences employment with Developer, and (b) such former
employer of such Covered Individual shall be entitled to compensation for the
reasonable costs and expenses, of whatever nature or kind, incurred by such
employer in connection with the training of such Covered Individual. The parties
hereto

                                       17
<PAGE>

agree that such expenditures may be uncertain and difficult to ascertain and,
therefore, agree that the compensation specified herein reasonably represents
such expenditures and is not a penalty. The employing Developer or Controlling
Principal shall pay to the former employer an amount equal to the salary of such
Covered Individual for the six (6) month period prior to the termination of his
employment with such former employer (or if the Covered Individual was employed
less than six (6) months, that Covered Individual's projected salary had the
Covered Individual been employed for the full six (6) months) for any restaurant
level managerial personnel. For any Covered Individual employed in a
multi-restaurant supervisory or home office staff position, the employing
Developer or Controlling Principal shall pay to the former employer an amount
equal to the salary of such Covered Individual for the twelve (12) month period
immediately prior to the termination of his employment with such former employer
(or if the Covered Individual was employed less than twelve (12) months, that
Covered Individual's projected salary had the Covered Individual been employed
for the full twelve (12) months). Such amount shall be paid by Developer, or the
applicable Controlling Principal, as the case may be, within thirty (30) days
after written notice, unless otherwise agreed with such former employer. The
parties hereto expressly acknowledge and agree that no current or former
employee of Licensor, its Affiliates, Developer, or of any other Entity
operating under the System shall be a third party beneficiary of this Agreement
or any provision hereof. Notwithstanding the above, solely for purposes of
bringing an action to collect any payment due under this Section, such former
employer shall be a third-party beneficiary of this Section VI(A)(3). Licensor
hereby expressly disclaims any representations and warranties regarding the
performance of any employee or former employee of Licensor or its Affiliates, or
any developer or operator operating under the System, who is designated or
employed by Developer or any Controlling Principal in any capacity, and Licensor
shall not be liable for any losses, of any nature or kind, incurred by Developer
or any Controlling Principal in connection therewith.

                  (4) Developer shall comply with all requirements of federal,
state and local laws, rules, regulations and orders.

                  (5) Developer shall obtain and maintain all appropriate
licenses, permits and certificates for the operation of the Restaurant,
including licenses and permits to sell alcoholic beverages in the Restaurant.

                  (6) Developer and Controlling Principal shall allow Licensor
and its representatives to review any and all of Developer's and Controlling
Principal' documents and other materials relating to their financing
arrangements or capital structure.

         B. Developer and Controlling Principal represent, warrant, covenant and
agree that they shall comply with all other requirements and perform such other
obligations as provided in this Agreement and the Manuals.

                                  ARTICLE VII
                             DEFAULT AND TERMINATION

         A. Developer shall be deemed to be materially in default under this
Agreement and all rights granted herein shall automatically terminate without
notice to Developer if:

                                       18
<PAGE>

                  (1) Developer becomes insolvent or makes a general assignment
for the benefit of creditors or files a voluntary petition under any section or
chapter of federal bankruptcy laws or under any similar law or statute of the
United States or any state thereof ("Bankruptcy Laws") or admits in writing its
inability to pay its debts when due;

                  (2) Developer is adjudicated bankrupt or insolvent in
proceedings filed against Developer under any section or chapter of any
Bankruptcy Law;

                  (3) a bill in equity or other proceeding for the appointment
of a receiver of Developer or other custodian for Developer's business or assets
is filed and consented to by Developer, or if a receiver or other custodian
(permanent or temporary) of Developer's assets or property, or any part thereof,
is appointed by any court of competent jurisdiction;

                  (4) proceedings for a composition with creditors under any
state or federal law are instituted by or against Developer;

                  (5) a final judgment against Developer remains unsatisfied or
of record for thirty (30) days or longer (unless supersedeas bond is filed);

                  (6) Developer is dissolved;

                  (7) execution is levied against Developer's business or
property;

                  (8) suit to foreclose any lien or mortgage against the
premises or equipment of any business operated hereunder or under any Operating
Agreement is instituted and not dismissed within thirty (30) days; or

                  (9) the real or personal property of any business operated
hereunder or under any Operating Agreement shall be sold after levy thereupon by
any sheriff, marshal or other government official.

         B. Developer shall be deemed to be in material default and Licensor
may, at its option, terminate this Agreement and all rights granted hereunder,
without affording Developer any opportunity to cure the default except as
specifically provided below, effective immediately upon notice to Developer,
upon the occurrence of any of the following events of default:

                  (1) Developer fails to comply with the Development Schedule
(or any extension, if any, thereof approved by Licensor in writing), or
Developer fails to develop a replacement Restaurant within any time period
agreed upon by the parties under Section III(B)(2);

                  (2) Developer fails to execute each Operating Agreement in
accordance with Section III(C) (or any extension thereof approved by Licensor in
writing);

                  (3) Developer or any Controlling Principal is convicted of, or
shall have entered a plea of nolo contendere to, a felony, a crime involving
moral turpitude or any other crime or offense that Licensor believes is
reasonably likely to have an adverse effect on the System, the Proprietary
Marks, the goodwill associated therewith or Licensor's interest therein;

                                       19
<PAGE>

                  (4) a threat or danger to public health or safety results from
the construction, maintenance or operation of any Restaurant developed under
this Agreement;

                  (5) Developer fails to designate a qualified replacement
Operating Principal or designee appointed by Operating Principal within sixty
(60) days after any initial or successor Operating Principal or designee ceases
to serve as such, all as required under Section VI(A)(2)(e);

                  (6) Developer or any Controlling Principal breaches any of the
representations warranties and covenants in Article VI;

                  (7) Developer or any Controlling Principal transfers or
attempts to transfer any rights or obligations under this Agreement, any
interest in Developer or the assets of Developer, without first obtaining
Licensor's written consent pursuant to Section VIII(B) or offering Licensor a
right of first refusal with respect to such transfer pursuant to Section
VIII(D);

                  (8) Developer or any Controlling Principal fails to comply
with the covenants in Article IX or fails to obtain execution of the covenants
and related agreements required under Article IX hereof within thirty (30) days
after being requested to do so by Licensor;

                  (9) an approved transfer upon death or Permanent Disability is
not effected within the time period and in the manner prescribed by Section
VIII(E);

                  (10) Developer or any Controlling Principal misuses or makes
any unauthorized use of the Proprietary Marks or otherwise materially impairs
the goodwill associated therewith or with the System or Licensor's rights
therein;

                  (11) Developer, any Controlling Principal or any of their
Affiliates fails, refuses or neglects promptly to pay when due any monetary
obligation owing to Licensor or any of its Affiliates under this Agreement, any
Operating Agreement or any other agreement (which shall include payments to
lenders where Licensor has guaranteed the underlying indebtedness) and does not
cure such default within five (5) days following notice from Licensor (or such
other applicable cure period contained in such other agreement, unless no cure
period is stated or such period is less than five (5) days, in which case the
five (5) day cure period shall apply);

                  (12) Developer, any Controlling Principal or any of their
Affiliates fails or refuses to comply with any term or condition of any sublease
or related agreement, between Licensor or its Affiliates and Developer or its
Affiliates, and does not cure such default within any notice and cure period
provided for in such sublease or related agreement following notice from
Licensor of such default (unless no cure period is specified in the sublease or
other agreement), in which case the notice and cure period in Section VII(C)
shall apply; or

                  (13) Developer or any Controlling Principal repeatedly commits
a material event of default under this Agreement, whether or not such defaults
are of the same or different nature and whether or not such defaults have been
cured by Developer after notice by Licensor.

         C. Except as provided above in Sections VII(A) and VII(B), if Developer
fails to comply with any other term or condition imposed by this Agreement, any
Operating Agreement

                                       20
<PAGE>

or any other development or operating agreement between Developer or any
Controlling Principal and Licensor, as such may from time to time be amended,
Licensor may terminate this Agreement only by giving written notice of
termination stating the nature of such default to Developer at least thirty (30)
days prior to the effective date of termination; provided, however, that
Developer may avoid termination by immediately initiating a remedy to cure such
default and curing it to Licensor's satisfaction within the thirty (30) day
period and by promptly providing proof thereof to Licensor. Subject to Section
VII(D), if any such default is not cured within the specified time, or such
longer period as applicable law may require, Developer's rights under this
Agreement shall terminate without further notice to Developer effective
immediately upon the expiration of the thirty (30) day period or such longer
period as applicable law may require, unless Licensor gives Developer notice of
Licensor's intent to continue this Agreement.

         D. Upon default by Developer under Sections VII(B) or VII(C), Licensor
has the option, in its sole discretion, in addition to exercising its option to
terminate this Agreement as provided in Sections VII(B) and (C), to do any one
or more of the following:

                  (1) terminate or modify any territorial rights granted to
Developer in Article I;

                  (2) reduce the area of such territorial rights;

                  (3) reduce the number of Restaurants which Developer may
establish pursuant to Section III(B)(l);

                  (4) accelerate the Development Schedule;

                  (5) with respect to Section VII(B)(l), permit Developer to
obtain an extension of the Development Schedule under Section III(B);

                  (6) terminate or modify any right granted to Developer in
Section I(B); or

                  (7) pursue any other remedy Licensor may have at law or in
equity; provided, however, that Licensor shall not be entitled to recover money
damages for lost revenues or profits solely because of a failure of Developer to
meet the Development Schedule set out herein so long as Developer shall
demonstrate that such failure has occurred despite the exercise of all
commercially reasonable efforts on Developer's part to meet such Development
Schedule.

         E. (1) Upon the termination or expiration of this Agreement, Developer
shall have no right to establish or operate any Restaurant:

                       (a) for which an Operating Agreement has not been
executed by Licensor and delivered to Developer at the time of termination or
expiration, or

                       (b) with respect to which Developer has not satisfied the
         prerequisites for obtaining licenses as described in Article IV whether
         or not an Operating Agreement has been executed.

                                       21
<PAGE>

                  (2) If Licensor elects to terminate the territorial rights
granted to Developer in Article I or modify such territorial rights or reduce
the area of territorial rights as provided in Section VII(D) above, Developer
shall continue to develop Restaurants in accordance with the Development
Schedule or Supplementary Development Schedule, to the extent that the number of
Restaurants Developer is required to develop is reduced and/or the area in which
such Restaurants are required to be developed is reduced by Licensor pursuant to
Sections VII(D)(2) and (3).

                  (3) If Licensor exercises any of its rights in Section VII(D)
or if this Agreement otherwise expires or terminates, Licensor shall be entitled
to establish, and to license others to establish, Restaurants in the Territory
or in the portion thereof no longer part of the Territory or pursuant to any
other modification of Developer's territorial rights, except as may be otherwise
provided under any Operating Agreement which is then in effect between Licensor
and Developer.

         F. Licensors exercise of any of its options under Section VII(D) shall
not, in the event of a default, constitute a waiver by Licensor to exercise its
option to terminate this Agreement at any time with respect to a subsequent
event of default of a similar or different nature.

         G. No default under this Agreement shall constitute a default under any
Operating Agreement between the parties hereto, unless the default is also a
default under the terms of such Operating Agreement.

         H. Upon default of Developer and the early termination of this
Agreement, Licensor shall have the right to purchase the assets of all of the
Restaurants opened pursuant to Operating Agreements executed under the terms of
this Agreement. The terms and conditions of the purchase transaction, including,
but not limited to, the purchase price for the assets of such Restaurants, shall
be determined in accordance with the provisions contained in the applicable
Operating Agreement permitting the Licensor to purchase, at its option, such
assets upon termination or expiration of the Operating Agreement.

         I. No right or remedy herein conferred upon or reserved to Licensor is
exclusive of any other right or remedy provided or permitted by law or in
equity.

         J. Upon termination or expiration of this Agreement, Developer and
Controlling Principal shall comply with the restrictions on confidential
information and the covenants against competition contained in Article IX. Any
other person required to execute similar covenants pursuant to Article IX shall
also comply with such covenants.

         K. Developer acknowledges and agrees that each of the obligations of
Developer and Controlling Principal described in this Agreement is a material
and essential obligation of Developer, that non-performance of such obligations
will adversely and substantially affect Licensor and the System, and that the
exercise by Licensor of the rights and remedies set forth herein is appropriate
and reasonable.

         L. Any alleged default by Licensor of this Agreement shall be deemed
waived unless: (1) Developer gives Licensor written notice of such alleged
default within thirty (30)

                                       22

<PAGE>

days of its occurrence; and (2) Licensor fails to initiate a remedy to such
alleged default within sixty (60) days of having received written notice
thereof.

                                  ARTICLE VIII
                              TRANSFER OF INTEREST

         A. Licensor shall have the right to transfer or assign this Agreement
and all or any part of its rights or obligations herein to any person or Entity
without Developer's consent. Specifically, and without limitation to the
foregoing, Developer and Controlling Principal expressly affirm and agree that
Licensor may sell its assets, the Proprietary Marks or the System to a third
party; may offer its securities privately or publicly; may merge, spin-off,
acquire other Entities, or be acquired by another Entity; may undertake a
refinancing, recapitalization, leveraged buyout or other economic or financial
restructuring; and, with regard to any or all of the above sales, assignments
and dispositions, Developer and Controlling Principal expressly and specifically
waive any claims, demands or damages against Licensor arising from or related to
the transfer of the Proprietary Marks (or any variation thereof) or its assets
or the System (or any portion thereof) from Licensor to any other party. Upon
such sale, assignment or disposition, Developer further agrees that Licensor
shall have no further obligations arising out of or related to this Agreement so
long as such obligations are assumed by the transferee. Nothing contained in
this Agreement shall require Licensor to remain in the business of operating or
licensing the operation of O'Charley's restaurants or other restaurant
businesses or to offer any services or products, whether or not bearing the
Proprietary Marks, to Developer, if Licensor exercises its rights hereunder to
assign its rights in this Agreement.

         B. (1) Developer and Controlling Principal understand and acknowledge
that the rights and duties set forth in this Agreement are personal to Developer
and each Controlling Principal and that Licensor has granted such rights in
reliance on the business skill, financial capacity and personal character of
Developer and Controlling Principal and with the expectation that the duties and
obligations contained in this Agreement will be performed by Developer and each
Controlling Principal. Accordingly, neither Developer nor any Controlling
Principal, nor any successor or assign of Developer or any Controlling
Principal, shall sell, assign, transfer, convey, give away, pledge, mortgage or
otherwise dispose of or encumber any direct or indirect interest in this
Agreement, in Developer or the assets of Developer, without the prior written
consent of Licensor; provided, however, that Licensor's prior written consent
shall not be required for a transfer of less than a five percent (5%) interest
in a Publicly-Held Entity. Any purported assignment or transfer, by operation of
law or otherwise, made in violation of this Agreement shall be null and void.

            (2) If Developer wishes to transfer all or part of its interest in
this Agreement or if Developer or a Controlling Principal wishes to transfer any
ownership interest in, or assets of, Developer, the transferor and the proposed
transferee shall apply to Licensor in writing for Licensor's consent, which may
be withheld in Licensor's sole discretion. Without limiting the generality of
the foregoing, Licensor may require that any or all of the following conditions
be met prior to its approval of the transfer:

                       (a) All of the accrued monetary obligations of Developer
and its Affiliates and all other outstanding obligations to Licensor and its
Affiliates arising under this

                                       23
<PAGE>

Agreement or any Operating Agreement or any other agreement shall have been
satisfied in a timely manner and Developer shall have satisfied all trade
accounts and other debts, of any nature or kind, in a timely manner.

                       (b) Developer and its Affiliates are not in default of
any provision of this Agreement, any amendment hereof or successor hereto, or
any Operating Agreement or any other agreement between Developer or its
Affiliates and Licensor or its Affiliates; and Developer shall have
substantially and timely complied with all the terms and conditions of such
agreements during the terms thereof.

                       (c) The transferor and its Principal, as applicable,
shall have executed a general release, in a form satisfactory to Licensor, of
any and all claims against Licensor, and its Affiliates, and each of such
Entity's respective officers, directors, shareholders, partners, agents,
representatives, independent contractors and employees, in their corporate and
individual capacities, including, without limitation, claims arising under this
Agreement, any Operating Agreement and any other agreement between Developer or
any of its Affiliates and Licensor or any of their Affiliates or under federal,
state or local laws, rules, and regulations or orders.

                       (d) The transferee shall enter into a written agreement,
in a form satisfactory to Licensor, assuming full, unconditional, joint and
several liability for and agreeing to perform from the date of the transfer, all
obligations, covenants and agreements of Developer in this Agreement, and, if
transferee is a corporation, limited liability company, partnership or other
Entity, transferee's shareholders, members, partners or other investors, as
applicable, shall also execute such agreement as transferee's Principal, and
guarantee the performance of all such obligations, covenants and agreements.

                       (e) The transferee shall demonstrate to Licensor's
satisfaction that transferee meets the criteria considered by Licensor when
reviewing a prospective developer's application for development rights,
including, but not limited to, Licensor's educational, managerial and business
standards, transferee's good moral character, business reputation and credit
rating, transferee's aptitude and ability to conduct the business contemplated
hereunder (as may be evidenced by prior related business experience or
otherwise), transferee's financial resources and capital for operation of the
business and the geographic proximity of other territories with respect to which
transferee has been granted development rights or of other O'Charley's
restaurants operated by transferee, if any.

                       (f) The transferee shall execute the standard form
development agreement then being offered to new System developers or a revised
form of this Agreement, as Licensor deems appropriate, and such other ancillary
agreements as Licensor may require, which agreements shall supersede this
Agreement and its ancillary documents in all respects and the terms of which
agreements may differ from the terms of this Agreement, and if the transferee is
a corporation, limited liability company, partnership or other Entity,
transferee's shareholders, members, partners or other investors, as applicable,
shall also execute such agreements as transferee's Principal, and guarantee the
performance of all such obligations, covenants and agreements.

                                       24
<PAGE>

                       (g) The transferee, at its expense, shall renovate,
modernize and otherwise upgrade the Restaurant and, if applicable, any
Restaurant delivery vehicles to conform to the then-current standards and
specifications of the System, and shall complete the upgrading and other
requirements within the time period reasonably specified by Licensor.

                       (h) The transferor shall remain liable for all of the
obligations to Licensor in connection with this Agreement incurred prior to the
effective date of the transfer and shall execute any and all instruments
reasonably requested by Licensor to evidence such liability.

                       (i) At the transferee's expense, the transferee, the
transferee's Operating Principal (or his authorized designee), and any other
applicable Restaurant personnel shall complete any training programs then in
effect for operators of O'Charley's restaurants upon such terms and conditions
as Licensor may reasonably require.

                       (j) Developer shall pay a transfer fee of Five Thousand
Dollars ($5,000), or such greater amount as is necessary, to reimburse Licensor
for its reasonable costs and expenses associated with reviewing the application
to transfer, including, without limitation, legal and accounting fees.

                       (k) If transferee is a corporation, limited liability
company, partnership or other Entity, transferee shall make and will be bound by
any or all of the representations, warranties and covenants in Article VI as
Licensor requests. Transferee shall provide to Licensor evidence satisfactory to
Licensor that the terms of Article VI have been satisfied and are true and
correct on the date of transfer.

                       (l) Developer shall have completed development of the
Restaurants required to be developed during the first three (3) Development
Periods of the Development Schedule.

                  (3) Developer acknowledges and agrees that each condition
which must be met by the transferee is reasonable and necessary to ensure such
transferee's full performance of the obligations hereunder.

         C. In the event the proposed transfer is to a corporation formed solely
for the convenience of ownership, Licensor's consent may be conditioned upon any
of the requirements in Section VIII(B)(2)(a), (b), (d), (h), (i) and (k). With
respect to a transfer to a corporation formed for the convenience of ownership,
Developer shall be the owner of all the voting stock or interest of the
corporation, and if Developer is owned by more than one individual, each such
individual shall have the same proportionate ownership interest in the
corporation as he had in Developer prior to the transfer.

         D. (1) If Developer wishes to transfer all or part of its interest in
the assets of a Restaurant or this Agreement, or if Developer or a Controlling
Principal wishes to transfer any ownership interest in Developer pursuant to an
offer received from a third party to purchase such interest, then such proposed
seller shall promptly notify Licensor in writing of each such offer, shall
certify that such offer is bona fide and shall provide and shall certify in
writing as to the accuracy of such information and documentation relating to
the offer as Licensor may require.

                                       25
<PAGE>

Licensor shall have the right and option, exercisable within thirty (30) days
after receipt of such written notification and copies of all documentation
requested by Licensor describing the terms of such offer, to send written notice
to the proposed seller that Licensor intends to purchase the proposed seller's
interest on the same terms and conditions offered by the third party. In the
event that Licensor elects to purchase the proposed seller's interest, closing
on such purchase must occur within the later of sixty (60) days from the date of
notice to the proposed seller of the election to purchase by Licensor, sixty
(60) days after the date Licensor receives and obtains all necessary permits and
approvals to complete such purchase or such other date the parties mutually
agree upon in writing. Any material change in the terms of any offer prior to
closing shall constitute a new offer subject to the same right of first refusal
by Licensor as in the case of an initial offer. Failure of Licensor to exercise
the option afforded by this Section VIII(D) shall not constitute a waiver of any
other provision of this Agreement, including the consent provisions of Section
VIII(B) and all of the other requirements of this Article VIII relating to a
proposed transfer.

                  (2) If the offer from a third party provides for payment of
consideration other than cash or involves certain non-cash items or intangible
benefits, Licensor may elect to purchase the interest proposed to be sold for
the reasonable equivalent in cash of such non-cash item or intangible benefit
(the "Cash Equivalent"). If the parties cannot agree within thirty (30) days on
the reasonable equivalent in cash of the non-cash part of the offer, then the
Cash Equivalent will be determined by one (1) or more professional appraisers or
independent certified public accountants who are qualified by experience and
ability to appraise (each, a "Qualified Appraiser"), selected under the
procedures in this Section. If the Cash Equivalent is to be determined by
Qualified Appraisers, Licensor and Developer will each have the opportunity to
appoint, at its own expense, a Qualified Appraiser, within five (5) days
following the expiration of the thirty (30) day period within which Licensor and
Developer could not mutually agree on the Cash Equivalent. If either party shall
fail to appoint a Qualified Appraiser within this five (5) day period, the other
Qualified Appraiser shall unilaterally establish the Cash Equivalent by a
written opinion and the cost of such Qualified Appraiser shall be split between
the two parties equally. If both parties appoint Qualified Appraisers within
this five (5) day period, the two (2) Qualified Appraisers shall establish the
Cash Equivalent in a single written opinion agreed to by both of them. If the
two (2) Qualified Appraisers cannot agree on the Cash Equivalent within ten (10)
days of the appointment of the latter of them, the two (2) Qualified Appraisers
shall together appoint a third Qualified Appraiser whose written opinion shall
establish a Cash Equivalent between the Cash Equivalents established by the
first two (2) Qualified Appraisers. In the event of such appraisal, each party
shall bear its own legal and other costs. In the event that Licensor exercises
its right of first refusal herein provided, it shall have the right to set off
(i) all amounts due from Developer for the Qualified Appraisers' fees and
appraisal costs, and (ii) all amounts due from Developer or any of its
Affiliates, against any payment therefor.

         E. (1) Upon the death of Developer (if Developer is a natural person)
or any Controlling Principal who is a natural person (the "Deceased"), the
executor, administrator or other personal representative of the Deceased shall
transfer such interest to a third party in accordance with the conditions
described in this Section VIII(E) within twelve (12) months after the death. If
no personal representative is designated or appointed or no probate proceedings
are instituted with respect to the estate of the Deceased, then the distributee
of such interest shall be

                                       26
<PAGE>

subject to approval by Licensor. If the distributee is not approved by Licensor,
then the distributee shall transfer such interest to a third party approved by
Licensor within twelve (12) months after the death of the Deceased.

                  (2) Upon the Permanent Disability of Developer (if Developer
is a natural person) or any Controlling Principal who is a natural person,
Licensor may, in its sole discretion, require such interest to be transferred to
a third party approved by Licensor within six (6) months after notice to
Developer of such Permanent Disability. "Permanent Disability" shall mean any
physical, emotional or mental injury, illness or incapacity which would prevent
a person from performing the obligations set forth in this Agreement or in the
guaranty made part of this Agreement for at least ninety (90) consecutive days.
Permanent Disability shall be determined upon examination of the person by a
licensed practicing physician selected by Licensor; or, if the person refuses to
submit to an examination, then such person shall be automatically deemed
permanently disabled as of the date of such refusal for the purpose of this
Section VIII(E). The costs of any examination required by this Section shall be
paid by Licensor.

                  (3) Upon the death or claim of Permanent Disability of
Developer or any Controlling Principal, Developer or a representative of
Developer, must promptly notify Licensor of such death or claim of Permanent
Disability within fifteen (15) days of its occurrence. Any transfer upon death
or Permanent Disability shall be subject to the same terms and conditions as
described in this Article VIII for any inter vivos transfer. Developer and each
Controlling Principal shall have the right to seek approval of a transfer of its
respective interest to a proposed successor prior to the death or claim of
Permanent Disability by Developer or such Controlling Principal, as applicable.
If Developer or any Controlling Principal, as applicable, desires to obtain
approval of any proposed successor in interest prior to the death or claim of
Permanent Disability, Developer or the Controlling Principal, as applicable,
shall submit to Licensor such information and documentation concerning such
proposed successor required by Licensor in the Manuals or other written
directives. Further, as a condition to approval, Licensor may, in its sole
discretion, require compliance with any of the terms and conditions described in
this Section for any inter vivos transfer.

         F. Licensor's consent to a transfer of any interest in Developer or in
this Agreement described herein shall not constitute a waiver of any claims it
may have against the transferring party, nor shall it be deemed a waiver of
Licensor's right to demand exact compliance with any of the terms of this
Agreement by the transferee.

         G. Securities of, or other Entity ownership interests in, Developer may
be offered to prospective investors, including existing investors, by private
offering or otherwise, only with the prior written consent of Licensor. All
materials required for such offering by federal or state law shall be submitted
to Licensor for a limited review, as discussed below prior to being filed with
any governmental agency; and any materials to be used in any exempt offering
shall be submitted to Licensor for such review prior to their use. No offering
by Developer shall imply (by use of the Proprietary Marks or otherwise) that
Licensor is participating in an underwriting, issuance or offering of
Developer's securities or other Entity ownership interests or the securities or
other Entity ownership interests of any subsidiary or Affiliate of Licensor; and
Licensor's review of any offering materials shall be limited solely to the
subject of the relationship between Developer and Licensor and their respective
Affiliates. Licensor may, at its option, require

                                       27
<PAGE>

Developer's offering materials to contain a written statement prescribed by
Licensor concerning the limitations described in the preceding sentence.
Developer, its Principal and the other participants in the offering must prior
to the commencement of such offering, agree in writing to fully indemnify
Licensor, Licensor's Affiliates and each of such Entity's respective officers,
directors, shareholders, members, partners, agents, representatives, independent
contractors and employees in connection with the offering. For each proposed
offering, Developer shall reimburse Licensor for its reasonable costs and
expenses associated with reviewing the proposed offering materials, including,
without limitation, legal and accounting fees. Developer shall give Licensor
written notice at least ninety (90) days prior to the date of commencement of
any offering or other transaction covered by this Section.

         H. Developer and each of its Controlling Principal, as applicable, may
transfer, sell or assign their respective interests in Developer, by and among
themselves only with Licensor's prior written consent; provided, however, such
transfer, sale or assignment shall not result in a change in the Controlling
Interest in Developer. Licensor's consent may be conditioned on compliance with
Section VIII(B)(2)(a), (b), (d), (h), (i), (k) and (l). For the purpose of this
Agreement, "Controlling Interest" shall mean:

                  (a) if Developer is a corporation, that Controlling Principal,
 either individually or cumulatively, (i) directly or indirectly own at least
fifty-one percent (51%) of the shares of each class of Developer's issued and
outstanding capital stock and (ii) are entitled, under its governing documents
and under any agreements among the shareholders, to cast a sufficient number of
votes to elect a majority of the members of the board of directors or to require
such corporation to take or omit to take any action which such corporation is
required to take or omit to take under this Agreement;

                  (b) if Developer is a limited liability company, that
Controlling Principal (i) own at least fifty-one percent (51%) of the
outstanding units of membership interest in the limited liability company, and
(ii) are entitled under its operating agreement to act on behalf of the limited
liability company without the approval or consent of any other member or be able
to cast a sufficient number of votes to require the limited liability company to
take or omit to take any action which the limited liability company is required
to take or omit to take under this Agreement; or

                  (c) if Developer is a partnership, that Controlling Principal
(i) own at least a fifty-one percent (51%) interest in the operating profits
and operating losses of the partnership as well as at least a fifty-one percent
(51%) ownership interest in the partnership (and at least a fifty-one percent
(51%) interest in the shares of each class of capital stock or other ownership
interest of any direct or indirect corporate or other Entity general partner)
and (ii) are entitled under its partnership agreement or other Entity
organizational documents or applicable law to act on behalf of the partnership
without the approval or consent of any other partner or owner or be able to cast
a sufficient number of votes to require the partnership or other Entity to take
or omit to take any action which the partnership or other Entity is required to
take or omit to take under this Agreement.

         I. If any person holding an interest in Developer (other than Developer
or a Controlling Principal, which parties shall be subject to the provisions set
forth in Section VIII(B)

                                       28
<PAGE>

above) transfers such interest, then Developer shall promptly notify Licensor of
such proposed transfer in writing and shall provide such information relative
thereto as Licensor may reasonably request prior to such transfer. Such
transferee must have good moral character a good business reputation, an
acceptable credit rating and may not be one of Licensor's competitors. Such
transferee will be a Developer's Principal and as such shall execute a
confidentiality and non-compete agreement in the form then required by Licensor,
which form shall be in substantially the same form attached hereto as Attachment
C (see Sections IX(B)(2) and IX(I)). Licensor also reserves the right to
designate the transferee as a Controlling Principal.

                                   ARTICLE IX
                                    COVENANTS

         A. Developer and Operating Principal covenant that during the term of
this Agreement (except as otherwise approved in writing by Licensor) Developer
and Operating Principal (and any approved designee for Operating Principal)
shall devote their full time, energy and best efforts to the management and
operation of the development activities contemplated under this Agreement.

         B. (1) Neither Developer nor any Controlling Principal shall, during
the term of this Agreement and thereafter, communicate or divulge to, or use for
the benefit of, any other person, persons or Entity and following the
termination or expiration of this Agreement, shall not use for their own
benefit, any confidential information, knowledge or know-how concerning the
methods of development and operation of the Restaurants which may be
communicated to Developer or any Controlling Principal or of which they may be
apprised. Developer and each Controlling Principal shall disclose such
confidential information only to Controlling Principal and Developer's personnel
who must have access to it in connection with their employment with Developer.
Any and all information, knowledge, know-how, techniques and any materials used
in or related to the System which Licensor provides to Developer in connection
with this Agreement shall be deemed confidential for the purposes of this
Agreement. Neither Developer nor Controlling Principal shall at any time,
without Licensor's prior written consent, copy, duplicate, record or otherwise
reproduce such materials or information, in whole or in part, nor otherwise make
the same available to any unauthorized person. The covenants in this Section
shall survive the expiration, termination or transfer of this Agreement or any
interest herein and shall be perpetually binding upon Developer and each
Controlling Principal; provided, however, if the jurisdiction in which this
covenant is sought to be enforced does not allow perpetual binding, then the
maximum amount of time allowed under the applicable law.

            (2) Developer shall require and obtain execution of covenants
similar to those set forth in Section IX(B)(1) from each of its Principal who
are not required to sign this Agreement as a Controlling Principal or as
Operating Principal. Such covenants shall be substantially in the form contained
in Attachment C. Developer shall provide Licensor with executed copies of all
such agreements within ten (10) days after they are executed.

         C. Developer and Controlling Principal specifically acknowledge that,
pursuant to this Agreement, Developer and Controlling Principal will receive
valuable training, trade secrets and confidential information which are beyond
the present skills and experience of Developer and Controlling Principal and
Developer's managers and employees and that Developer has the

                                       29
<PAGE>

right and the obligation, arising from this Agreement, to develop the Territory
for the benefit of the System. Developer and Controlling Principal acknowledge
that such specialized training, trade secrets and confidential information
provide a competitive advantage and will be valuable to them in the development
and operation of the Restaurants and that gaining access to such specialized
training, trade secrets and confidential information is, therefore, a primary
reason for entering into this Agreement. In consideration of such specialized
training, trade secrets, confidential information and rights, Developer and
Controlling Principal covenant that, during the term of this Agreement, except
as otherwise approved in writing by Licensor, neither Developer nor any
Controlling Principal shall, either directly or indirectly, for themselves,
through, on behalf of or in conjunction with any person, persons or Entity:

                  (1) divert, or attempt to divert, any business or customer of
the business described hereunder to any competitor, by direct or indirect
inducement or otherwise, or do or perform, directly or indirectly, any other act
injurious or prejudicial to the goodwill associated with the Proprietary Marks
and the System; or

                  (2) own, maintain, operate, engage in or have any financial or
 beneficial interest in (including through any interest in an Entity that
conducts such activities), advise, assist or make loans to, any business that
operates a full service, varied menu, casual dining restaurant that features
freshly prepared items such as steaks, seafood, homemade baked goods and fresh
cut salads, and that serves alcoholic beverages through a full-service bar, and
which business is located within the United States, its territories or
commonwealths, or any other country, province, state or geographic area in which
Licensor has used, sought registration of or registered the same or similar
Proprietary Marks or operates or licenses others to operate a business under the
same or similar Proprietary Marks.

         D. With respect to Developer, and for a continuous uninterrupted period
commencing upon the expiration or termination of (regardless of the cause for
termination), or transfer of all of the Controlling Interest in, this Agreement
(or with respect to each Controlling Principal, commencing upon the earlier of:
(i) the expiration, termination of, or transfer of all of the Controlling
Interest in this Agreement or (ii) the time such individual or Entity ceases to
satisfy the definition of Principal as described in this Agreement), and
continuing for two (2) years thereafter, except as otherwise approved in writing
by Licensor, neither Developer nor any Controlling Principal shall, either
directly or indirectly, for themselves or through, on behalf of, or in
conjunction with any person, persons or Entity:

                  (1) divert, or attempt to divert, any business or customer of
the business described hereunder to any competitor, by direct or indirect
inducement or otherwise, or do or perform, directly or indirectly, any other act
injurious or prejudicial to the goodwill associated with Licensor's Proprietary
Marks and the System;

                  (2) employ, or seek to employ, any person who is at that time,
 or has been within the preceding six (6) months, employed by Licensor or any of
its Affiliates or by any other developer or operator of Licensor, or otherwise
directly or indirectly induce such person to leave that person's employment;
provided, however, that Developer may employ such person in a managerial
position with respect to Developer's operation of an O'Charley's restaurant
pursuant to the terms of the Operating Agreement applicable to such O'Charley's
restaurant; or

                                       30
<PAGE>

                  (3) own, maintain, operate, engage in or have any financial or
beneficial interest in (including through any interest in an Entity that
conducts such activities), advise, assist or make loans or provide guarantees
with respect to loans to, any business that operates a full service, varied
menu, casual dining restaurant that features freshly prepared items such as
steaks, seafood, homemade baked goods and fresh cut salads, and that serves
alcoholic beverages through a full-service bar, which business is, or is
intended to be, located within the Territory or within a fifteen (15) mile
radius of the location of any O'Charley's restaurant or food service facility in
existence or under construction (or where land has been purchased or a lease has
been executed for the construction of an O'Charley's restaurant or other food
service facility) as of the earlier of: (a) the expiration or termination of, or
the transfer of all of Developer's interest in, this Agreement; or (b) the time
such Controlling Principal ceases to satisfy the definition of Developer's
Principal, as applicable.

         E. Sections IX(C)(2) and (D)(3) shall not apply to ownership of less
than a five percent (5%) beneficial interest in the outstanding equity
securities of any Publicly-Held Entity.

         F. The parties acknowledge and agree that each of the covenants
contained herein are reasonable limitations as to time, geographical area and
scope of activity to be restrained and do not impose a greater restraint than is
necessary to protect the goodwill or other business interests of Licensor. The
parties agree that each of the above covenants shall be construed as independent
of any other covenant or provision of this Agreement. If all or any portion of a
covenant in this Article IX is held unreasonable or unenforceable by a court or
agency having valid jurisdiction in an unappealed or unappealable final decision
to which Licensor is a party, Developer and Controlling Principal expressly
agree to be bound by any lesser covenant subsumed within the terms of such
covenant that imposes the maximum duty permitted by law as if the resulting
covenant were separately stated in and made a part of this Section.

         G. Developer and Controlling Principal understand and acknowledge that
Licensor shall have the right, in its sole discretion, to reduce the scope of
any covenant set forth in Section IX(B), or any portion thereof, without their
consent, effective immediately upon notice to Developer. Developer and
Controlling Principal agree that they shall immediately comply with any covenant
as so modified, which shall be fully enforceable notwithstanding the provisions
of Section XV(A).

         H. Developer and Controlling Principal expressly agree that the
existence of any claims they may have against Licensor whether or not arising
from this Agreement, shall not constitute a defense to the enforcement by
Licensor of the covenants in this Article IX. Developer and Controlling
Principal agree to pay all costs and expenses (including reasonable attorneys'
fees) incurred by Licensor in connection with the enforcement of this Section.

         I. Developer shall require and obtain the execution of covenants
similar to those set forth in Sections IX(C) and (D) (including covenants
applicable upon the termination of a person's employment with Developer) from
each Principal who is not required to sign this Agreement as a Controlling
Principal. Such covenants shall be substantially in the form set forth in
Attachment C. Licensor reserves the right, in its sole discretion, to decrease
the period of time or geographic scope of the non-competition covenant set forth
in Attachment C or eliminate such

                                       31
<PAGE>

non-competition covenant altogether for any party that is required to execute
such agreement under this Article IX.

         J. Developer and Controlling Principal acknowledge that a violation of
this Section would result in irreparable injury to Licensor for which no
adequate remedy at law may be available, and Developer and Controlling Principal
accordingly consent to the issuance of an injunction prohibiting any conduct by
Developer or any Controlling Principal in violation of the terms of this
Section. Developer and Controlling Principal agree to pay all court costs and
reasonable legal fees incurred by Licensor in obtaining specific performance,
injunctive relief or any other remedy available to Licensor for any violation of
the requirements of this Section.

         K. Notwithstanding anything else in this Article IX to the contrary, if
there is a state specific non-competition and/or non-solicitation addendum
attached to this Agreement, the terms of such addendum shall supersede the terms
of this Article IX to the extent they are inconsistent with one another.

                                   ARTICLE X
                   INDEPENDENT CONTRACTOR AND INDEMNIFICATION

         A. The parties acknowledge and agree that this Agreement does not
create a fiduciary relationship between them, that Developer shall be an
independent contractor and that nothing in this Agreement is intended to
constitute either party an agent, legal representative, subsidiary, Affiliate,
joint venturer, partner, employee, joint employer or servant of the other for
any purpose.

         B. During the term of this Agreement, Developer shall hold itself out
to the public as an independent contractor conducting its development operations
pursuant to development rights granted by Licensor. Developer agrees to take
such action as shall be necessary to that end, including, without limitation,
exhibiting a notice of that fact in a conspicuous place in any Restaurant
established under any Operating Agreement for the purposes hereunder, the
content and form of which Licensor reserves the right to specify in writing.

         C. Developer understands and agrees that nothing in this Agreement
authorizes Developer or any Controlling Principal to make any contract,
agreement, warranty or representation on Licensor's behalf, or to incur any debt
or other obligation in Licensor's name and that Licensor shall in no event
assume liability for, or be deemed liable under this Agreement as a result of
any such action or for any act or omission of Developer or any Controlling
Principal, or any claim or judgment arising therefrom.

         D. (1) Developer and each Controlling Principal shall indemnify and
hold harmless Licensor and its Affiliates and their respective officers,
directors, shareholders, employees, managers, members, agents and
representatives from any and all claims, demands, suits, proceedings, fines,
losses, liabilities damages, costs and expenses (including reasonable attorneys'
fees) suffered or incurred, directly or indirectly, by any one or more of them
(collectively, "Damages") as a result of (a) any breach or other failure by
Developer, Operating Principal or any Controlling Principal to perform its or
his obligations hereunder or under any other instrument or agreement executed in
connection herewith, or (b) any other action or

                                       32
<PAGE>

inaction by Developer, Operating Principal, any Controlling Principal or any
other person resulting from or in connection with the operation of any
Restaurant; provided, however, that neither Developer, Operating Principal nor
any Controlling Principal shall be liable for Damages resulting from Licensor's
or its Affiliates' or their respective officers, directors' and employees' gross
negligence, negligence or willful misconduct.

                  (2) Developer and each Controlling Principal agree to give
Licensor immediate notice of any such action, suit, proceeding, claim, demand,
inquiry or investigation. Licensor shall have the option, in its sole
discretion, to defend any action seeking Damages as a result of any action or
inaction by Developer or any other person resulting from or in connection with
the operation of the Restaurant or to allow Developer to defend such action with
counsel satisfactory to Licensor.

                  (3) Developer and Controlling Principal expressly agree that
the terms of this Section X(D) shall survive the termination, expiration or
transfer of this Agreement or any interest herein.

                                   ARTICLE XI
                                    APPROVALS

         A. Whenever this Agreement requires the prior approval or consent of
Licensor or Developer, the party seeking such approval or consent shall make a
timely written request for the approval or consent. Such approval or consent, if
granted, must be obtained in writing.

         B. Licensor makes no warranties or guarantees upon which Developer may
rely and assumes no liability or obligation to Developer or any third party to
which it would not otherwise be subject, by providing any waiver, approval,
advice, consent or suggestion to Developer in connection with this Agreement or
the construction of restaurants, or by reason of any neglect, delay or denial of
any request therefor.

                                  ARTICLE XII
                             NON-WAIVER AND REMEDIES

         A. No delay, waiver, omission or forbearance on the part of Licensor to
exercise any right, option, duty or power arising out of any breach or default
by Developer or any Controlling Principal under this Agreement shall constitute
a waiver by Licensor to enforce any such right, option, duty or power against
Developer or Controlling Principal, or as to a subsequent breach or default by
Developer or any Controlling Principal. Acceptance by Licensor of any payments
due to it hereunder subsequent to the time at which such payments are due shall
not be deemed to be a waiver by Licensor of any preceding breach by Developer or
any Controlling Principal of any terms, provisions, covenants or conditions of
this Agreement.

         B. All rights and remedies of the parties to this Agreement shall be
cumulative and not alternative, in addition to and not exclusive of any other
rights or remedies which are provided for herein or which may be available at
law or in equity in case of any breach, failure or default or threatened breach,
failure or default of any term, provision or condition of this Agreement or any
other agreement between Developer, or its Affiliates, and Licensor or its
Affiliates. The rights and remedies of the parties to this Agreement shall be
continuing and shall

                                       33
<PAGE>

not be exhausted by any one or more uses thereof and may be exercised at any
time or from time to time as often as may be expedient. Any option or election
to enforce any such right or remedy may be exercised or taken at any time and
from time to time. The expiration, earlier termination or exercise of Licensor's
rights pursuant to Article VII of this Agreement shall not discharge or release
Developer or any Controlling Principal from any liability or obligation then
accrued, or any liability or obligation continuing beyond, or arising out of,
the expiration, the earlier termination or the exercise of such rights under
this Agreement. The non-prevailing party (as determined by the presiding
official) shall pay all court costs and attorneys' fees incurred by the
prevailing party in any proceeding to enforce or defend such party's rights with
respect to any violation of this Agreement.

                                  ARTICLE XIII
                                     NOTICES

         All notices and other communications required or permitted to be given
hereunder shall be deemed given when delivered in person, by overnight courier
service, facsimile transmission or mailed by registered or certified mail
addressed to the recipient at the address set forth below, unless that party
shall have given written notice of change of address to the sending party, in
which event the new address so specified shall be used.

Notices to Licensor:                 O'Charley's Inc.
                                     3038 Sidco Drive
                                     Nashville, Tennessee 37204
                                     Attention: Vice President of Franchising
                                     Facsimile: (615) 782-5043

Notices to Developer and             Four Star Restaurant Group, LLC
the Controlling Principal:           419 Elm Street
                                     P.O. Box 266
                                     Uehling, Nebraska 68063
                                     Attention:  Michael R. Johnson
                                     Facsimile:
                                               -----------------------------

                                  ARTICLE XIV
                          SEVERABILITY AND CONSTRUCTION

         A. Except as expressly provided to the contrary herein, each portion,
section, part, term and provision of this Agreement shall be considered
severable. If for any reason any portion, section, part, term or provision is
determined to be invalid and contrary to, or in conflict with, any existing or
future law or regulation by a court or agency having valid jurisdiction, this
shall not impair the operation of, or have any other effect upon, the other
portions, sections, parts, terms or provisions of this Agreement that may remain
otherwise intelligible, and the latter shall continue to be given full force and
effect and bind the parties. The invalid portions, sections, parts, terms or
provisions shall be deemed not to be part of this Agreement and there shall be
automatically added such portion, section, part, term or provision as similar as
possible to that which was severed which shall be valid and not contrary to or
in conflict with any law or regulation.

                                       34
<PAGE>

         B. Except as expressly provided to the contrary herein, nothing in this
Agreement is intended, nor shall be deemed to, confer upon any person or legal
Entity, other than Developer and Licensor, Licensor's officers, directors and
personnel and such of Developers and Licensors respective successors and assigns
as may be contemplated (and, as to Developer, authorized by Article VIII), any
rights or remedies under or as a result of this Agreement.

         C. All captions in this Agreement are intended solely for the
convenience of the parties and shall not affect the meaning or construction of
any provision of this Agreement.

         D. All references to the masculine, neuter or singular shall be
construed to include the masculine, feminine, neuter or plural, where
applicable. Without limiting the obligations individually undertaken by
Controlling Principal under this Agreement, all acknowledgments, promises,
covenants, agreements and obligations made or undertaken by Developer in this
Agreement shall be deemed, jointly and severally, undertaken by Controlling
Principal.

         E. The term "Principal" shall mean, collectively and individually,
Developer's spouse, if Developer is an individual; all officers and directors of
Developer (including the officers and directors of any general partner of
Developer) whom Licensor designates as Principal and all holders of an ownership
interest in Developer and of any Entity directly or indirectly controlling
Developer, and any other person or Entity controlling, controlled by or under
common control with Developer. Each Principal as of the date of this Agreement
is listed on Attachment D.

         F. For purposes of this Agreement, the term "Publicly-Held Entity"
means any Entity with a class of securities registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended, or an Entity subject to the
requirements of Section 15(d) of such Act. Further, for purposes of this
Agreement, an "Affiliate" of a person or Entity is any person or Entity that is
controlled by, controlling or under common control with such person or Entity.

         G. This Agreement may be executed in counterparts and each copy so
executed shall be deemed an original.

         H. This Agreement shall not become effective until signed by an
authorized officer of Licensor.

         I. The word "including" when used herein shall mean "including without
limitation."

                                   ARTICLE XV
                        ENTIRE AGREEMENT; APPLICABLE LAW

         A. This Agreement, the documents referred to herein and the Attachments
hereto, constitute the entire, full and complete agreement between Licensor,
Developer and Controlling Principal concerning the subject matter hereof and
shall supersede all prior related agreements between Licensor, Developer and
Controlling Principal. Except for those permitted to be made unilaterally by
Licensor hereunder, no amendment, change or variance from this Agreement shall
be binding on either party unless mutually agreed to by the parties and executed
by' their authorized officers or agents in writing.

                                       35

<PAGE>

         B. Developer and Controlling Principal hereby irrevocably submit
themselves to the jurisdiction of the state and the federal district courts
located in the state, county or judicial district in which the Licensor's
principal place of business is located at the time such proceeding is commenced.
Developer and Controlling Principal hereby waive all questions of personal
jurisdiction at the time such proceeding is commenced for the purpose of
carrying out this provision. Developer and Controlling Principal hereby agree
that service of process may be made upon any of them in any proceeding relating
to or arising out of this Agreement or the relationship created by this
Agreement by any means allowed by applicable state or federal law. Developer and
Controlling Principal further agree that venue for any proceeding relating to or
arising out of this Agreement shall be the county or judicial district in which
Licensor's principal place of business is located at the time such proceeding is
commenced; provided, however, with respect to any action (1) for monies owed,
(2) for injunctive or other extraordinary relief or (3) involving possession or
disposition of, or other relief relating to, the Restaurant premises, Licensor
may bring such action in any state or federal district court which has
jurisdiction. With respect to all claims, controversies, disputes or actions
related to this Agreement or the relationship created thereby. This Agreement
and any such related claims, controversies, disputes or actions, shall be
governed, enforced and interpreted under the law of the State of Tennessee,
without regard to its conflicts of law rules.

         C. Developer, Controlling Principal and Licensor acknowledge that each
party's agreement regarding applicable state law and forum set forth in Section
XV(B) above provides each of the parties with the mutual benefit of uniform
interpretation of this Agreement and any dispute arising out of this Agreement
or the parties' relationship created by this Agreement. Each of Developer,
Controlling Principal and Licensor further acknowledges the receipt and
sufficiency of mutual consideration for such benefit, and that each party's
agreement regarding applicable state law and choice of forum has been negotiated
in good faith and is part of the benefit of the bargain reflected by this
Agreement.

         D. Developer, Controlling Principal and Licensor acknowledge that the
execution of this Agreement and acceptance of the terms by the parties occurred
at Licensor's principal place of business, and further acknowledge that the
performance of certain obligations of Developer arising under this Agreement,
including, but not limited to, the payment of monies due hereunder, shall occur
where Licensor's principal place of business is located at the time such
obligation is due.

         E. Without limiting any of the foregoing, Developer and each
Controlling Principal acknowledge and agree that Licensor has the right, at any
time, to create a dispute resolution program and related specifications,
standards, procedures and rules for the implementation thereof to be
administered by Licensor or its designees for the benefit of all developers
conducting business under the System. The standards, specifications, procedures
and rules for such dispute resolution program shall be made part of the Manuals,
and Developer and Controlling Principal shall comply with all such standards,
specifications, procedures and rules in seeking resolution of any claims,
controversies or disputes with or involving Licensor or other developers or
operators, if applicable under the program. If Licensor, in its sole discretion,
makes such dispute resolution program mandatory, then Developer, Controlling
Principal and Licensor hereby agree to submit any claims, controversies or
disputes arising out of or relating to this Agreement or the relationship
created by this Agreement for resolution in accordance with

                                       36
<PAGE>

such dispute resolution program, or if such claim, controversy or dispute
relates to another developer or operator, Developer and Controlling Principal
agree to participate in the program and submit any such claims, controversies or
disputes in accordance with the program's standards, specifications, procedures
and rules, prior to seeking resolution of such claim by any other judicial or
legally available means.

         F. Developer and Controlling Principal hereby waive, to the fullest
extent permitted by law, any right to or claim of any punitive, exemplary,
incidental, indirect, special, consequential or other damages (including,
without limitation, loss of profits) against Licensor, its Affiliates, and their
respective officers, directors, shareholders, members, partners, agents,
representatives, independent contractors, servants and employees, in their
corporate and individual capacities, arising out of any cause whatsoever
(whether such cause be based in contract, negligence, strict liability, other
tort or otherwise) and agree that in the event of a dispute, Developer and
Controlling Principal shall be limited to the recovery of any actual damages
sustained by them. If any other term of this Agreement is found or determined to
be unconscionable or unenforceable for any reason, the foregoing provisions of
waiver by agreement of punitive, exemplary, incidental, indirect, special,
consequential or other damages (including, without limitation, loss of profits)
shall continue in full force and effect.

         G. Licensor, Developer and Controlling Principal hereby agree that no
form of proceeding permitted hereby will be maintained by any party to enforce
any liability or obligation of the other party, whether arising from this
Agreement or otherwise, unless brought before the expiration of the later of:
(i) one (1) year after the date of discovery of the facts resulting in such
liability or obligation; or (ii) two (2) years after the date of the first act
or omission giving rise to the alleged liability or obligation, except that
where state or federal law mandate or make possible by notice or otherwise a
shorter period, such shorter period shall apply.

         H. Any obligation of Developer or Controlling Principal that
contemplates performance of such obligation after termination or expiration of
this Agreement or the transfer of any interest of Developer or Controlling
Principal therein, shall be deemed to survive such termination, expiration or
transfer, including the provisions of this Article XV.

         I. Developer, Controlling Principal and Licensor acknowledge that
various provisions of this Agreement specify certain matters that are within the
discretion or judgment of Licensor or are otherwise to be determined
unilaterally by Licensor. If the exercise of Licensor's discretion or judgment
as to any such matter is subsequently challenged, the parties to this Agreement
expressly direct the trier of fact that Licensor's reliance on a business reason
in the exercise of its discretion or judgment is to be viewed as a reasonable
and proper exercise of such discretion or judgment, without regard to whether
other reasons for its decision may exist and without regard to whether the trier
of fact would independently accord the same weight to the business reason.

                                       37
<PAGE>

                                  ARTICLE XVI
                                 ACKNOWLEDGMENTS

         A. Developer acknowledges that it has conducted an independent
investigation of the business venture contemplated by this Agreement and
recognizes that the success of this business venture involves substantial
business risks and will largely depend upon the ability of Developer. Licensor
expressly disclaims making, and Developer acknowledges that it has not received
or relied on, any warranty or guarantee, express or implied, as to the potential
volume, profits or success of the business venture contemplated by this
Agreement.

         B. Developer acknowledges that Developer has received, read and
understands this Agreement and the related Attachments and Agreements and that
Licensor has afforded Developer sufficient time and opportunity to consult with
advisors selected by Developer about the potential benefits and risks of
entering into this Agreement.

         C. Developer acknowledges that it received a complete copy of this
Agreement and all related Attachments and Agreements at least five (5) business
days prior to the date on which this Agreement was executed. Developer further
acknowledges that it has received the disclosure document required by the Trade
Regulation Rule of the Federal Trade Commission entitled "Disclosure
Requirements and Prohibitions Concerning Franchising and Business Opportunity
Ventures" at least ten (10) business days prior to the date on which this
Agreement was executed.

                  (remainder of page intentionally left blank)

                                       38

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement on the day and year first above written.

                                        LICENSOR:

                                        O'CHARLEY'S INC.,
                                        a Tennessee corporation

                                        By: /s/ Edward C. Hastings
                                            ------------------------------------
                                            Edward C. Hastings,
                                            Vice President of Franchising

                                        DEVELOPER:

                                        Four Star Restaurant Group, LLC

                                        By: /s/ Michael R. Johnson
                                           -------------------------------------
                                           Michael R. Johnson,
                                           President and Chief Operating Officer

                                        CONTROLLING PRINCIPAL:

                                        /s/  Michael R. Johnson
                                        ----------------------------------------
                                        Michael R. Johnson

                                       39

<PAGE>

                                   SCHEDULE 1
                            TO DEVELOPMENT AGREEMENT

1. TERRITORY: The exclusive Territory includes in the state of Iowa the
following: Cedar Rapids-Waterloo-Iowa City & Dubuque DMA and Des Moines-Ames DMA
and the counties of Henry, Des Moines, Louisa, Muscatine, Scott, Clinton and
Jackson in the Davenport-Rock Island-Moline DMA. In the state of South Dakota
the following DMA: Sioux Falls (Mitchell). In the state of Nebraska the
following DMAs: Sioux City, Lincoln & Hastings-Kearney, Omaha and North Platte.
In the state of Kansas the following DMA: Topeka.

2. DEVELOPMENT SCHEDULE:

<TABLE>
<CAPTION>

                                                      CUMULATIVE TOTAL NUMBER OF RESTAURANTS
                              EXPIRATION DATE OF     LOCATED IN THE TERRITORY WHICH DEVELOPER
     DEVELOPMENT PERIOD       DEVELOPMENT PERIOD       SHALL HAVE OPEN AND IN OPERATION*
------------------------------------------------------------------------------------------
<S>                           <C>                     <C>
           One                 April 1, 2006*                           1
------------------------------------------------------------------------------------------
           Two                October 31, 2006*                         2
------------------------------------------------------------------------------------------
          Three                 June 30, 2007                           3
------------------------------------------------------------------------------------------
          Four                October 31, 2007                          4
------------------------------------------------------------------------------------------
          Five                  June 30, 2008                           5
------------------------------------------------------------------------------------------
           Six                October 31, 2008                          6
------------------------------------------------------------------------------------------
          Seven                 June 30, 2009                           7
------------------------------------------------------------------------------------------
          Eight               October 31, 2009                          8
------------------------------------------------------------------------------------------
          Nine                  June 30, 2010                           9
------------------------------------------------------------------------------------------
           Ten                October 31, 2011                         10
------------------------------------------------------------------------------------------
</TABLE>

* Additional 90-day extension option.

3. PROJECTED OPENING DATES:

<TABLE>
<CAPTION>

              RESTAURANT                 PROJECTED OPENING DATE
------------------------------------------------------------------------
<S>                                      <C>
                  One                        April 1, 2006*
------------------------------------------------------------------------
                  Two                       October 31, 2006*
------------------------------------------------------------------------
                 Three                        June 30, 2007
------------------------------------------------------------------------
                 Four                       October 31, 2007
------------------------------------------------------------------------
                 Five                         June 30, 2008
-----------------------------------------------------------------------
                  Six                       October 31, 2008
------------------------------------------------------------------------
                 Seven                        June 30, 2009
------------------------------------------------------------------------
                 Eight                      October 31, 2009
------------------------------------------------------------------------
                 Nine                         June 30, 2010
------------------------------------------------------------------------
                  Ten                       October 31, 2011
-----------------------------------------------------------------------
</TABLE>

<PAGE>

                                  ATTACHMENT A
                            TO DEVELOPMENT AGREEMENT

                                O'CHARLEY'S INC.
                               OPERATING AGREEMENT

                      (See Exhibit C of Offering Circular)

                                      A-1
<PAGE>

                                  ATTACHMENT B
                            TO DEVELOPMENT AGREEMENT

                                   LEASE RIDER

         This Lease Rider is made and entered into this ____ day of ___________,
20_____ by and between O'CHARLEY'S INC., a Tennessee corporation ("Licensor"),
_________________ ("Operator") and ____________________ ("Landlord").

         WHEREAS, Licensor and Operator are parties to that certain Development
Agreement dated as of _____________, 20___ ("Development Agreement");

         WHEREAS, Operator and Landlord desire to enter into a lease (the
"Lease") pursuant to which Operator will occupy the premises located at
___________________________________ (the "Premises") for a full-service
O'Charley's restaurant (the "Restaurant") licensed under the Development
Agreement and an Operating Agreement to be executed between Licensor and
Operator prior to the opening of the Restaurant (the "Operating Agreement"); and

         WHEREAS, as a condition to entering into the Lease, the Operator is
required under the Operating Agreement to execute this Lease Rider along with
the Landlord and Licensor;

         NOW, THEREFORE, in consideration of the mutual undertakings and
commitments set forth herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

         (1) During the term of the Operating Agreement, the Premises shall be
used only for the operation of the Restaurant.

         (2) Landlord consents to Operator's use of such proprietary marks
("Proprietary Marks") and signs, neons, interior and exterior decor items, color
schemes, plans, specifications and related components of the O'Charley's
restaurant system ("System") as Licensor has prescribed, and may in the future
prescribe, for the Restaurant.

         (3) Landlord agrees to send Licensor copies of any and all letters and
notices sent to Operator pertaining to the Lease and the Premises at the same
time that such letters and notices are sent to Operator.

         (4) Licensor shall have the right to enter the Premises to make any
modification or alteration necessary to protect the O'Charley's Restaurant, the
System and Proprietary Marks or to cure any default under the Operating
Agreement or any development agreement entered into between Licensor and
Operator or under the Lease, without being guilty of trespass or any other crime
or tort.

         (5) In the event of Operator's default under the terms of the Lease,
Licensor may, but is not required, to cure the default and may assume the lease
in Licensor's name. Licensor shall make this determination within thirty (30)
days after Licensor receives notice of the default. If Licensor elects to cure
the default, Licensor shall cure the default within thirty (30) days of such

                                      B-1
<PAGE>

election or, if the default cannot be reasonably cured within such thirty (30)
day period, then Licensor shall commence and proceed to cure the default within
such time as is reasonably necessary to cure the default. If Licensor also
elects to assume the Lease, Landlord agrees to recognize Licensor as the Tenant
under the Lease and Operator shall no longer have any rights thereunder.

         (6) Operator shall be permitted to assign the Lease to Licensor or to
Licensor's assignees upon the expiration or earlier termination of the Operating
Agreement and the Landlord hereby consents to such assignment and agrees not to
impose or assess any assignment fee or similar charge or increase or accelerate
rent under the Lease in connection with such assignment, or require Licensor to
pay any past due rent or other financial obligation of Operator to Landlord, it
being understood that Landlord shall look solely to the Operator for any rents
or other financial obligations owed to Landlord prior to such assignment.
Landlord and Operator acknowledge that Licensor is not a party to the Lease and
shall have no liability under the Lease, unless and until the Lease is assigned
to, and assumed by, Licensor.

         (7) Except for the Operator's obligations to Landlord for rents and
other financial obligations accrued prior to the assignment of the Lease, in the
event of such assignment, Licensor or any assignee designated by Licensor will
agree to assume from the date of assignment all obligations of Operator
remaining under the Lease, and in such event Licensor or any affiliate shall
assume Operator's occupancy rights, Operator's rights under any renewal or
purchase options, and the right to sublease the Premises, for the remainder of
the term of the Lease including any applicable renewal periods.

         (8) Notwithstanding anything contained in this Lease Rider and in the
Lease, Licensor is expressly authorized, without the consent of the Landlord, to
sublet the Leased Premises to an authorized franchisee, provided such subletting
is specifically subject to the terms of this Lease and further provided the
franchisee expressly assumes all obligations of the Lease. Licensor agrees to
notify Landlord as to the name of the franchisee within then (10) days after
such subletting.

         (9) Operator shall not assign the Lease or renew or extend the term
thereof without the prior written consent of Licensor.

         (10) Landlord and Operator shall not amend or otherwise modify the
Lease in any manner that could materially affect any of the foregoing
requirements without the prior written consent of Licensor.

         (11) The terms of this Lease Rider will supersede any conflicting terms
of the Lease.

                  [remainder of page intentionally left blank]

                                      B-2
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Lease Rider as of
the date first above written.

                                       O'CHARLEY'S INC.
                                       a Tennessee corporation

                                       By:
                                           -------------------------------------
                                           Name:
                                                 -------------------------------
                                           Title:
                                                 -------------------------------

                                      OPERATOR:

                                      ------------------------------------------

                                      By:
                                          --------------------------------------
                                          Name:
                                                --------------------------------
                                          Title:
                                                --------------------------------

                                      LANDLORD:

                                      ------------------------------------------

                                      By:
                                          --------------------------------------
                                          Name:
                                                --------------------------------
                                           Title:
                                                  ------------------------------

                                      B-3
<PAGE>

                                  ATTACHMENT C
                            TO DEVELOPMENT AGREEMENT

                    CONFIDENTIALITY AND NON-COMPETE AGREEMENT

         This Agreement is made and entered into this 28th day of March, 2005,
between O'Charley's Inc., a Tennessee corporation ("Licensor"), Four Star
Restaurant Group, LLC ("Developer") and Michael R. Johnson ("Covenantor").

                                    RECITALS:

         WHEREAS, Licensor, as a result of the expenditure of time, skill,
effort and money, has developed and owns the rights to develop and operate a
unique system (the "System") of full service varied menu casual dining
restaurants ("Restaurants") which feature freshly prepared items such as
hand-cut and aged steaks, fresh chicken, seafood, homemade yeast rolls and
fresh-cut salads with special recipe dressings and which serve alcoholic
beverages through a full-service bar all under the trademark O'Charley's(R);

         WHEREAS, the System includes, but is not limited to, certain trade
names, service marks, trademarks, symbols, logos, emblems and indicia of origin,
including, but not limited to, the mark O'Charley's(R) and such other trade
names, service marks, trademarks, symbols, logos, emblems and indicia of origin
as Licensor may develop in the future to identify for the public the source of
services and products marketed under such marks ("Marks") and under the System;

         WHEREAS, the Marks represent the System's high standards of quality,
appearance and service; distinctive exterior and interior design, decor, color
scheme and furnishings; special recipes and menu items; uniform standards,
specifications and procedures for operations; quality and uniformity of products
and services offered; procedures for inventory and management and financial
control; training and assistance; and advertising and promotional programs; all
of which may be changed, improved and further developed by Licensor from time to
time and are used by Licensor in connection with the operation of the System
("Trade Secrets");

         WHEREAS, the Marks and Trade Secrets provide economic advantages to
Licensor and are not generally known to, and are not readily ascertainable by
proper means by, Licensor's competitors who could obtain economic value from
knowledge and use of the Marks and Trade Secrets;

         WHEREAS, Licensor has taken and intends to take all reasonable steps to
maintain the confidentiality and secrecy of the Trade Secrets;

         WHEREAS, Licensor has granted Developer the limited right to develop
Restaurants using the System, the Marks and the Trade Secrets for the period
defined in the development agreement made and entered into as of March 28, 2005
("Development Agreement"), by and among Licensor, Developer and Developer's
Controlling Principal;

                                      C-1
<PAGE>

         WHEREAS, Licensor and Developer have agreed in the Development
Agreement on the importance to Licensor and to Developer and other licensed
users of the System of restricting the use, access and dissemination of the
Trade Secrets;

         WHEREAS, it will be necessary for certain employees, agents,
independent contractors, officers, directors and interest holders of Developer,
or any Entity having an interest in Developer ("Covenantor") to have access to
and to use some or all of the Trade Secrets in the management and operation of
Developer's business using the System;

         WHEREAS, Developer has agreed to obtain from those Covenantors prior
written agreements protecting the Trade Secrets and the System against unfair
competition;

         WHEREAS, Covenantor wishes to remain with, to become employed by or
associated with Developer;

         WHEREAS, Covenantor wishes and needs to receive and use the Trade
Secrets in the course of Covenantor's employment or association in order to
effectively perform Covenantor's services for Developer; and

         WHEREAS, Covenantor acknowledges that receipt of and the right to use
the Trade Secrets constitutes independent valuable consideration for the
representations, promises and covenants made by Covenantor herein.

         NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and other good and valuable consideration, the
receipt and sufficiency are hereby acknowledged, the parties intending to be
legally bound hereby agree as follows:

1. Confidentiality Agreement

         1.1 Licensor and/or Developer may disclose to Covenantor some or all of
the Trade Secrets relating to the System. All information and materials,
including, without limitation, any manuals, drawings, specifications, techniques
and compilations of data which Licensor provides to Developer and/or Covenantor
shall be deemed confidential Trade Secrets for the purposes of this Agreement.

         1.2 Covenantor shall receive the Trade Secrets in confidence and shall,
at all times, maintain them in confidence, and use them only in the course of
Covenantor's employment by or association with Developer and then only in
connection with the development and/or operation by Developer of Restaurants
using the System for so long as Developer is licensed by Licensor to use the
System.

         1.3 Covenantor shall not at any time make copies of any documents or
compilations containing some or all of the Trade Secrets without Licensor's
prior written consent.

         1.4 Covenantor shall not at any time disclose or permit the disclosure
of the Trade Secrets except to other employees of Developer and then only to the
limited extent necessary to train or assist other employees of Developer in the
development or operation of a Restaurant using the System.

                                      C-2
<PAGE>

         1.5 Covenantor shall immediately surrender any material containing some
or all of Licensor's Trade Secrets to Licensor, upon request, or upon
termination of employment by or association with Developer, or upon conclusion
of the use for which such information or material may have been furnished to
Covenantor.

         1.6 Covenantor shall not at any time, directly or indirectly, do any
act or omit to do any act that would or would likely be injurious or prejudicial
to the goodwill associated with the Trade Secrets and the System.

         1.7 All manuals are loaned by Licensor to Developer for limited
purposes only and remain the property of Licensor and may not be reproduced, in
whole or in part, without Licensor's prior written consent.

2. Covenants Not to Compete

         2.1 In order to protect the goodwill and unique qualities of the System
and the confidentiality and value of the Trade Secrets, and in consideration for
the disclosure to Covenantor of the Trade Secrets, Covenantor further agrees and
covenants that while employed by Developer Covenantor will not:

                  a. Divert, or attempt to divert, directly or indirectly, any
business, business opportunity or customer of the Restaurants to any competitor.

                  b. Employ, or seek to employ, any person who is at the time
(or has been within the preceding six (6) months) employed by Licensor, or any
of its Affiliates, or any operator or developer of Licensor, or otherwise
directly or indirectly induce such person to leave that person's employment,
except as may occur in connection with Developer's employment of such person if
permitted under the Development Agreement.

                  c. Except with respect to Restaurants described in the
Development Agreement and other restaurants operated under operating agreements
between Developer and its Affiliates, and Licensor or its Affiliates, directly
or indirectly, for Covenantor or through, on behalf of, or in conjunction with
any person, persons, partnership, corporation, limited liability company,
association, trust, unincorporated association, joint venture or other Entity,
without the prior written consent of Licensor, own, maintain, operate, engage in
or have any financial or beneficial interest in (including any interest in
corporations, partnerships, limited liability companies, associations, trusts,
unincorporated associations, joint ventures or other entities), advise, assist
or make loans to, any business that operates a full service, varied menu, casual
dining restaurant that features freshly prepared items such as steaks, seafood,
homemade baked goods and fresh cut salads, and that serves alcoholic beverages
through a full-service bar, and which business is located within the United
States, its territories or commonwealths, or any other country, province, state
or geographic area in which Licensor has used, sought registration of or
registered the same or similar Marks or operates or licenses others to operate a
business under the same or similar Marks.

         2.2 In further consideration for the disclosure to Covenantor of the
Trade Secrets and to protect the uniqueness of the System, Covenantor agrees and
covenants that for one (1) year following the earlier of the expiration,
termination or transfer of all of Developer's interest in the

                                      C-3
<PAGE>

Development Agreement or the termination of Covenantor's employment by or
association with Developer, Covenantor will not without the prior written
consent of Licensor:

                  a. Divert or attempt to divert, directly or indirectly, any
business, business opportunity or customer of the Restaurants to any competitor.

                  b. Employ or seek to employ any person who is at the time (or
has been within the preceding six (6) months) employed by Licensor, or any of
its Affiliates, or any operator or developer of Licensor, or otherwise directly
or indirectly induce such persons to leave that person's employment.

                  c. Except with respect to other restaurants operated under
operating agreements between Developer and its Affiliates, and Licensor or its
Affiliates, directly or indirectly, for Covenantor or through, on behalf of or
in conjunction with any person, persons, partnership, corporation, limited
liability company, association, trust, unincorporated association, joint venture
or other Entity own, maintain, operate, engage in or have any financial or
beneficial interest in (including any interest in corporations, partnerships,
limited liability companies, associations, trusts, unincorporated associations,
joint ventures or other entities), advise, assist or make loans to, any business
that operates a full service, varied menu, casual dining restaurant that
features freshly prepared items such as steaks, seafood, homemade baked goods
and fresh cut salads, and that serves alcoholic beverages through a full-service
bar, which business is, or is intended to be, located within the Territory, as
such term is defined in the Development Agreement (and as described in an
attachment thereto), or within a fifteen (15)-mile radius of the location of any
O'Charley's restaurant or food service facility in existence or under
construction (or where land has been purchased or a lease executed for the
construction of an O'Charley's restaurant or other food service facility) as of
the earlier of (i) the expiration or termination of, or the transfer of all of
Developer's interest in, the Development Agreement; or (ii) the time Covenantor
ceases to be employed by or associated with Developer, as applicable.

3. Miscellaneous

         3.1 Developer shall make all commercially reasonable efforts to ensure
that Covenantor acts as required by this Agreement.

         3.2 Covenantor agrees that in the event of a breach of this Agreement,
Licensor would be irreparably injured and be without an adequate remedy at law.
Therefore, in the event of such a breach, or threatened or attempted breach of
any of the provisions hereof, Licensor shall be entitled to enforce the
provisions of this Agreement and shall be entitled, in addition to any other
remedies which are made available to it at law or in equity (including any right
to terminate the Development Agreement or any operating agreement, as provided
therein), to a temporary and/or permanent injunction and a decree for the
specific performance of the terms of this Agreement, without the necessity of
showing actual or threatened harm and without being required to furnish a bond
or other security.

         3.3 Covenantor agrees to pay all expenses (including court costs and
reasonable attorneys' fees) incurred by Licensor and Developer in enforcing this
Agreement.

                                      C-4
<PAGE>

         3.4 Any failure by Licensor or the Developer to object to or take
action with respect to any breach of any provision of this Agreement by
Covenantor shall not operate or be construed as a waiver of or consent to that
breach or any subsequent breach by Covenantor.

         3.5 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE, WITHOUT REFERENCE TO CHOICE
OF LAW PRINCIPLES. COVENANTOR HEREBY IRREVOCABLY SUBMITS HIMSELF TO THE
JURISDICTION OF THE STATE AND THE FEDERAL DISTRICT COURTS LOCATED IN THE STATE,
COUNTY OR JUDICIAL DISTRICT IN WHICH THE LICENSOR'S PRINCIPAL PLACE OF BUSINESS
IS LOCATED. COVENANTOR HEREBY WAIVES ALL QUESTIONS OF PERSONAL JURISDICTION OR
VENUE FOR THE PURPOSE OF CARRYING OUT THIS PROVISION. COVENANTOR HEREBY AGREES
THAT SERVICE OF PROCESS MAY BE MADE UPON HIM IN ANY PROCEEDING RELATING TO OR
ARISING UNDER THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS AGREEMENT BY
ANY MEANS ALLOWED BY APPLICABLE STATE OR FEDERAL LAW. COVENANTOR FURTHER AGREES
THAT VENUE FOR ANY PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL
BE THE COUNTY OR JUDICIAL DISTRICT IN WHICH LICENSOR'S PRINCIPAL PLACE OF
BUSINESS IS LOCATED AT THE TIME SUCH PROCEEDING IS COMMENCED; PROVIDED, HOWEVER,
WITH RESPECT TO ANY ACTION WHICH INCLUDES INJUNCTIVE RELIEF OR OTHER
EXTRAORDINARY RELIEF, LICENSOR OR DEVELOPER MAY BRING SUCH ACTION IN ANY COURT
IN ANY STATE WHICH HAS JURISDICTION.

         3.6 The parties acknowledge and agree that each of the covenants
contained herein are reasonable limitations as to time, geographical area, and
scope of activity to be restrained and do not impose a greater restraint than is
necessary to protect the goodwill or other business interests of Licensor. The
parties agree that each of the foregoing covenants shall be construed as
independent of any other covenant or provision of this Agreement. If all or any
portion of a covenant in this Agreement is held unreasonable or unenforceable by
a court or agency having valid jurisdiction in any unappealed final decision to
which Licensor is a party, Covenantor expressly agrees to be bound by any lesser
covenant subsumed within the terms of such covenant that imposes the maximum
duty permitted by law, as if the resulting covenant were separately stated in
and made a part of this Agreement.

         3.7 This Agreement contains the entire agreement of the parties
regarding the subject matter hereof. This Agreement may be modified only by a
duly authorized writing executed by all parties.

         3.8 All notices and demands required to be given hereunder shall be in
writing and shall be sent by personal delivery, expedited delivery service,
certified or registered mail, return receipt requested, first-class postage
prepaid, facsimile, telegram or telex (provided that the sender confirms the
facsimile, telegram or telex by sending an original confirmation copy by
certified or registered mail or expedited delivery service within three (3)
business days after transmission), to the respective parties at the following
addresses unless and until a different address has been designated by written
notice to the other parties.

                                      C-5
<PAGE>

         If directed to Licensor, the notice shall be addressed to:

                  O'Charley's Inc.
                  3038 Sidco Drive
                  Nashville, TN 37204
                  Attention: Vice President of Franchising
                  Facsimile: (615) 782-5043

         If directed to Developer, the notice shall be addressed to:

                  Four Star Restaurant Group, LLC
                  419 Elm Street
                  P.O. Box 266
                  Uehling, Nebraska 68063
                  Attention: Michael R. Johnson
                  Facsimile:
                            --------------------------

         If directed to Covenantor, the notice shall be addressed to:

                  419 Elm Street
                  P.O. Box 266
                  Uehling, Nebraska 68063
                  Attention: Michael R. Johnson
                  Facsimile:
                            --------------------------

Any notices sent by personal delivery shall be deemed given upon receipt. Any
notices given by telex or facsimile shall be deemed given upon transmission,
provided confirmation is made as provided above. Any notice sent by expedited
delivery service or registered or certified mail shall be deemed given three (3)
business days after the time of mailing. Any change in the foregoing addresses
shall be effected by giving fifteen (15) days written notice of such change to
the other parties. Business days for the purpose of this Agreement excludes
Saturday, Sunday and the following national holidays: New Year's Day, Martin
Luther King Day, Presidents' Day, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans' Day, Thanksgiving and Christmas.

         3.9 The, rights and remedies of Licensor under this Agreement are fully
assignable and transferable and shall inure to the benefit of its respective
Affiliates, successors and assigns. The respective obligations of Developer and
Covenantor hereunder may not be assigned by Developer or Covenantor, without the
prior written consent of Licensor.

                  (remainder of page intentionally left blank)

                                      C-6
<PAGE>

         IN WITNESS WHEREOF, the undersigned have entered into this Agreement as
witnessed by their signatures

                                       LICENSOR:

                                       O'Charley's Inc.,
                                       a Tennessee corporation

                                       By: /s/ Edward C. Hastings
                                           ------------------------------------
                                           Edward C. Hastings,
                                           Vice President of Franchising

                                       OPERATOR:

                                       Four Star Restaurant Group, LLC

                                       By: /s/ Michael R. Johnson
                                           ------------------------------------
                                           Michael R. Johnson,
                                           President and Chief Operating Officer

                                       COVENANTOR:

                                       By: /s/ Michael R. Johnson
                                           ------------------------------------
                                           Michael R. Johnson

                                      C-7

<PAGE>

                                  ATTACHMENT D
                            TO DEVELOPMENT AGREEMENT

                 STATEMENT OF OWNERSHIP INTERESTS AND PRINCIPAL

A.       The following is a list of stockholders, members, partners or other
         investors in Developer, including, all investors who own or hold a
         direct or indirect interest in Developer, and a description of the
         nature of their interest:

<TABLE>
<CAPTION>

                  Name               Percentage of Ownership/Nature of Interest
                 -----               ------------------------------------------
        <S>                          <C>
         Michael R. Johnson          100%

</TABLE>

A.       The following is a list of all Principal described in and designated
         pursuant to Section XIV(E) of the Development Agreement, each of whom
         shall execute the Confidentiality and Non-Compete Agreement
         substantially in the form set forth in Attachment C (see Sections
         IX(B)(2) and IX(I) of the Development Agreement):

                  Name
                  ----

         Michael R. Johnson

B.       The following is a list of all of Developer's Controlling Principal
         described in and designated pursuant to Section XIV(E) of the
         Development Agreement.

                  Name
                  ----

         Michael R. Johnson

                                      D-1
<PAGE>

                                  ATTACHMENT E
                            TO DEVELOPMENT AGREEMENT

                                    GUARANTY

         Each of the undersigned acknowledges and agrees as follows:

         Each has read the terms and conditions of the Development Agreement
(the "Development Agreement") dated as of March 28, 2005 by and among
O'Charley's Inc., a Tennessee corporation ("Licensor"), Four Star Restaurant
Group, LLC, a Nebraska limited liability company ("Developer"), Michael R.
Johnson (the "Controlling Principal"), and acknowledges that the execution of
this guaranty and the undertakings of the Controlling Principal in the
Development Agreement are in partial consideration for, and a condition to, the
granting of the development rights in the Development Agreement, and that
Licensor would not have granted such rights without the execution of this
guaranty and such undertakings by each of the undersigned;

         (1) Each is included in the term "Controlling Principal" as described
in Section XIV(E) of the Development Agreement;

         (3) Each individually, jointly and severally, makes all of the
representations, warranties, covenants and agreements of the Controlling
Principal set forth in the Development Agreement and is obligated to perform
thereunder; and

         (4) Each individually, jointly and severally, unconditionally and
irrevocably guarantees to Licensor and its successors and assigns that all of
Developer's obligations under the Development Agreement will be punctually paid
and performed. Upon default by Developer or upon notice from Licensor, each will
immediately make each payment and perform each obligation required of Developer
under the Development Agreement. Without affecting the obligations of any of the
Controlling Principal under this guaranty, Licensor may, without notice to the
Controlling Principal, waive, renew, extend, modify, amend or release any
indebtedness or obligation of Developer, or settle, adjust or compromise any
claims that Licensor may have against Developer. Each of the Controlling
Principal waives all demands and notices of every kind with respect to the
enforcement of this guaranty, including, without limitation, notice of
presentment, demand for payment or performance by Developer, any default by
Developer or any guarantor and any release of any guarantor or other security
for this guaranty or the obligations of Developer. Licensor may pursue its
rights against any of the Controlling Principal without first exhausting its
remedies against Developer and without joining any other guarantor hereto and no
delay on the part of Licensor in the exercise of any right or remedy shall
operate as a waiver of such right or remedy, and no single or partial exercise
by Licensor of any right or remedy shall preclude the further exercise of such
right or remedy. Upon receipt by Licensor of notice of the death of any of the
Controlling Principal, the estate of the deceased will be bound by the foregoing
guaranty, but only for defaults and obligations under the Development Agreement
existing at the time of death, and in such event, the obligations of the
remaining Controlling Principal shall continue in full force and effect.

                                      E-1
<PAGE>

         Additionally, with respect to the individual designated as the
Operating Principal, the Operating Principal acknowledges that the undertakings
by the Operating Principal under this guaranty are made and given in partial
consideration of, and as a condition to, Licensor's grant of rights to develop
Restaurants as described herein. The Operating Principal individually, jointly
and severally, makes all of the covenants, representations and agreements of
Developer and the Operating Principal set forth in the Development Agreement and
is obligated to perform hereunder.

                                         THE CONTROLLING PRINCIPAL:

                                         By: /s/ Michael R. Johnson
                                             -----------------------------------
                                                  Michael R. Johnson, Member

                                         /s/ Michael R. Johnson
                                         ---------------------------------------
                                         Michael R. Johnson, Individually

                                      E-2

<PAGE>
                                  AMENDMENT TO
                              DEVELOPMENT AGREEMENT
                         FOUR STAR RESTAURANT GROUP, LLC

         This Addendum outlines Special Development Procedures ("Procedures")
between O'Charley's Inc., a Tennessee corporation ("Licensor"), Four Star
Restaurant Group, LLC, a Nebraska limited liability company ("Developer") and
Michael R. Johnson, an individual. Michael R. Johnson is the "Controlling
Principal".

         The Procedures shall be incorporated into, and considered part of, the
Development Agreement that is entered into between Licensor and Developer and
Controlling Principal regarding Developer's development of O'Charley's
restaurants. Notwithstanding anything to the contrary provided herein, the terms
and provisions of the Procedures shall control but only to the extent that the
terms hereof are in direct conflict with the provisions of the Development
Agreement. The Procedures shall constitute a legally binding amendment to the
Development Agreement between the parties, pursuant to Article XV(A) of the
Development Agreement; and Licensor will attempt to reasonably apply these
procedures to the additional development agreement referred to below.

                               General Provisions

         Corporate Structure. Four Star Restaurant Group, LLC, a Nebraska
limited liability company ("Developer") shall be the Developer, property owner
and employer. Michael R. Johnson is Controlling Principal. Four Star Restaurant
Group, LLC and Michael R. Johnson are also guarantors under the Operating
Agreement. The Operating Principal must be approved in writing by Licensor six
months prior to the signing of the Operating Agreement for Developer's first
Restaurant or upon commencement of construction of the first Restaurant,
whichever occurs first.

                                Article I - Grant

         D. This section is deleted and the following is substituting in lieu
thereof:

                  "The Territory includes defined areas within the states of
         Iowa, Nebraska, South Dakota and Kansas. The development schedule calls
         for the development of 10 restaurants over a 7 year period. Provided
         successful completion of the development schedule, Developer shall be
         granted the right to sign Licensor's then current form of development
         agreement providing for further development of the Territory upon
         completion of the development schedule under the initial Development
         Agreement. Fifteen (15) months prior to the scheduled completion,
         Licensor shall provide Developer with notice of a good faith estimated
         development schedule or sooner if it appears that Developer will open
         the first 10 restaurants in less than 7 years. (determined as the date
         of such notice) for the Territory, which shall include the number of
         Restaurants and a reasonable timetable for their development during the
         additional term. It is the intent of the parties that such additional
         development schedule shall be sufficient to fully build out the
         Territory provided however, that nothing contained herein or in the
         additional development agreement shall preclude the subsequent
         development of additional O'Charley's Restaurants in the Territory if
         Licensor shall subsequently determine that the Territory will not be
         fully developed as of the end of the term of the additional development
         agreement, nor shall Licensor be obligated to grant Developer the right
         to build any additional restaurant subsequent

                                                                               1
<PAGE>

         to the expiration of the term of the additional development agreement.
         The right to develop additional Restaurants within the Territory during
         the term of the additional development agreement shall be exclusive.
         Developer shall have 60 days to execute the additional development
         agreement regarding additional development of the Territory. In the
         event the Developer chooses not to develop additional restaurants in
         the Territory and/or Licensor and Developer cannot agree on the number
         of additional restaurants to be developed in the Territory, the
         Development Agreement will expire. After the Development Agreement
         expires or is terminated, Licensor shall have the complete and
         unrestricted right to operate or license other persons to operate one
         or more restaurants utilizing the System in the Territory (except at
         Locations for which Developer has a then outstanding and effective
         Operating Agreement."

                                Article II - Fees

D.       The phrase, ", or (2) the maximum rate allowed by applicable law" is
         deleted.

                                  Article III -
              Schedule and Manner for Exercising Development Rights

B.(1)    The following language is inserted after the chart setting forth the
         Development Schedule,

                  "Ten (10) Restaurants shall be developed over a 6-year period.
                  At least six (6) Restaurants shall be developed in the Lincoln
                  & Hastings-Kearney, Omaha and Des Moines-Ames DMAs with
                  remaining Restaurant locations to be determined by the parties
                  in the manner provided herein.

                  Developer shall be entitled to one ninety (90) day extension
                  for each of the first two Restaurants (i.e., for a total of
                  two (2)) opened hereunder without payment of any additional
                  consideration; provided, however, Developer shall not be
                  entitled to use any extension granted under Section III.B(3)
                  of the Agreement for the first two Restaurants, with the
                  exception of an extension that is required due to a
                  Governmental Delay as provided in Section III.B(3). Any and
                  all extensions shall not allow for a Restaurant to open during
                  the period from mid-November through mid-January. Any such
                  extensions shall not extend the completion date of any
                  subsequent Restaurant. Developer must provide O'Charley's with
                  at least thirty (30) days notice prior to the end of the
                  Development Period for the applicable Restaurant in order to
                  exercise such 90-day extensions."

B.(1)(b)  The phrase, "(which consent may be withheld in Licensor's sole
          discretion)", appearing in the first sentence, is hereby amended to
          read "(which consent may be withheld in Licensor's sole, but
          reasonable discretion)".

                                                                               2
<PAGE>

B.(2)    This section is deleted and the following is substituting in lieu
         thereof:

         "If during the term of the Development Agreement, Developer ceases to
         operate any Restaurant developed under the Development Agreement for
         any reason, including, but not limited to, (i) for a purpose that has
         been expressly approved in writing by Licensor; (ii) due to government
         order; or (iii) due to fire, flood, other casualty, or other
         catastrophic forces beyond Developer's control; provided (1) such event
         was not caused by Licensor's intentional and/or negligent acts, (2)
         that Developer applies within thirty (30) days before such event, if
         reasonably known, or within thirty (30) days after such event, for
         Licensor's approval to relocate or reconstruct the Restaurant(which
         approval is in Licensor's sole, but reasonable discretion) within the
         Territory , and (3) Developer thereafter diligently pursues such
         reconstruction or relocation, and (4) any such approval may be
         conditioned upon the payment of an agreed minimum royalty to Licensor
         during the period the Restaurant is not in operation.

         If during the term of the Development Agreement, Developer, in
         accordance with the terms of any Operating Agreement for a Restaurant
         developed under the Development Agreement, transfers its interest in
         such Restaurant, the transferred Restaurant shall continue to be
         counted in determining whether Developer has complied with the
         Development Schedule so long as it continues to be operated as an
         O'Charley's restaurant. If the transferred restaurant ceases to be
         operated as an O'Charley's restaurant during the term of this
         Development Agreement, Developer shall develop a replacement Restaurant
         within the Territory and within a reasonable time to be agreed upon by
         the parties before, if reasonably known, the transferred Restaurant
         ceases to be operated as an O'Charley's restaurant.

         To fulfill Developer's obligation to have open and in operation the
         required number of Restaurants upon the expiration of each Development
         Period, Developer must develop a replacement Restaurant. In either of
         the two cases as outlined in the first and second paragraph of Section
         III B.(2) of the Development Agreement, the reasonable time period
         shall apply to the development of the replacement Restaurant only and,
         in Licensor's sole, but reasonable discretion, extend the term of the
         applicable Development Period to the end of a mutually agreed upon time
         period; provided, however, such agreed time period shall not extend
         past the end of the subsequent Development Period after which the
         Restaurant closed, and; provided, such agreed time period shall not
         extend the term of the Development Agreement."

B.(3)(a) The phrase, "in its sole discretion," is hereby amended to read "in its
         sole, but not unreasonable discretion"

B.(3)(b) This section is amended by inserting a new sentence before the current
         last sentence, "Notwithstanding anything to the contrary contained
         herein, in the event Developer fails to open a Restaurant within the
         time periods set forth in this Agreement and that delay is due to any
         action or inaction by any federal, state, county or municipal agency or
         authority or other governmental entity (e.g., failure to issue a
         required license, permit or other governmental approval), which action
         or inaction was not caused by Developer's intentional and/or negligent

                                                                               3
<PAGE>

         acts and occurs within the thirty (30) day period prior to the
         scheduled opening of the Restaurant (hereinafter a "Governmental
         Delay"), Developer shall be entitled to one additional extension per
         Restaurant without charge and which extension will not be counted as an
         "Extension Period" for purposes of calculating the amount of extension
         fees in respect of future extensions. Developer must notify O'Charley's
         as soon as possible after Developer becomes aware of Governmental
         Delay, which notice must contain the following information: (1) the
         name of the governmental entity that is causing delay; (2) the reason
         for the delay; and (3) how and when the delay will be remedied. Any
         extension required for a Governmental Delay shall be in effect until
         the earlier of the date the delay is cured or for a period of sixty
         (60) days. No extension of any Development Period will affect the
         duration of any Development Period for any other Restaurant or any of
         Developer's other development obligations hereunder."

C.       The phrase, "six (6)", appearing in the last sentence, is hereby
         amended to read "three (3)".

D.(2)(a) The phrase, "in its sole discretion," is hereby amended to read "in its
         sole, but not unreasonable discretion"

                        Article VI - Duties of Developer

A.(3)    This section is amended by inserting three (3) new sentences before the
         current second sentence, "Accordingly, Developer and Controlling
         Principal and/or others working on its behalf, will not, during the
         term of the Development Agreement, actively solicit or caused to be
         solicited ("No Solicitation Rule") any employee or any individual who
         is at the time or was within the preceding three (3) months employed in
         a restaurant managerial position, a multi-restaurant supervisory
         position or home office staff position (e.g., officer or director level
         personnel, management information systems personnel or human resources
         and training personnel), by Licensor or any of its Affiliates,
         including, but not limited to, individuals employed by Licensor to work
         in its O'Charley's restaurants, or at Licensor's home office, or
         employed in a restaurant managerial position by any other developer or
         operator operating under the System (a "Covered Individual"). In the
         event, Developer and Controlling Principal employ, during the term of
         the Development Agreement, a Covered Individual, Developer and
         Controlling Principal must notify the Licensor immediately after
         discovering such occurrence in writing. This section shall not be
         violated if at the time Developer employs or seeks to employ such
         person, Licensor gives its written consent."

         The new fourth sentence is amended to read "In the event, Developer and
         Controlling Principal, during the term of the Development Agreement,
         violate the "No-Solicitation Rule," then such former employer of such
         Covered Individual shall be entitled to compensation for the reasonable
         costs and expenses, of whatever nature or kind, incurred by such
         employer in connection with the training of such Covered Individual."

                                                                               4
<PAGE>

                       Article VIII - Transfer of Interest

B.(2)    The phrase, "in its sole discretion," is hereby amended to read "in its
         sole, but not unreasonable discretion"

B.(2)(j) The phrase, "or such greater amount as is necessary, "is hereby amended
         to read "up to a maximum of Fifteen Thousand Dollars ($15,000),".

         IN WITNESS WHEREOF, the parties have executed this Addendum to be duly
executed as of the day and year first written on the Development Agreement Four
Star Restaurant Group, LLC.

                                   LICENSOR:

                                   O'Charley's Inc.

                                   By: /s/ Edward C. Hastings
                                       -------------------------------------
                                        Edward C. Hastings
                                   Title: Vice President of Franchising

                                   DEVELOPER:

                                   Four Star Restaurant Group, LLC

                                   By: /s/  Michael R. Johnson
                                       -------------------------------------
                                        Michael R. Johnson
                                   Title: President and Chief Operating Officer

                                   CONTROLLING PRINCIPAL:

                                   By: /s/  Michael R. Johnson
                                       -------------------------------------
                                        Michael R. Johnson

                                                                               5Form of Warrant

 

EXHIBIT 4.1

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH ACT AND THE RULES AND REGULATIONS
THEREUNDER.

Dated: as of ____________, 2005

WARRANT CERTIFICATE REPRESENTING

WARRANTS TO PURCHASE COMMON STOCK OF

SINO SILVER CORP.

     FOR VALUE RECEIVED, Sino Silver Corp., a corporation organized and existing under the laws of
the State of Nevada (the “Company”), hereby certifies that,
__________________ (“Holder”),
the holder of these Warrants (the “Warrants”, and each right to purchase a share of common stock of
the Company, par value $.001 per share (the “Common Stock”), a “Warrant”) is entitled, subject to
the terms set forth below, at any time on or after the date of issuance of this Warrant (the
“Commencement Date”), or from time to time thereafter, to purchase from the Company at such
Holder’s option __________________ of fully paid and nonassessable shares of Common Stock. This Warrant
is being issued pursuant to that certain Subscription Agreement between Holder and the Company,
dated __________________, 2005 (the “Subscription Agreement”).

     These Warrants shall be subject to the following terms and conditions:

	 
	SECTION 1.     EXERCISE OF WARRANTS; EXERCISE PRICE; ADJUSTMENTS RELATIVE TO EXERCISE OF WARRANTS

     1A.     Exercise of Warrants. Subject to the conditions of this Section 1, the holder of
the Warrant at the holder’s option may exercise such holder’s rights under all or any part of the
Warrants to purchase one share of Common Stock (the “Warrant Shares”) for each Warrant at a price
equal to (i) $2.00 per share at any time on or after the Commencement Date and prior to
__________________, 2006, and (ii) $2.50 per share at any time on or after __________________, 2006 and
prior to __________________, 2008 (each, the “Exercise Price”).

     1B.     Liquidating Dividends; Purchase Rights.

     (a)     In case at any time after the date hereof the Company shall declare a dividend upon the
shares of Common Stock of any class payable otherwise than in shares of Common Stock or securities
convertible into Common Stock (“Convertible Securities”), otherwise than out of consolidated
earnings or consolidated earned surplus (determined in accordance with United States generally
accepted accounting principles, including the making of appropriate deductions for minority
interests, if any, in subsidiaries), and otherwise than in the securities to which the provisions
of clause (b) below apply, and provided that such dividend shall not otherwise result in an
adjustment of the number of shares of Common Stock purchasable upon exercise of each Warrant
pursuant to any other provision hereof, the Company

 

 

shall pay over to each holder of Warrants, upon exercise thereof on or after the dividend
payment date, the securities and other property (including cash) which such holder would have
received (together with all distributions thereon) if such holder had exercised the Warrants held
by it on the record date fixed in connection with such dividend, and the Company shall take
whatever steps are necessary or appropriate to keep in reserve at all times such securities and
other property as shall be required to fulfill its obligations hereunder in respect of the shares
issuable upon the exercise of all the Warrants.

     (b)     If at any time or from time to time on or after the date hereof the Company shall grant,
issue or sell any options or rights (other than Convertible Securities) to purchase stock,
warrants, securities or other property pro rata to the holders of Common Stock of all classes
(“Purchase Rights”), each holder of Warrants shall be entitled to acquire (whether or not such
holder’s Warrants shall have been converted), upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such holder could have acquired if such holder had held the
number of shares of Common Stock issuable upon exercise of such Warrants, immediately prior to the
time or times at which the Company granted, issued or sold such Purchase Rights.

     1C.     Subdivision or Combination of Stock. In case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of shares, the number of
shares of Common Stock purchasable upon exercise of each Warrant immediately prior to such
subdivision shall be proportionately increased, and conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares, the number of shares
of Common Stock purchasable upon exercise of each Warrant immediately prior to such combination
shall be proportionately decreased.

     1D.     Changes in Common Stock. If any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with another corporation or
other entity, or sale, transfer or other disposition of all or substantially all of its properties
to another corporation or other entity, shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby each holder of Warrants shall thereafter have
the right to purchase and receive upon the basis and upon the terms and conditions herein specified
and in lieu of the shares of the Common Stock of the Company immediately theretofore issuable upon
exercise of the Warrants, such shares of stock, securities or properties, if any, as may be
issuable or payable with respect to or in exchange for a number of outstanding shares of such
Common Stock equal to the number of shares of such Common Stock immediately theretofore issuable
upon exercise of the Warrants had such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of each holder of Warrants to the end that
the provisions hereof (including without limitation provisions for adjustment of the number of
shares of Common Stock purchasable upon exercise of each Warrant) shall thereafter be applicable,
as nearly equivalent as may be practicable in relation to any shares of stock, securities or
properties thereafter deliverable upon the exercise thereof. The Company shall not effect any such
consolidation, merger, sale, transfer or other disposition, unless prior to or simultaneously with
the consummation thereof the successor corporation (if other than the Company) resulting from such
consolidation or merger or the

2

 

corporation purchasing or otherwise acquiring such properties shall assume, by written
instrument executed and mailed or delivered to the holders of the Warrants at the last address of
such holders appearing on the books of the Company, the obligation to deliver to such holders such
shares of stock, securities or properties as, in accordance with the foregoing provisions, such
holders may be entitled to acquire. The above provisions of this subparagraph shall similarly
apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers,
or other dispositions.

     1E.     Notice of Adjustment. Upon any adjustment of the number of shares of Common Stock
or other stock or property purchasable upon the exercise of each Warrant as provided herein, then
and in each such case the Company shall within ten days following such adjustment deliver to each
holder of Warrants a certificate of the Chief Financial Officer of the Company setting forth the
number of shares of Common Stock or other stock or property purchasable upon exercise of each
Warrant resulting from such adjustment, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Each holder of Warrants shall have
the right, during the succeeding five (5) Business Days, to dispute the results set forth in such
certificate by notifying the Company of the nature of such dispute in writing in reasonable detail,
including the amount and nature of any difference from the result determined by the Company. If no
holder delivers such written notice of its objections within such five Business Day period, the
determination set forth in the certificate of the Chief Financial Officer shall be deemed to have
been accepted by the holders of the Warrants. The Company and such holder shall attempt to resolve
any such objections within ten (10) Business Days following the receipt by the Company of such
holder’s objections. If the Company and such holder are unable to resolve such dispute, the
Company shall promptly obtain the opinion of a firm of independent certified public accountants
(which may be the regular auditors of the Company) of recognized national standing selected by the
Company’s Board of Directors, which opinion shall state the number of shares of Common Stock or
other stock or property purchasable upon exercise of each Warrant resulting from such adjustment,
setting forth in reasonable detail the method of calculation and the facts upon which such
calculation is based. The Company shall promptly mail a copy of such accountants’ opinion to the
holder of Warrants.

     1F.     Certain Events. If any event occurs as to which in the opinion of the Board of
Directors of the Company the other provisions of Section 1 hereof are not strictly applicable or if
strictly applicable would not fairly protect the conversion rights of the holders of the Warrants
in accordance with the essential intent and principles of such provisions, then such Board of
Directors shall appoint a firm of independent certified public accountants (which may be the
regular auditors of the Company) of recognized national standing, which shall give their opinion
upon the adjustment, if any, on a basis consistent with such essential intent and principles,
necessary to preserve, without dilution, the rights of the holders of the Warrants. Upon receipt
of such opinion by the Board of Directors, the Company shall forthwith make the adjustments
described therein; provided, however, that no such adjustment pursuant to this
Section 1G shall have the effect of decreasing the number of shares of Common Stock purchasable
upon the exercise of each Warrant as otherwise determined pursuant to Section 1 hereof except in
the event of a combination of shares of the type contemplated in Section 1D and then in no event to
a number of shares of Common Stock lesser than as adjusted pursuant to Section 1D.

3

 

     1G.     Prohibition of Certain Actions. The Company will not take any action which would
result in any adjustment to the number of shares of Common Stock purchasable upon exercise of any
Warrant if the total number of shares of Common Stock issuable after such action upon exercise of
all of the Warrants would exceed the total number of shares of Common Stock then authorized by the
Company’s Articles of Incorporation.

     1H.     Stock to be Reserved. The Company will at all times reserve and keep available
out of its authorized Common Stock, solely for the purpose of issue upon the exercise of Warrants
as herein provided, such number of shares of Common Stock as shall then be issuable upon the
exercise of all outstanding Warrants, and the Company will maintain at all times all other rights
and privileges sufficient to enable it to fulfill all its obligations hereunder. The Company
covenants that all shares of Common Stock which shall be so issuable shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, free from preemptive or similar rights on
the part of the holders of any shares of capital stock or securities of the Company, and free from
all liens and charges with respect to the issue thereof. The Company will take all such action as
may be necessary to assure that such shares of Common Stock may be so issued without violation by
the Company of any applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Common Stock may be listed.

     1I.     Issue Tax. The issuance of certificates for shares of Common Stock upon exercise
of Warrants shall be made without charge to the holders of the Warrants exercised for any issuance
tax in respect thereof.

     1J.     Closing of Books. The Company will at no time close its transfer books against
the transfer of any Warrant or of any shares of Common Stock issued or issuable upon the exercise
of any Warrant in any manner which interferes with the timely exercise of such Warrant.

     1K.     No Rights or Liabilities as Shareholders. No Warrant shall entitle any holder
thereof to any of the rights of a shareholder of the Company. No provision of this Warrant, in the
absence of the actual exercise of such Warrant or any part thereof by the holder thereof into
Common Stock issuable upon such exercise, shall give rise to any liability on the part of such
holder as a shareholder of the Company, whether such liability shall be asserted by the Company or
by creditors of the Company.

     1L.     Fractional Shares. The Company shall not be required to issue a fractional share
of Common Stock upon exercise of this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such fraction in an amount equal to the same fraction of the Market Price per share of
Common Stock on the date of exercise.

     1M.     Definition of Market Price. The “Market Price” as of any date, (i) means the
average of the last reported sale prices for the shares of Common Stock on the Over-the-Counter
Bulletin Board (the “OTC”) for the five (5) trading days immediately preceding such date as
reported by Bloomberg Financial Markets or an equivalent reliable reporting service mutually
acceptable to and hereafter designated by the holder of this Warrant and the Company (“Bloomberg”),
or (ii) if the OTC is not the principal trading market for the shares of Common

4

 

Stock, the average of the last reported sale prices on the principal trading market for the
Common Stock during the same period as reported by Bloomberg, or (iii) if market value cannot be
calculated as of such date on any of the foregoing bases, the Market Price shall be the fair market
value as reasonably determined in good faith by (a) the Board of Directors of the Company or, at
the option of a majority-in-interest of the holders of the outstanding Warrants by (b) an
independent investment bank of nationally recognized standing in the valuation of businesses
similar to the business of the Company. The manner of determining the Market Price of the Common
Stock set forth in the foregoing definition shall apply with respect to any other security in
respect of which a determination as to market value must be made hereunder.

     1N.     Notice of Corporate Action. If at any time

     (a)     the Company shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or other distribution, or any right to subscribe for or
purchase any evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or

     (b)     there shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or merger of the Company
with, or any sale, transfer or other disposition of all or substantially all the property, assets
or business of the Company to, another corporation, or

     (c)     there shall be a voluntary or involuntary dissolution, liquidation or winding up of the
Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at least 20 days’
prior written notice of the date on which a record date shall be selected for such dividend,
distribution or right or for determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or
winding up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days’ prior written notice of the date when the same shall take place. Such notice in accordance
with the foregoing clause also shall specify (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, the date on which the holders of Common
Stock shall be entitled to any such dividend, distribution or right, and the amount and character
thereof, and (ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other property deliverable upon
such reorganization, reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation and winding up. Each such written notice shall be sufficiently given if
addressed to Holder at the last address of Holder appearing on the books of the Company.

SECTION 2.     METHOD OF EXERCISE OF WARRANTS

     The Warrants may be exercised by the surrender of this Certificate, with the Form of
Subscription attached hereto duly executed by the holder, to the Company at its principal office,

5

 

accompanied by payment of the Exercise Price(s) for the number of shares of Common Stock
specified. The Warrants may be exercised for less than the full number of shares of Common Stock
called for hereby by surrender of this Certificate in the manner and at the place provided above,
accompanied by payment for the number of shares of Common Stock being purchased. If the Warrants
should be exercised in part only, the Company shall, upon surrender of this Warrant Certificate for
cancellation, execute and deliver a new Warrant Certificate evidencing the right of the holder to
purchase the balance of the shares purchasable hereunder. Upon receipt by the Company of this
Warrant Certificate at the office of the Company, in proper form for exercise, accompanied by the
full Exercise Price(s) in cash or certified or bank cashier’s check, the holder shall be deemed to
be the holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding
that the stock transfer books of the Company shall then be closed or that certificates representing
such Common Stock shall not then be actually delivered to the holder.

     As soon as practicable after the exercise of these Warrants in whole or in part and, in any
event, within ten days thereafter, the Company at its expense will cause to be issued in the name
of and delivered to the holder a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock (and any unexercised Warrants) to which the holder shall be
entitled upon such exercise. Each certificate for shares of Common Stock so delivered shall be in
such denominations as may be requested by the holder and shall be registered in the name of the
holder or such other name as the holder may designate.

SECTION 3.     MUTILATED OR MISSING WARRANT CERTIFICATES

     Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant Certificate, and (in the case of loss, theft or
destruction) of indemnification reasonably satisfactory to the Company and upon surrender and
cancellation of this Warrant Certificate, if mutilated, the Company will execute and deliver a new
Warrant Certificate of like tenor and date.

SECTION
4.     MISCELLANEOUS

     4A.     Remedies. Each holder of Warrants and Warrant Shares, in addition to being
entitled to exercise all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

     4B.     Successors and Assigns. This Warrant and the rights evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and the successors and assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of all holders from
time to time of this Warrant and shall be enforceable by any such holder or holder of Warrant
Shares.

     4C.     Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.

6

 

     4D.     Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Warrant.

     4E.     Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.

     4F.     Governing Law. This Warrant shall be governed by the laws of the State of Nevada,
without regard to the provisions thereof to conflict of laws.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

7

 

     IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed, as of
the day and year first above written.

	 	 	 	 	 
	 	SINO SILVER CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

8

 

	 	 	 	 	 

FORM OF SUBSCRIPTION

DATE:_________________ 20__

[To be executed only upon the exercise of the Warrant]

TO: SINO SILVER CORP.

     The Undersigned, the holder of the within Warrants, hereby irrevocably elects to exercise all
or part of the purchase right represented by such Warrants for, and to purchase thereunder,
__________________
shares of Common Stock of Sino Silver Corp. (the “Company”) and herewith makes payment
of
$______ to the Company, evidenced by delivery of __________________, and requests that the
certificate of such shares be issued in the name of, and be delivered to __________________, whose address
is __________________.

	 	 	 	 	 
	 	______________________________________

(Name of Holder)

 	 
	 

	 	 	 	 	 
	 	______________________________________

(Authorized Signatory)

 	 

	 	 	 	 	 
	 	______________________________________

(Address)s

 	 
	 	 	 
	 	 	 
	 	 	 
	 

9

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