Document:

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                                                                    EXHIBIT 10.6

                             [O'CHARLEY'S INC. LOGO]

                                O'CHARLEY'S INC.

                              DEVELOPMENT AGREEMENT

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                                TABLE OF CONTENTS

<TABLE>
<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>

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 Principals..........   D-1
Attachment E     Guaranty.................................................   E-1

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                                O'CHARLEY'S INC.

                              DEVELOPMENT AGREEMENT

      THIS DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into
this 20th day of August 2004, by and among O'Charley's Inc., a Tennessee
corporation ("Licensor"), JFC Enterprises, LLC, a Delaware limited liability
company ("Developer"), Kurt Strang, an individual residing at 109 Grand Cypress
Creek Drive, Broussard, Louisiana 70518 (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 Principals 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 Principals 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 Principals understand and acknowledge that
the rights and duties set forth in this Agreement are personal to Developer and
its Controlling Principals (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 Principals.
Developer and Controlling Principals 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 Principals 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 Principals satisfy Licensor's
then-current financial criteria for developers and controlling principals 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 Principals 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

                                       12
<PAGE>

this Agreement or by any Operating Agreement between Developer and Licensor and
has taken 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 Principals
(as applicable) shall have transferred a Controlling Interest in Developer; and

                  (b)   Developer and Controlling Principals 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 Principals:

                  (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 Principals 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)).

                                       13
<PAGE>

      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 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 Principals, 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-

                                       14
<PAGE>

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 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'

                                       15
<PAGE>

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 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 Principals or otherwise appropriately disclosed in
the notes thereto.

                  (j)   Each of the Principals, except Controlling Principals,
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 Principals 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 Principals 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 Principals, 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

                                       16
<PAGE>

this Agreement; provided, further, Operating Principal shall remain fully
responsible for any such performance.

                  (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
Principals, bound by all obligations of Developer, Operating Principal and
Controlling Principals 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 Principals 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 Principals 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

                                       17
<PAGE>

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

      B.    Developer and Controlling Principals 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

                                       18
<PAGE>

      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:

            (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);

                                       19
<PAGE>

            (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;

            (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

                                       20
<PAGE>

            (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 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

                                       21
<PAGE>

                  (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.

            (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 Principals 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 Principals described in this Agreement is a material
and essential obligation of Developer, that non-performance of such obligations
will adversely and substantially affect

                                       22
<PAGE>

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) 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 Principals 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 Principals 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 Principals 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 Principals 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

                                       23
<PAGE>

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 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 principals, 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 principals, 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,

                                       24
<PAGE>

members, partners or other investors, as applicable, shall also execute such
agreements as transferee's principals, and guarantee the performance of all such
obligations, covenants and agreements.

                  (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

                                       25
<PAGE>

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.
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

                                       26
<PAGE>

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
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,

                                       27
<PAGE>

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 Developer's offering materials to contain a written statement
prescribed by Licensor concerning the limitations described in the preceding
sentence. Developer, its Principals 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 Principals, 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
Principals, 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 Principals (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
Principals (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

                                       28
<PAGE>

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) 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 Principals 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 Principals 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 Principals 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.

                                       29
<PAGE>

      C.    Developer and Controlling Principals specifically acknowledge that,
pursuant to this Agreement, Developer and Controlling Principals will receive
valuable training, trade secrets and confidential information which are beyond
the present skills and experience of Developer and Controlling Principals and
Developer's managers and employees and that Developer has the right and the
obligation, arising from this Agreement, to develop the Territory for the
benefit of the System. Developer and Controlling Principals 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 Principals 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;

                                       30
<PAGE>

            (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

            (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 Principals 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 Principals 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 Principals 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 Principals 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
Principals agree to pay all costs and expenses (including reasonable attorneys'
fees) incurred by Licensor in connection with the enforcement of this Section.

                                       31
<PAGE>

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

      J.    Developer and Controlling Principals 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
Principals 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 Principals 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,

                                       32
<PAGE>

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 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 Principals 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 Principals, 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.

                                       33
<PAGE>

      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 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: Director of Franchising
                              Facsimile: (615) 782-5043

Notices to Developer and      JFC Enterprises, LLC
the Controlling Principal:    3038 Sidco Drive
                              Nashville, Tennessee 37204
                              Attention: Kurt Strang
                              Facsimile: (615) 782-5043

                                   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

                                       34
<PAGE>

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.

      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 Principals 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
Principals.

      E.    The term "Principals" 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 Principals 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

                                       35
<PAGE>

      A.    This Agreement, the documents referred to herein and the Attachments
hereto, constitute the entire, full and complete agreement between Licensor,
Developer and Controlling Principals concerning the subject matter hereof and
shall supersede all prior related agreements between Licensor, Developer and
Controlling Principals. 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.

      B.    Developer and Controlling Principals 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 Principals 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 Principals 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 Principals 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 Principals 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 Principals 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 Principals 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

                                       36
<PAGE>

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 Principals 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
Principals 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 such dispute
resolution program, or if such claim, controversy or dispute relates to another
developer or operator, Developer and Controlling Principals 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 Principals 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 Principals 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 Principals 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 Principals that
contemplates performance of such obligation after termination or expiration of
this Agreement or the transfer of any interest of Developer or Controlling
Principals therein, shall be deemed to survive such termination, expiration or
transfer, including the provisions of this Article XV.

      I.    Developer, Controlling Principals 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

                                       37
<PAGE>

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.

                                   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
                                        Director of Franchising

                                    DEVELOPER:

                                    JFC ENTERPRISES, LLC

                                    By: /s/ Kurt Strang
                                        ----------------------------------------
                                        Kurt Strang
                                        President

                                    CONTROLLING PRINCIPAL:

                                    KURT STRANG

                                    By: /s/ Kurt Strang
                                        ----------------------------------------
                                        Kurt Strang

* Denotes individual who is Developer's Operating Principal

                                       39
<PAGE>

                                   SCHEDULE 1
                            TO DEVELOPMENT AGREEMENT

1.    TERRITORY: Within the State of Louisiana:

      ALEXANDRIA DMA consisting of the Parishes of Vernon, Grant, Rapides,
      Avoyelles; LAKE CHARLES DMA consisting of the Parishes of Beauregard,
      Allen, Calcasieu, Cameron; LAFAYETTE DMA consisting of the Parishes of
      Evangeline, Acadia, Vermilion, Jefferson Davis, St. Kandry, Lafayette, St.
      Martin, Iberia; BATON ROUGE DMA consisting of the Parishes of Wilkinson,
      Amite, West Feliciana, East Feliciana, St. Helena, Pointe Coupee, West
      Baton Rouge, East Baton Rouge, Livingston, Iberville, Ascension,
      Assumption, St. Mary; NEW ORLEANS DMA consisting of the Parishes of
      Tangipahoa, Washington, Pearl River, St. Tammany, Hancock, St. James St.
      John the Baptist, St. Charles, Jefferson, Orleans, St. Bernard,
      Plaquemines, Lafourche, Terrebonna.

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                           November 2004                                  1
        Two                             June 2005                                    2
       Three                          February 2006                                  3
       Four                           November 2006                                  4
       Five                              May 2007                                    5
        Six                           November 2007                                  6
       Seven                             May 2008                                    7
       Eight                          November 2009                                  8
       Nine                              May 2010                                    9
        Ten                           November 2011                                 10
</TABLE>

* includes existing Restaurants, if any, purchased or acquired by Developer from
Licensor.

3.    PROJECTED OPENING DATES:

<TABLE>
<CAPTION>
RESTAURANT                        PROJECTED OPENING DATE
----------                        ----------------------
<S>                               <C>
    One                                November 2004
    Two                                  June 2005
   Three                               February 2006
   Four                                November 2006
   Five                                  May 2007
    Six                                November 2007
   Seven                                 May 2008
   Eight                               November 2009
   Nine                                  May 2010
    Ten                                November 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
_____________ 2004 by and between O'CHARLEY'S INC., a Tennessee corporation
("Licensor"), JFC Enterprises, LLC. ("Operator") and Weingarten Realty Investors
("Landlord").

      WHEREAS, Licensor and Operator are parties to that certain Development
Agreement dated as of August 20, 2004 ("Development Agreement");

      WHEREAS, Operator and Landlord desire to enter into a lease (the "Lease")
pursuant to which Operator will occupy the premises located at 4301 Ambassador
Caffrey Parkway, Lafayette, Louisiana 70508 (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

                                      B-1
<PAGE>

Licensor elects to cure the default, Licensor shall cure the default within
thirty (30) days of such 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: /s/ Edward C. Hastings
                                        ----------------------------------------
                                        Edward C. Hastings
                                        Director of Franchising

                                    OPERATOR:

                                    JFC ENTERPRISES, LLC

                                    By: /s/ Kurt Strang
                                        ----------------------------------------
                                        Kurt Strang
                                        President

                                    LANDLORD:

                                    WEINGARTEN REALTY INVESTORS

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

                                      B-3
<PAGE>

                                  ATTACHMENT C
                            TO DEVELOPMENT AGREEMENT

                    CONFIDENTIALITY AND NON-COMPETE AGREEMENT

      This Agreement is made and entered into this 20th day of August 2004,
between O'Charley's Inc., a Tennessee corporation ("Licensor"), JFC Enterprises,
LLC ("Developer") and Kurt Strang ("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 August 20, 2004
("Development Agreement"), by and among Licensor, Developer and Developer's
Controlling Principals;

                                      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: Director of Franchising
            Facsimile: (615) 782-5043

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

            JFC Enterprises, LLC
            3038 Sidco Drive
            Nashville, TN 37204
            Attention: Kurt Strang
            Facsimile: (615) 782-5043

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

            Kurt Strang
            3038 Sidco Drive
            Nashville, TN 37204
            Attention: Kurt Strang
            Facsimile: (615) 782-5043

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
                                         Director of Franchising

                                     OPERATOR:

                                     JFC ENTERPRISES, LLC

                                     By: /s/ Kurt Strang
                                         ---------------------------------------
                                         Kurt Strang
                                         President

                                     COVENANTOR:

                                     By: /s/ Kurt Strang
                                         ---------------------------------------
                                         Kurt Strang

                                      C-7
<PAGE>

                                  ATTACHMENT D
                            TO DEVELOPMENT AGREEMENT

                 STATEMENT OF OWNERSHIP INTERESTS AND PRINCIPALS

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>
Kurt Strang                                      50% - Member
O'Charley's Inc.                                 50% - Member
</TABLE>

A.    The following is a list of all Principals 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

            Kurt Strang

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

            Name

            Kurt Strang

                                      D-1
<PAGE>

                                  ATTACHMENT E
                            TO DEVELOPMENT AGREEMENT

                                    GUARANTY

      Each of the undersigned acknowledges and agrees as follows:

      (1)   Each has read the terms and conditions of the Development Agreement
(the "Development Agreement") dated as of August 20, 2004 by and among
O'Charley's Inc., a Tennessee corporation, Kurt Strang and each of the
undersigned (the "Controlling Principals") and acknowledges that the execution
of this guaranty and the undertakings of the Controlling Principals 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;

      (2)   Each is included in the term "Controlling Principals" 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
Principals 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 Principals under this guaranty, Licensor may, without notice to the
Controlling Principals, 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
Principals 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 Principals 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 Principals, 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 Principals shall continue in full force and effect.

      Additionally, with respect to the individual designated as the Operating
Principal, the Operating Principal acknowledges that the undertakings by the
Operating Principal under this

                                      E-1
<PAGE>

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/ Kurt Strang
                                              ----------------------------------
                                              Kurt Strang

*Denotes individual who is Developer's Operating Principal

                                       E-2<PAGE>

                                                                    EXHIBIT 10.7

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                              JFC ENTERPRISES, LLC

<PAGE>

                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                              JFC ENTERPRISES, LLC

      THIS LIMITED LIABILITY COMPANY AGREEMENT is made and entered into as of
the 20th day of August, 2004, by and among O'Charley's Inc., a Tennessee
corporation, whose address is 3038 Sidco Drive, Nashville, Tennessee 37204
("O'Charley's"), and Kurt Strang, an individual residing at 109 Grand Cypress
Creek Drive, Broussard, Louisiana 70518 ("JV Partner") (each, together with the
other persons who may become members under the terms of this Agreement, a
"Member" and collectively, the "Members").

                              W I T N E S S E T H:

      WHEREAS, O'Charley's, 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 dressing
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
O'Charley's from time to time;

      WHEREAS, O'Charley's 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
O'Charley's) for use in connection with the System (the "Proprietary Marks");

      WHEREAS, O'Charley's 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 Members hereto desire to enter into this Agreement for the
purpose of (a) forming a limited liability company under and pursuant to the Act
(as defined below), to conduct business as an owner and operator of O'Charley's
restaurants as a limited liability company, and to set forth the mutual rights
and obligations of the Members in this Agreement; (b) owning and operating one
or more O'Charley's restaurants utilizing the System; and (c) obtaining a
franchise from O'Charley's for that purpose; and

      WHEREAS, O'Charley's, as franchisor, and the LLC, as franchisee, will
contemporaneously herewith enter into a Development Agreement.

<PAGE>

      NOW, THEREFORE, in consideration of the mutual promises, covenants, and
undertakings hereinafter contained, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Members hereby
agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

      1.1   DEFINITIONS. As used herein the following terms have the indicated
meanings:

            1.1.1  "Act" means the Delaware Limited Liability Company Act, being
Title 6, Sections 18-101 to 18-1109 of the Delaware Code Annotated, as amended
from time to time, and any corresponding provisions of any successor
legislation.

            1.1.2  "Affiliate" means any person directly or indirectly
controlling, controlled by, or under common control with such person.

            1.1.3  "Agreement" means this Limited Liability Company Agreement,
as amended from time to time.

            1.1.4  "Assign" means to make an Assignment.

            1.1.5  "Assignment" means any transfer, alienation, sale,
conveyance, assignment, or other disposition of all or any part of an existing
Membership Interest in the LLC, by operation of law or otherwise, including
without limitation any gift, bequest, devise, hypothecation, mortgage, lien,
pledge, encumbrance, or granting of a security interest.

            1.1.6  "Available Cash Flow" means all cash, revenues, and funds
received by the LLC, less the sum of the following to the extent paid or set
aside by the LLC (which shall be paid from the cash, revenues and funds received
by the LLC in the following priority): (a) all trade payables and approved
expenses of the LLC; (b) all principal and interest payments due on senior
indebtedness and capitalized leases, including all principal and interest
payments due on indebtedness of the LLC owed to GE Capital; (c) all interest due
under the Revolving Loan Agreement; and (d) such approved capital expenditures
and reserves as the Board deems reasonably necessary for the proper operation of
the LLC's business.

            1.1.7  "Board" means the Board of Managers of the LLC established
pursuant to Article VII.

            1.1.8  "Board Member" has the meaning given to such term in Section
7.3 hereof.

            1.1.9  "Capital Account" in respect of any Member means the account
established for that Member pursuant to Section 5.1 hereof, and as may be
adjusted from time to time in accordance with this Agreement.

            1.1.10 "Capital Contribution" shall mean any contribution to the
capital of the LLC in cash or property by a Member whenever made.

                                       2
<PAGE>

            1.1.11 "Certificate of Formation" means the Certificate of Formation
of the LLC filed in the Office of the Secretary of State of the State of
Delaware, as amended from time to time.

            1.1.12 "Closing" has the meaning given to such term in Section 11.7
hereof.

            1.1.13 "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any corresponding provisions of any successor
legislation.

            1.1.14 "Development Agreement" means that certain Development
Agreement, of even date herewith, between the LLC, the JV Partner and
O'Charley's.

            1.1.15 "Dissolution Event" has the meaning given to such term in
Section 12.2 hereof.

            1.1.16 "Escrow Agreement" means that certain Escrow Agreement, of
even date herewith, by and among the JV Partner, O'Charley's and the LLC.

            1.1.17 "Entity" means any corporation, partnership, trust, limited
liability company, or other entity.

            1.1.18 "Financial Rights" means a Member's rights as a member of the
LLC (a) to share in Net Income and Net Loss to the extent provided in this
Agreement, and (b) to share in distributions to the extent provided in this
Agreement.

            1.1.19 "Franchise Agreement(s)" means any or all of those certain
Operating Agreements between the LLC, the JV Partner and O'Charley's relating to
restaurants to be developed pursuant to the Development Agreement.

            1.1.20 "Governance Rights" means all of a Member's rights as a
member of the LLC other than Financial Rights.

            1.1.21 "Gross Sales" has the meaning set forth in the Franchise
Agreement.

            1.1.22 "JV Partner" means Kurt Strang, an individual residing at 109
Grand Cypress Creek Drive, Broussard, Louisiana 70518.

            1.1.23 "LLC" means JFC Enterprises, LLC, a Delaware limited
liability company.

            1.1.24 "Loan Program" means the financing program provided by GE
Capital Franchise Finance Corporation under that certain Program Agreement to be
entered into with O'Charley's and the LLC or any successor senior indebtedness.

            1.1.25 "Majority in Interest" and "majority in interest of the
remaining Members" each mean Members (other than any Members excluded from the
applicable vote, consent or other action by the terms of this Agreement or the
Act) holding an interest in over 50% of the capital and profits of the LLC.

                                       3
<PAGE>

            1.1.26 "Majority of the Membership Interests" and "majority of the
voting power" each mean over 50% of the Membership Percentages (exclusive of any
Membership Percentages excluded from the applicable vote, consent or other
action by the terms of this Agreement or the Act).

            1.1.27 "Members" means the persons who are, from time to time,
admitted as members of the LLC pursuant to the Act and this Agreement and whose
names are set forth on Exhibit A which is attached hereto and made part of this
Agreement, as such Exhibit A may be amended from time to time.

            1.1.28 "Membership Interest" means a Member's interest in the LLC,
which when expressed as a percentage of all Membership Interests in the LLC
shall be equal to such Member's Membership Percentage.

            1.1.29 "Membership Percentage" means the percentage interest of a
Member as shown on Exhibit A, as amended from time to time as provided in
Section 4.6 hereof or as otherwise required by this Agreement, the Act, or the
Code.

            1.1.30 "Net Income" and "Net Loss," for each fiscal year or other
period, means an amount equal to the LLC's taxable income or loss (including but
not limited to any gain or loss to the LLC from any sale or disposition of all
or any portion of the assets of the LLC) for such year or period, determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:

                   (i)   Expenditures described in Section 705(a)(2)(B) of the
Code shall be included as an expense in the determination of Net Income and Net
Loss; and

                   (ii)  Income exempt from taxation shall be included in the
determination of Net Income and Net Loss.

            1.1.31 "New Member" means any person other than the JV Partner and
O'Charley's.

            1.1.32 "O'Charley's" means O'Charley's Inc., a Tennessee
corporation.

            1.1.33 "Restaurant(s) " has the meaning set forth in Section 3.1
hereof.

            1.1.34 "Revolving Loan Agreement" means the Revolving Loan Agreement
between the LLC and O'Charley's pursuant to which O'Charley's will make
available to the LLC, subject to the terms of the Revolving Loan Agreement, a
revolving line of credit in the maximum principal amount of $750,000.

            1.1.35 "Successor" means a person's executor, administrator,
guardian, conservator, other legal representative, or successor or assign.

                                       4
<PAGE>

            1.1.36 "Tax Amount" means the product of the highest individual
marginal federal income tax rate for the year in question and the LLC's net
taxable income for the year of the determination; provided, however, that the
net taxable income on which the Tax Amount is computed shall be reduced to the
extent of Net Losses previously allocated pursuant to Section 5.2 hereof (but
only where such Net Losses have not previously reduced net taxable income for
purposes of computing the Tax Amount). It is the intent of the Members that the
LLC not be required to distribute a Tax Amount to the extent that the cumulative
Net Losses allocated pursuant to Section 5.2 exceed the cumulative Net Income
allocated pursuant to Section 5.2.

            1.1.37 "TMM" means the person designated by the Board to be the Tax
Matters Member.

            1.1.38 "Treasury Regulations" means proposed, temporary, and final
regulations promulgated under the Code.

            1.1.39 "Year of Termination" means the fiscal year during which the
final distribution of assets is completed.

                                  ARTICLE II.
                                  ORGANIZATION

      2.1   FORMATION. On July 12, 2004, the LLC was formed by the filing of the
Certificate of Formation in the Office of the Secretary of State of the State of
Delaware.

      2.2   ADOPTION OF AGREEMENT. The Members hereto hereby adopt this
Agreement as the limited liability company agreement of the LLC, as the term
"limited liability company agreement" is used in the Act, to set forth the
rules, regulations, and provisions regarding the governance of the LLC, the
conduct of its business, and the rights and privileges of its Members.

      2.3   NAME. The name of the LLC shall be JFC Enterprises, LLC. The LLC may
adopt and conduct its business under such assumed or trade names as may be
determined by the Members from time to time. The LLC shall file any assumed or
fictitious name certificates as may be required to conduct business in any
state.

      2.4   PRINCIPAL PLACE OF BUSINESS. The initial registered agent and
registered office of the LLC shall be The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, New Castle County.
The principal executive office of the LLC shall be located at 3038 Sidco Drive,
Davidson County, Nashville, Tennessee 37204, or such other place as the Members
may from time to time determine.

                                  ARTICLE III.
                               PURPOSE AND POWERS

      3.1   PURPOSE. The exclusive purpose of the LLC shall be to own and
operate those certain casual restaurants know as O'Charley's to be established
by the LLC pursuant to the Development Agreement, (individually, a "Restaurant,"
or collectively, the "Restaurants"), utilizing the System and Proprietary Marks
owned by O'Charley's. Each Restaurant shall be

                                       5
<PAGE>

operated pursuant to a separate Franchise Agreement to be executed between
O'Charley's, as franchisor, and the LLC, as franchisee. The LLC shall not engage
in any other business or activities. The purpose, authority, and scope of the
LLC shall extend no further than the purpose set forth in this Section 3.1. This
Agreement shall not be deemed or construed to create a relationship between the
Members with respect to any activities whatsoever except for those activities
required for the accomplishment of the LLC's purpose as specified in this
Section 3.1. Each Member acknowledges that neither the LLC nor any Member
(except O'Charley's) shall have the right to establish any O'Charley's
restaurants except such Restaurants as the LLC may establish pursuant to
executed Franchise Agreements. Each Member acknowledges and agrees that
O'Charley's is the sole and exclusive owner of the System and the Proprietary
Marks and neither the LLC nor any Member (except O'Charley's) has any right,
title or interest in or to the System or the Proprietary Marks, except as
specifically provided in executed Franchise Agreements. Nothing contained herein
shall be construed as obligating O'Charley's to approve additional restaurants
on behalf of the LLC (except as specifically contemplated by the Development
Agreement), or to grant additional franchises or to execute additional Franchise
Agreements with the LLC. Except as otherwise provided in the Development
Agreement or any Franchise Agreement, nothing contained herein shall be
construed as limiting O'Charley's right to open, or license others to open,
O'Charley's restaurants at any location, and neither the LLC nor any Member
(except O'Charley's) shall have any interest in such restaurants.

      3.2   POWERS. The LLC may exercise all powers that may be legally
exercised by limited liability companies under the Act necessary or convenient
to carry out its business and affairs and to effectuate the purpose described in
Section 3.1 hereof.

                                  ARTICLE IV.
                 CAPITAL CONTRIBUTIONS AND MEMBERSHIP INTERESTS

      4.1   INITIAL CAPITAL CONTRIBUTION. The JV Partner shall be credited with
having made an initial Capital Contribution to the LLC in cash in the amount of
$250,000, which shall be contributed upon the execution hereof.

      4.2   INTEREST ON AND RETURN OF CAPITAL ACCOUNTS. No Member shall be
entitled to any interest from his Capital Account or on his Capital Contribution
and, except as otherwise provided herein, no Member shall have the right to
demand or to receive the return of all or any part of his Capital Account or of
his Capital Contributions.

      4.3   ADDITIONAL CONTRIBUTIONS.

            4.3.1  ESCROW AMOUNT. The JV Partner shall contribute upon the
execution hereof in cash to O'Charley's to hold in escrow pursuant to the terms
of the Escrow Agreement an additional $250,000. Such amount shall be disbursed
from escrow in accordance with the Escrow Agreement as follows:

                   (i)   first, to O'Charley's in the amount of the aggregate
                         unpaid development fees for all Restaurants
                         contemplated to be developed pursuant to the
                         Development Agreement in the event the initial
                         Restaurant is not open on or prior to November 15,
                         2004;

                                       6
<PAGE>

                   (ii)  next, to any operating capital required for the initial
                         Restaurant under Section 4.3.3 hereof;

                   (iii) next, to any capital required to construct and open
                         subsequent Restaurants, if any, under Section 4.3.2
                         hereof; and

                   (iv)  next, to the repayment of amounts outstanding under the
                         Revolving Loan Agreement if a second Restaurant is not
                         opened in accordance with the Development Agreement or
                         upon the election by O'Charley's to exercise the
                         O'Charley's Purchase Option pursuant to Section 11.6
                         hereof.

            4.3.2  PRE-OPENING BUDGET. The amounts required under the
Pre-Opening Budget (as defined in Section 10.6 hereof) for each Restaurant shall
be funded as follows:

                   (i)   first, in the case of the initial Restaurant, from the
                         initial Capital Contribution funded by the JV Partner
                         and, in the case of any subsequent Restaurant, from the
                         Escrow Agreement;

                   (ii)  next, up to $2,500,000 under the Loan Program; and

                   (iii) next, up to $250,000 under the Revolving Loan
                         Agreement.

            4.3.3  OPERATING CAPITAL DEFICIENCIES. In the event of any
deficiency in the amounts required to fund the Operating Budget (as defined in
Section 10.7 hereof) of each Restaurant, such cash flow deficiencies shall be
funded as follows:

                   (i)   first, from amounts available under the Escrow
                         Agreement; and

                   (ii)  next, from the Revolving Loan Agreement.

            4.3.4  ADDITIONAL CAPITAL CONTRIBUTIONS. Except as specifically set
forth herein, no Member shall be required to make any additional Capital
Contribution. Members may make such additional Capital Contributions as may be
approved from time to time by the Board.

      4.4   WITHDRAWAL OR REDUCTION OF MEMBERS' CAPITAL CONTRIBUTIONS. No Member
shall have the right to withdraw from the LLC. A Member shall not receive out of
the LLC's property all or any part of such Member's Capital Contributions except
as provided in Sections 5.7 and 12.3 hereof.

      4.5   MEMBERSHIP INTERESTS AND AMENDMENTS TO EXHIBIT A. Each Member shall
be credited with the Membership Interest (expressed as a percentage of all
Membership Interests) and Capital Contribution set forth opposite such Member's
name on Exhibit A. The amounts shown on Exhibit A with respect to Capital
Contributions and Membership Interests shall from time to time be appropriately
amended to reflect changes to such amounts as a result of any additional Capital
Contributions by Members, any withdrawals or reductions in Capital
Contributions, admission of any New Members to the LLC, or any Assignments of
Membership Interests. Exhibit A shall also be amended from time to time to
reflect any changes in the addresses of Members.

                                       7
<PAGE>

      4.6   LOANS AND GUARANTEES BY O'CHARLEY'S.

            4.6.1  REVOLVING LOAN AGREEMENT. O'Charley's will enter into the
Revolving Loan Agreement with the LLC on the terms and subject to the conditions
set forth in the Revolving Loan Agreement to fund in accordance with Section
4.3.2 the Pre-Opening Budget and in accordance with Section 4.3.3, to fund cash
flow deficiencies under the Operating Budget.

            4.6.2  DISCRETIONARY LOANS. In the event the LLC is in need of
additional funds, O'Charley's may, but shall not be obligated to, make loans to
the LLC. Any such loan shall bear interest at a rate, and shall have repayment
terms, as the Board shall approve.

            4.6.3  LOAN PROGRAM GUARANTY. O'Charley's shall provide a guaranty
of the Loan Program on such terms and conditions as O'Charley's and GE Capital
Franchise Finance Corporation, or its Successor, shall agree from time to time.

                                   ARTICLE V.
               ALLOCATION OF INCOME AND LOSSES; CASH DISTRIBUTIONS

      5.1   CAPITAL ACCOUNTS. The LLC will maintain for each Member an account
to be designated as such Member's "Capital Account." Each such Capital Account
shall be credited (a) with the cash contributions of the respective Members, (b)
with the fair market value of contributions of property by the respective
Members (net of liabilities associated with such contributed property and
assumed by the LLC), and (c) with the respective Member's share, determined as
provided herein, of Net Income. Each Member's Capital Account shall be debited
(a) with the respective Member's share, determined as provided herein, of Net
Loss, (b) with the cash distributed to the respective Members, and (c) with the
fair market value of all distributions of property to the respective Members
(net of liabilities associated with such distributed property). The Capital
Accounts shall be maintained in accordance with Section 1.704-1(b)(2)(iv) of the
Treasury Regulations, and the items of income, profit, gain, expenditures,
deductions, and losses that increase or decrease such capital accounts shall be
those items that, pursuant to such Treasury Regulations, affect the balance of
capital accounts.

      5.2   ALLOCATION OF NET INCOME AND NET LOSS. Subject to Sections 5.3 and
5.4 hereof, Net Income or Net Loss of the LLC for each fiscal year (except for
the Year of Termination), and all items of income, expense, and deduction
entering into the determination of such Net Income or Net Loss, shall be
allocated to the Members in proportion to their Membership Percentages.

      5.3   SPECIAL ALLOCATIONS WITH RESPECT TO CONTRIBUTED OR REVALUED
PROPERTY. If a Member contributes property to the LLC which has a difference
between its tax basis and its fair market value on the date of its contribution,
then all items of income, gain, loss, and deduction with respect to such
contributed property shall be determined and allocated among the Members, and
the Capital Accounts of the Members shall be determined in accordance with
Section 704(c) of the Code, the Treasury Regulations thereunder, and Section
1.704-1(b) of the Treasury Regulations, so as to take into account the variation
between the tax basis and fair market value of such property at the time of its
contribution. Furthermore, in the case of any required or optional revaluation
of LLC property and corresponding adjustment of Capital Accounts, taxable

                                       8
<PAGE>

income, gain, loss, and deduction with respect to such property shall be
allocated among the Members in a manner that takes into account any variation
between the adjusted tax basis of such property and its book value in the same
manner as variations between tax basis and fair market value are taken into
account under Section 704(c) of the Code in determining income, gain, loss,

      5.4   ALLOCATIONS IN CASE OF ASSIGNMENT. Net Income or Net Loss allocable
to any Member whose Membership Interest has been Assigned, in whole or in part,
during any fiscal year shall be allocated among the persons who were the holders
of such interests during such year in proportion to their respective holding
periods, without separate determination of the results of LLC operations during
such periods. Net Income or Net Loss attributable to a sale or other disposition
of all or any portion of the assets of the LLC shall be allocated to those
Members who were Members at the time of the occurrence of the disposition giving
rise to such Net Income or Net Loss.

      5.5   ALLOCATIONS FOR YEAR OF TERMINATION. Notwithstanding the provisions
of Section 5.2, Net Income or Net Loss for the Year of Termination (and any year
during which the LLC sells all or substantially all of its assets not in the
ordinary course of business), and each item of income, gain, loss and deduction
related to Net Income or Net Loss, shall be allocated to the Members in such
manner as to produce, as nearly as possible, a Capital Account balance for all
Members immediately prior to the final distribution of assets pursuant to
Section 12.3 such that the Capital Account balances of the Members are in
proportion to their Membership Percentages in the Company. To the extent that
allocations pursuant to this Section 5.5 cannot be made to satisfy the foregoing
sentence, these allocations shall be made to produce a result as close to the
result anticipated by the foregoing sentence as possible.

      5.6   DISTRIBUTION OF AVAILABLE CASH FLOW. The LLC may, but is not
obligated to, make current distributions out of Available Cash Flow as the Board
may determine. Distributions shall be made in the following priority:

            5.6.1  DISTRIBUTION OF TAX AMOUNT. At least ten days before each
date when a U.S. estimated income tax payment is due, the LLC will distribute
from Available Cash Flow to each Member its share of the Tax Amount estimated by
the LLC to have accrued during the estimated tax period prior to the
distribution date. No later than 65 days after the end of the LLC's fiscal year,
the LLC will distribute from Available Cash Flow to each Member its share of any
previously unpaid Tax Amount for such fiscal year. Distributions pursuant to
this Section 5.6.1 for each fiscal year shall be in proportion to the Members'
Membership Percentages.

            5.6.2  PAY AMOUNTS UNDER REVOLVING LOAN AGREEMENT. The LLC will next
pay amounts outstanding under the Revolving Loan Agreement from Available Cash
Flow.

            5.6.3  THE BALANCE. The LLC will next distribute the balance, if
any, of Available Cash Flow to the Members in proportion to their respective
Membership Percentages.

      5.7   DISTRIBUTIONS UPON TERMINATION. Upon termination of the LLC,
distributions will be made in accordance with Section 12.3.

                                       9
<PAGE>

      5.8   CONSEQUENCES OF DISTRIBUTIONS. Upon the determination to distribute,
remit, or pay funds in any manner expressly provided in this Article V, made in
good faith, no Member or Board Member shall incur any liability on account of
such distribution, even though such distribution may have resulted in the LLC
retaining insufficient funds for the operation of its business, which
insufficiency resulted in loss to the LLC or necessitated the borrowing of funds
by the LLC.

                                  ARTICLE VI.
                              MEMBERS AND MEETINGS

      6.1   MEETINGS. The Members shall meet at least once each fiscal year at
such place, on such date and at such time as may be fixed by the Board for the
purpose of electing Board Members and for the transaction of such other lawful
business as may come before the meeting. Special meetings of the Members may be
called by the President, the Board or any Member holding a Percentage Interest
of at least 25%, upon provision of written notice of demand to the Members or
the Secretary of the Company. No business shall be acted upon at a special
meeting that is not stated in the notice of the meeting. Member meetings may be
held by telephone or any other communications equipment by means of which all
participating Members can simultaneously hear each other during the meeting.

      6.2   QUORUM. No action may be taken at a meeting of the Members unless a
quorum consisting of at least Members holding a Majority of the Membership
Interests is present in person or by proxy. Once a Member is represented at any
meeting, such Member is deemed to be present for the remainder of that meeting
and for any adjournment. A meeting may be adjourned, and notice of an adjourned
meeting is not necessary if the date, time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is taken.

      6.3   ACTION BY WRITTEN CONSENT. Any action which may be taken by the
Members under this Agreement may be taken without a meeting if consents in
writing setting forth the action so taken are signed by the Members who own
Membership Percentages having voting power to cast not less than the minimum
number of votes necessary for such action to be taken by the Members. All
Members who do not participate in taking the action by written consent shall be
given written notice thereof by the Secretary of the LLC promptly after such
action has been taken.

      6.4   VOTING RIGHTS; REQUIRED VOTE. Each Member shall have voting power
equal to such Member's Membership Percentage. At any meeting of the Members,
each Member present (in person or by proxy) and entitled to vote shall have a
number of votes equal to such Member's Membership Percentage. At any meeting of
the Members at which a quorum is present (in person or by proxy), a majority of
the voting power present (in person or by proxy) at the time the vote is taken
is required to take action on a matter unless a vote of greater proportion is
otherwise required by this Agreement, the Certificate or the Act.

      6.5   NOTICE OF MEMBERS' MEETINGS. Written or printed notice stating the
place, date, and time of any meeting and, in the case of any special meeting, a
statement of the purposes of the meeting and the person or persons calling the
meeting, shall be sent by hand delivery or by first class, certified or
registered United States mail. Such notice must be given no fewer than

                                       10
<PAGE>

ten (10) days nor more than two (2) months before the date of the meeting, and
the notice shall be deemed to be delivered (a) when deposited in the United
States mail, postage prepaid, addressed to each Member at his or her respective
address as it appears on the records of the Company; or (ii) when received, if
sent by hand delivery.

      6.6   WAIVERS OF NOTICE. Whenever the giving of any notice to Members is
required by statute or this Agreement, a waiver thereof, in writing and
delivered to the LLC signed by the person or persons entitled to said notice,
whether before or after the event as to which such notice is required, shall be
deemed equivalent to notice. Attendance of a Member at a meeting or execution of
a written consent to any action shall constitute a waiver of notice of such
meeting or action.

      6.7   PROXIES. At all meetings of the Members, a Member may vote in person
or by proxy executed in writing by a Member or by a duly authorized
attorney-in-fact. Such proxy shall be filed with the LLC before or at the time
of the meeting. No proxy shall be valid after eleven (11) months from the date
of its execution, unless otherwise provided in the proxy.

      6.8   MATTERS REQUIRING APPROVAL OF MEMBERS. Notwithstanding any other
provision hereof, no action shall be taken, sum expended, decision made or
obligation incurred with respect to a matter within the scope of any of the
major decisions enumerated below ("Member Major Decisions"), unless such Member
Major Decision has been approved by a Majority in Interest of the Members. The
Major Decisions are:

            (i)    amendment of this Agreement;

            (ii)   the sale, exchange, assignment, mortgage, pledge or other
transfer or encumbrance of LLC property, except in the ordinary course of a
Restaurant's business;

            (iii)  borrowing money in the name of the LLC or using LLC property
as collateral for debt;

            (iv)   requiring any additional Capital Contributions to the LLC;

            (v)    any act that would prevent the LLC from conducting its
business, operating the Restaurants, or would constitute a breach of or default
under a Franchise Agreement or the Development Agreement;

            (vi)   confession of a judgment on behalf of the LLC;

            (vii)  submission of a LLC claim or liability to arbitration;

            (viii) the lending of money or extension of credit to anyone or the
guarantee of the obligations of another party, except with respect to credit
purchases of goods and services by customers of a Restaurant, in the normal
course of business;

            (ix)   the sale, assignment, mortgage, pledge or other transfer or
encumbrance of a Member's interest in the LLC or the execution of any agreement
which would purport to give

                                       11
<PAGE>

to a third party any interest in the LLC, unless said transfer is accomplished
pursuant to the procedures established in Article XII hereof; and

            (x)    admission of New Members.

                                  ARTICLE VII.
                                BOARD OF MANAGERS

      7.1   MANAGEMENT BY BOARD OF MANAGERS. The Members hereby unanimously
agree that full responsibility for management of the business and affairs of the
LLC shall be delegated to the Board.

      7.2   POWER AND AUTHORITY OF BOARD OF MANAGERS. Except as otherwise
expressly provided in this Agreement, the Board (acting on behalf of the LLC)
shall have the right, power, and authority to manage, operate and control the
business and affairs of the LLC and to do or cause to be done any and all acts,
at the expense of the LLC, deemed by the Board to be necessary or appropriate to
effectuate the purposes of the LLC. Except as otherwise expressly provided in
this Agreement or as may be approved by the Board, no Member shall have any
authority, right or power, by virtue of being a Member, to bind the LLC, or to
manage or control, or to participate in the management or control of, the
business and affairs of the LLC in any manner whatsoever. Without limiting the
generality of the foregoing, the Board shall have the right, power and authority
on behalf of the LLC:

            7.2.1  subject to the terms of any Franchise Agreement, to develop,
review and approve policies, operating guidelines, and other key operational
items for the LLC;

            7.2.2  to elect officers of the LLC in accordance with Section 8.1;

            7.2.3  to arrange for such personnel as may be necessary or
convenient to carry out the business and affairs of the LLC;

            7.2.4  to establish such reasonable cash reserves to provide for
anticipated expenses of the LLC as the Board determines to be necessary for
timely payment of such expenses; and

            7.2.5  except as relates to a Member Major Decision, to direct the
President or any other duly appointed officer of the LLC to make, execute,
assign, acknowledge, and file on behalf of the LLC any and all documents or
instruments of any kind which the Board may deem necessary or appropriate in
carrying out the business and affairs of the LLC, including, without limitation,
powers of attorney, agreements of indemnification, documents, or instruments of
any kind or character, and amendments thereto.

      Except as may be approved by the Board, no Board Member, acting
individually, shall have any authority, right or power, by virtue of being a
Board Member, to bind the Company.

      7.3   MATTERS REQUIRING APPROVAL OF THE BOARD. Notwithstanding any other
provision hereof, no action shall be taken, sum expended, decision made or
obligation incurred with respect to a matter within the scope of any of the
major decisions enumerated below ("Board

                                       12
<PAGE>

Major Decision"), unless such Board Major Decision has been approved by the
Board in accordance with this Article VII:

            (i)   approval of a Pre-Opening Budget and any Operating Budget;

            (ii)  the purchase or lease of any real property or any personal
property involving a purchase price or aggregate lease payments in excess of Ten
Thousand Dollars ($10,000) individually, or Twenty Thousand Dollars ($20,000) in
the aggregate in any fiscal year, unless in each case previously approved as
part of a Pre-Opening Budget or Operating Budget;

            (iii) the making, execution or delivery, on behalf of the LLC of any
promissory note, mortgage, deed of trust, security agreement, guarantee,
indemnity bond, surety bond, accommodation paper or endorsement, lease or
purchase agreement, or other instrument purporting to evidence any debt or
obligation, and/or renewal and extension of any of the foregoing;

            (iv)  entering into any transaction with any Member or any affiliate
of any Member; and

            (v)   the assignment, transfer, pledge, compromise or release of any
claim of or debt owning to the LLC except upon payment in full to the LLC of
such claim or debt.

      7.4   NUMBER; QUALIFICATIONS. The Board shall at all times be composed of
four (4) managers (each, a "Board Member"). Each Board Member shall be a natural
person, but need not be a resident of the State of Delaware or a Member.

      7.5   ELECTION. A Majority in Interest of the Members cast in favor of
each candidate for Board Member at the duly-called annual meeting of Members (or
any duly-called and convened special meeting called for such purpose) shall be
required for the election of each Board Member. Each Board Member shall hold
office for a term of one year or until his or her successor is elected and
qualified, or until his or her earlier death, resignation or removal.

      Notwithstanding anything herein to the contrary, the Members shall take
all appropriate actions to fix and maintain a Board consisting of four (4)
persons. Each Member hereby agrees to vote all of such Member's Percentage
Interest in favor of the election of Steve Hislop (representative of
O'Charley's), Zeb Hastings (representative of O'Charley's), Kurt Strang
(representative of the JV Partner) and Rick Stutes (representative of the JV
Partner) as Board Members at any meeting of Members at which Board Members are
to be elected. If any Board Member for any reason is unable or unwilling to
serve as a Board Member, or ceases to serve as a Board Member during his term of
office, the resulting vacancy on the Board shall be filled by a nominee
recommended by the Member for whom such vacating Board Member was a
representative (as indicated above), and each Member hereby agrees to vote all
of such Member's Percentage Interest in favor of the election of such nominee at
any meeting of Members at which Board Members are to be elected. Voting in favor
of the Board Members as set forth herein by the Members shall include, but shall
not be limited to, the voting of their Percentage Interests in the LLC, the
execution of written consents, the filling of vacancies on the Board, the
waiving of notice, the granting of proxies or the attending of meetings for the
purpose of electing and

                                       13
<PAGE>

maintaining such persons as Board Members, and the taking of such action as to
prevent the removal of the Board Members.

      7.6   INITIAL BOARD OF MANAGERS. The Members do hereby elect the following
persons to serve as the initial Board Members: Kurt Strang; Rick Stutes; Steve
Hislop and Zeb Hastings.

      7.7   VACANCIES. In the event of any vacancy in the office of a Board
Member as a result of the death, incapacity, resignation or removal of a Board
Member, such vacancy shall be filled by the Member for whom such vacating Board
Member was a representative (as indicated in Section 7.4). The Board Member
elected to fill any vacancy shall hold office until the next annual meeting of
the Members for the election of Board Members and until such Board Member's
successor is duly elected and qualified.

      7.8   REMOVAL OF BOARD MEMBERS. Any Board Member may be removed, with or
without cause, by the Member for whom such Board Member was a representative (as
indicated in Section 7.4).

      7.9   MEETINGS OF THE BOARD. Regular meetings of the Board shall be held
at least monthly on such date and at such place and time as may be fixed from
time to time by the Board (unless such meeting shall be waived by all of the
Board Members). Regular meetings of the Board shall be held on not less than ten
(10) days' notice to all Board Members. Special meetings of the Board may be
called by the President and shall be called by the President or Secretary upon
the request of any Board Member, upon two (2) days' notice to all Board Members.
No business shall be acted upon at a special meeting that is not stated in the
notice of the meeting unless approved by the Board. Meetings of the Board may be
held by conference telephone or other communications equipment by means of which
all participating Board Members can simultaneously hear each other during the
meeting.

      7.10  QUORUM. No action may be taken at a meeting of the Board unless a
quorum consisting of at least a majority of the Board Members then in office is
present in person or by proxy.

      7.11  ACTION BY WRITTEN CONSENT. Any action which may be taken by the
Board under this Agreement may be taken without a meeting if consents in writing
setting forth the action so taken are signed by all of the Board Members.

      7.12  VOTING RIGHTS; REQUIRED VOTES. Each Board Member shall be entitled
to cast one vote with respect to any matter coming before the Board. Any action
required or permitted to be taken by the Board must be approved by the
affirmative vote of a majority of the Board Members then in office.

      7.13  NOTICE OF BOARD MEETINGS. Written or printed notice stating the
place, date, and time of any meeting and, in the case of any special meeting, a
statement of the purposes of the meeting and the person or persons calling the
meeting, shall be sent by hand delivery or by first class, certified or
registered United States mail. Such notice shall be deemed to be delivered (a)
when deposited in the United States mail, postage prepaid, addressed to each
Board Member at

                                       14
<PAGE>

his or her respective address as it appears on the records of the Company; or
(ii) when received, if sent by hand delivery.

      7.14  WAIVERS OF NOTICE. Whenever the giving of any notice to Board
Members is required by statute or this Agreement, a waiver thereof, in writing
and delivered to the LLC signed by the Person or Persons entitled to said
notice, whether before or after the event as to which such notice is required,
shall be deemed equivalent to notice. Attendance of a Board Member at a meeting
or execution of a written consent to any action shall constitute a waiver of
notice of such meeting or action, except when a Board Member attends for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called.

      7.15  COMPENSATION OF BOARD MEMBERS. Board Members, as such, shall not
receive any compensation for their services; provided that nothing herein
contained shall be construed to preclude any Board Member from serving the LLC
in any other capacity and receiving compensation therefor.

      7.16  RESIGNATIONS. Any Board Member may resign at any time by giving
written notice to the Board or to the President or the Secretary of the Company.
Any such resignation shall take effect at the time specified therein, or, if no
time is specified, upon receipt thereof, and unless otherwise specified therein,
acceptance of such resignation shall not be necessary to make it effective.

      7.17  FIDUCIARY RELATIONSHIP. No Board Member shall be liable to the LLC
or its Members for monetary damages for breach of fiduciary duty as a Board
Member or otherwise liable, responsible or accountable to the LLC or its Members
for monetary damages or otherwise for any acts performed, or for any failure to
act; provided, however, that this provision shall not eliminate or limit the
liability of a Board Member (i) for any breach of the Board Member's duty of
loyalty to the LLC or its Members, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, or (iii)
for any transaction from which the Board Member received any improper personal
benefit.

      7.18  DELEGATION OF RIGHTS AND AUTHORITY. Except as otherwise expressly
provided in this Agreement, neither the Board nor any Member or Board Member may
delegate to any Person or Persons the rights and powers of the Board or of such
Member or Board Member to manage and control the business and affairs of the
Company.

      7.19  NO EXCLUSIVE DUTY. Each Member and Board Member may have other
business interests and may engage in other activities in addition to those
relating to the LLC. Neither the LLC nor any Member or Board Member shall have
any right to share or participate in such other investments or activities of any
other Member or Board Member based on the fact that each are members of the LLC.
No Member or Board Member shall incur any liability to any other Member or the
LLC as a result of engaging in any other business or venture.

                                       15
<PAGE>

                                  ARTICLE VIII.
                                    OFFICERS

      8.1   NUMBER, ELECTION AND TERM OF OFFICE. The officers of the LLC shall
be a President and a Secretary, and may at the discretion of the Board include
one or more Vice Presidents, a Treasurer, Assistant Secretaries, Assistant
Treasurers and other officers. The initial officers shall be Kurt Strang, the
LLC's President, and R. Jeffrey Williams, the LLC's Secretary, who shall hold
their respective offices until the first meeting of the Board held immediately
after the first annual meeting of the Members for the election of Board Members
and until their successors are duly elected and qualified. The officers of the
LLC subsequently shall be elected annually by the Board at its first meeting
held after the annual meeting of the Members for the election of Board Members
and shall hold their respective offices until their successors are duly elected
and qualified or until their earlier death, resignation or removal. Except as
otherwise provided by law, any number of offices may be held by the same person.

      8.2   PRESIDENT. Subject to the direction of the Board and the provisions
of this Agreement, the President (i) shall have full responsibility and
authority for management of the day-to-day operations of the LLC and (ii) shall
perform other duties customarily performed by a chief executive officer.

      8.3   SECRETARY. The Secretary, at the direction of the Board, shall
prepare and distribute promptly to each Board Member written minutes of all
meetings of the Board. The Secretary shall also be responsible for preparing and
distributing to the Board Members any notices received by the LLC or otherwise
called for by this Agreement to be given by the LLC.

      8.4   OTHER OFFICERS. The Board may appoint such other officers and agents
of the LLC as the Board shall deem necessary or appropriate to carry out the
business of the LLC upon such terms and conditions as the Board may determine.
Any such officer shall hold his or her respective office for the term specified
by the Board unless earlier removed by the Board.

      8.5   RESIGNATION. Any officer or agent of the LLC may resign at any time
by giving written notice to the Board or to the President or the Secretary of
the LLC. Any such resignation shall take effect at the time specified therein
or, if no time is specified, upon receipt thereof, and unless otherwise
specified therein, acceptance of such resignation shall not be necessary to make
it effective.

      8.6   REMOVAL; VACANCIES; TRANSFER OF DUTIES. Any officer or agent of the
LLC may be removed from office, with or without cause, by the Board at a meeting
called for that purpose. Any vacancy in the office of President or Secretary for
any reason shall be filled by a person designated by the Board for the unexpired
term of the vacant office. The Board, in its sole and absolute discretion, may
transfer the power and duties, in whole or in part, of any officer to any other
officer, or persons, notwithstanding the provisions of this Agreement, except as
otherwise provided by the laws of the State of Delaware.

      8.7   COMPENSATION. The officers of the LLC shall be entitled to such
salary or other compensation as the Board shall determine. The President shall
initially be paid an annual salary of $100,000.

                                       16
<PAGE>

      8.8   THIRD PARTY RELIANCE. Third parties dealing with the LLC shall be
entitled to rely conclusively upon the power and authority of the officers of
the LLC as set forth herein.

                                   ARTICLE IX.
                                 INDEMNIFICATION

      9.1   AUTHORITY TO INDEMNIFY. The LLC shall indemnify, and upon request
may advance expenses to, any Member, Board Member, officer, employee, or agent
of the LLC, or any person who is serving at the request of the LLC in any such
capacity with another Entity, to the extent, consistent with public policy,
permitted by applicable law.

      9.2   INSURANCE. The LLC may purchase and maintain insurance on behalf of
an individual who is or was a Board Member, officer, employee, independent
contractor, or agent of the LLC or who, while a Board Member, officer, employee,
independent contractor, or agent of the LLC, is or was serving at the request of
the LLC as a manager, officer, employee, independent contractor, agent, partner,
or trustee of another foreign or domestic limited liability company,
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise, against liability asserted against or incurred by such individual in
that capacity or arising from such individual's status as a Board Member,
officer, employee, independent contractor or agent of the LLC whether or not the
LLC would have the power to indemnify such individual against the same liability
as provided in Section 9.1 hereof.

      9.3   NON-EXCLUSIVE RIGHT. The indemnification granted pursuant to or
provided by this Article IX shall not be deemed exclusive of any other rights to
which a person seeking indemnification may be entitled, whether contained in
this Article IX, the Certificate of Formation, in the Act, in a resolution of
the Members, in a resolution of the Board or an agreement providing for such
indemnification. This Section 9.3 does not limit the LLC's power to pay or
reimburse expenses incurred by any person in connection with his or her
appearance as a witness in a proceeding at a time when he or she has not been
named defendant or respondent to the proceeding.

                                   ARTICLE X.
                                 FISCAL MATTERS

      10.1  BOOKS AND RECORDS. Full and accurate books and records of the LLC
(including without limitation all information and records required by the Act)
shall be maintained in accordance with accounting principles generally accepted
in the United States at its principal place of business showing all receipts and
expenditures, assets and liabilities, profits and losses, and all other records
necessary for recording the LLC's business and affairs. All Members shall have
the right to inspect and copy the books and records of the LLC, during regular
business hours, at the LLC's principal place of business, upon provision of
notice in writing by any Member to the LLC at least five business days before
the date on which such Member desires to inspect and copy said books and
records.

      10.2  FISCAL YEAR. The fiscal year of the LLC shall end on the last Sunday
in December of each year.

                                       17
<PAGE>

      10.3  ACCOUNTING SERVICES. O'Charley's will provide all accounting for the
LLC, including banking and treasury functions, credit card processing, general
ledger accounting, financial reporting, accounts payable processing, fixed
assets and such other accounting related services as O'Charley's and the LLC
shall mutually agree.

      10.4  TAX STATUS. Each of the Members recognizes that it is the intention
of the LLC to be treated as a "partnership" for federal and all relevant state
tax purposes and (ii) the LLC will be treated as a "partnership" for federal and
all relevant state tax purposes and shall make all available elections to be so
treated. All provisions of the LLC's Certificate of Formation and this Agreement
are to be construed so as to preserve that tax status. Within ninety (90) days
after the end of each fiscal year, the LLC will cause to be delivered to each
person who was a Member at any time during such fiscal year a Form K-1 and such
other information, if any, with respect to the LLC as may be necessary for the
preparation of each Member's federal, state or local income tax (or information)
returns, including a statement showing each Member's share of income, gain or
loss, and credits for the fiscal year.

      10.5  TAX MATTERS MEMBER. O'Charley's shall be the initial Tax Matters
Member. The TMM shall promptly give notice to all Members of any administrative
or judicial proceeding pending before the Internal Revenue Service involving any
Company item and the progress of all proceedings. The TMM shall have all the
powers provided to a tax matters partner under Sections 6221 through 6233 of the
Code, including the specific power to extend the statute of limitations with
respect to any matter that is attributable to any Company item or affecting any
item pending before the Internal Revenue Service and to select the forum to
litigate any tax issue or liability arising from LLC items. The TMM may resign
the position by giving thirty (30) days written notice to the Board, whereupon
the Board shall promptly vote to designate a new TMM. The Board may, without
cause, remove the TMM, whereupon the Board shall promptly vote to designate a
new TMM. The TMM shall be entitled to reimbursement for any and all reasonable
expenses incurred with respect to any administrative and/or judicial proceedings
affecting the LLC.

      10.6  PRE-OPENING BUDGET. Within thirty (30) days from O'Charley's
approval of a location for any Restaurant under the Development Agreement, the
President shall prepare and submit to the Board for its consideration and
approval a budget ("Pre-Opening Budget") setting forth the estimated costs and
expenditures of the LLC for the establishment and operation of such Restaurant
through the first day of opening to the public. The Pre-Opening Budget shall set
forth, without limitation, cost of land, estimated lease costs, costs of
improvements to the Restaurant premises, furniture, fixtures and equipment,
training and payroll, supplies, inventory, and advertising. The Board shall
approve or disapprove of the Pre-Opening Budget in writing within thirty (30)
days after its submission. Subject to the foregoing and provided the President
shall not deviate therefrom in any material amount or item without the consent
of the Board, upon approval of a Pre-Opening Budget, the President shall
implement the Pre-Opening Budget under the direction of the Board and shall be
authorized, without the need for further approval to make the expenditures and
incur the obligations provided for in the Pre-Opening Budget.

      10.7  OPERATING BUDGET. Within thirty (30) days prior to the beginning of
each calendar year, the President shall prepare and submit to the Board for its
consideration and approval a budget ("Operating Budget"), setting forth the
estimated costs and expenditures of the

                                       18
<PAGE>

LLC for the next calendar year. The Board shall approve or disapprove an
Operating Budget in writing within thirty (30) days of its submission. Subject
to the foregoing and provided the President shall not deviate therefrom in any
material amount or item without the consent of the Board, upon approval of an
Operating Budget, the President shall implement the Operating Budget and shall
be authorized, without the need for further approval to make the expenditures
and incur the obligations provided for in the Operating Budget.

                                  ARTICLE XI.
                 ASSIGNMENT AND TRANSFER OF MEMBERSHIP INTERESTS

      11.1  TRANSFER OF MEMBERSHIP INTERESTS. Except as otherwise provided in
this Article XI, a Member may not Assign all or any part of such Member's
Membership Interest in the LLC (including any Financial Rights, Governance
Rights, or other rights pertaining to a Membership Interest) to any person
without the prior written consent of Members holding a majority of the
Membership Interests. O'Charley's shall have the right to Assign all or any part
of its Membership Interest in the LLC (including any Financial Rights,
Governance Rights or other rights pertaining to its Membership Interest) to any
of its Affiliates.

      11.2  RESTRICTIONS ON ASSIGNMENT NOT UNREASONABLE. Each of the Members
hereby agrees and acknowledges that the restrictions on Assignment contained in
this Article XI are not unreasonable in view of the nature of the parties and
their relationships to one another and the nature of the business of the LLC.

      11.3  ADMISSION OF NEW MEMBERS. An Assignment effected in accordance with
this Article XI shall become effective and the assignee shall become a New
Member and entitled to the rights of a Member under this Agreement upon (a)
executing a copy of this Agreement and agreeing to be bound hereby and (b)
delivering such executed copy to the LLC in accordance with Section 13.1 hereof.
Upon receipt of such executed copy, the LLC will cause Exhibit A to be amended
appropriately and will deliver to all Members, including the New Member, in
accordance with Section 13.1 hereof, a copy of amended Exhibit A.

      11.4  RIGHTS AND OBLIGATIONS OF FORMER MEMBERS. A Member who Assigns all
of his, her, or its Membership Interest shall cease to be a Member; provided,
however, that such former Member or any Successor shall remain liable to the LLC
(a) for any obligations of such Member for wrongful distributions under Section
18-607 of the Act, and (b) pursuant to any contribution agreements with the LLC
existing at the time of the Assignment of all such Membership Interest.

      11.5  JV PARTNER PURCHASE OPTION. In the event that the LLC (i) has opened
three Restaurants in accordance with the Development Agreement; (ii) is not in
default of the terms of any of the Franchise Agreements or this Agreement; and
(iii) has received a commitment for financing the remaining Restaurants under
the Development Agreement on terms reasonably satisfactory to O'Charley's, the
JV Partner shall thereupon have the right, but not the obligation, for a period
beginning on the date that is six months following the opening of the third
Restaurant under the Development Agreement and ending on the date that is
eighteen (18) months after the opening of the third Restaurant under the
Development Agreement, to purchase all, but not less than all, of O'Charley's'
Membership Interest in the LLC by giving written notice (the "JV Election
Notice") to the LLC and O'Charley's. As a condition to the JV Partner's

                                       19
<PAGE>

exercise of such option, the JV Partner (or the LLC) will be required at the
Closing to: (a) pay O'Charley's the amount set forth in the table below for each
of the three (3) Restaurants based on the trailing twelve (12) months' Gross
Sales for each Restaurant at the time of the exercise of the option, it being
understood that for any Restaurant that has been open less than twelve (12)
months, the Gross Sales shall be determined by annualizing the average monthly
Gross Sales for each full month of any such Restaurant's operation; (b) pay
O'Charley's the applicable development fees for the exclusive right to develop
the remaining Restaurants under the terms of the Development Agreement; (c)
continue to pay the royalty and other fees under the Franchise Agreements for
the existing and future Restaurants; (d) pay all amounts outstanding under the
Revolving Loan Agreement; (e) obtain a release of O'Charley's' guaranty of any
debt or other obligations of the LLC, including the Loan Program; and (f)
provide satisfactory evidence to O'Charley's of the commitment for financing
referred to in subsection (iii) above.

<TABLE>
<CAPTION>
ANNUALIZED RESTAURANT GROSS SALES                    PAYMENT PER RESTAURANT
---------------------------------                    ----------------------
<S>                                                  <C>
Less than $2.7 million                                       $175,000
$2.7 million > $2.8 million                                  $150,000
$2.8 million > $2.9 million                                  $125,000
$2.9 million > $3.0 million                                  $100,000
Greater $3.0 million                                         $ 50,000
</TABLE>

      11.6  O'CHARLEY'S PURCHASE OPTION. In the event that (i) the JV Partner
does not exercise its option to purchase O'Charley's' Membership Interest in the
LLC pursuant to Section 11.5 hereof prior to the expiration of such option; (ii)
the JV Partner is not entitled to exercise its option to purchase O'Charley's'
Membership Interest pursuant to Section 11.5 hereof; or (iii) O'Charley's has
terminated the Development Agreement or any of the Franchise Agreements in
accordance with their terms, O'Charley's shall thereupon have the right for a
period of 180 days thereafter, but not the obligation, to purchase all, but not
less than all, of the JV Partner's Membership Interest in the LLC by giving
written notice (the "O'Charley's Notice") to the LLC and the JV Partner. As a
condition to O'Charley's exercise of such option, O'Charley's will be required
at the Closing to: (a) pay the JV Partner the amount set forth in the table
below for each of the then-existing Restaurants based on the trailing twelve
(12) months' Gross Sales for each Restaurant at the time of the exercise of such
option, it being understood that for any Restaurant that has been open less than
twelve (12) months, the Gross Sales shall be determined by annualizing the
average monthly Gross Sales for each full month of any such Restaurant's
operation; and (b) obtain a release of the JV Partner's guaranty of any debt or
other obligations of the LLC.

<TABLE>
<CAPTION>
ANNUALIZED RESTAURANT GROSS SALES                        PAYMENT PER RESTAURANT
---------------------------------                        ----------------------
<S>                                                      <C>
Less than $2.7 million                                          $ 50,000
$2.7 million > $2.8 million                                     $ 75,000
$2.8 million > $2.9 million                                     $125,000
$2.9 million > $3.0 million                                     $150,000
Greater $3.0 million                                            $200,000
</TABLE>

                                       20
<PAGE>

      11.7  CLOSING. The sale or purchase of any Member's Membership Interest,
or portion thereof, pursuant to this Article XI and payment therefor (the
"Closing") shall take place at the principal offices of the LLC on such date as
the parties to the transaction may, acting reasonably, agree upon. At the
Closing, in addition to any obligations of the selling Member set forth in
Section 11.5, the selling Member shall deliver to the purchasing Member the
following executed documentation, in form reasonably acceptable to the
purchasing Member:

            (i)   an assignment of its Membership Interest;

            (ii)  the resignation of each of its designees who are acting as
                  members of the Board or officers of the LLC;

            (iii) a representation and warranty by the selling Member that its
                  Membership Interest is free and clear of all options, liens,
                  charges and encumbrances whatsoever, which representation and
                  warranty will survive Closing and will continue forever;

            (iv)  a general release of all claims against the LLC and the
                  purchasing Member relating to LLC matters; and

            (v)   such other documentation as the purchasing Member may
                  reasonably require in order to vest in the purchasing Member
                  or its designee full right, title and interest in and to the
                  Membership Interest of the selling Member.

      At the Closing, the purchasing Member will deliver to the selling Member
(i) the purchase price in immediately available funds and (ii) an indemnity
indemnifying the selling Member against any claims arising from the conduct of
the business of the LLC from and after the time of Closing.

                                  ARTICLE XII.
         DISSOLUTION, WINDING UP, AND TERMINATION OF THE LLC'S EXISTENCE

      12.1  TERM. The duration of the LLC shall be perpetual and shall continue
until terminated in accordance with the provisions of this Agreement or the Act.

      12.2  EVENTS CAUSING DISSOLUTION AND WINDING UP. The LLC shall be
dissolved and its affairs wound up upon the occurrence of any of the following
events (individually, a "Dissolution Event"):

            (i)   at any time with the prior approval of a Majority of Interest
                  of the Members; or

            (ii)  as may be otherwise required by law.

Upon the occurrence of a Dissolution Event, the LLC shall be terminated when the
winding up of the LLC's affairs has been completed following dissolution.

                                       21
<PAGE>

      12.3  WINDING UP AFFAIRS ON DISSOLUTION. Upon dissolution of the LLC, the
officers, Board Members or other persons required or permitted by law to carry
out the winding up of the affairs of the LLC shall promptly notify all Members
of such dissolution; shall wind up the affairs of the LLC; shall prepare and
file all instruments or documents required by law to be filed to reflect the
dissolution of the LLC; and, after collecting the debts and obligations owed to
the LLC and after paying or providing for the payment of all liabilities and
obligations of the LLC, shall distribute any remaining assets to the Members in
accordance with the positive balances in their respective Capital Accounts. In
the event of a distribution of assets in kind (in whole or in part), the fair
market value of the assets shall be determined and each Member's Capital Account
shall be adjusted as if such asset were sold for its fair market value. Each
Member shall receive an undivided interest in the assets of the Company equal in
value to the portion of the proceeds to which the Member would have been
entitled if the assets had been sold or otherwise converted to cash at the
assets' fair market values and the distribution had been solely in the form of a
cash distribution. Division of the property may be made on a non-pro rata basis
upon the consent of all of the Members, so that certain Members own certain
assets while other Members own other assets.

      12.4  WAIVER OF RIGHT TO PARTITION AND DECREE OF DISSOLUTION. As a
material inducement to each Member to execute this Agreement, each Member
covenants and represents to each other Member that, during the period beginning
on the date of this Agreement, no Member, nor such Member's heirs,
representatives, successors, transferees, or assigns, will attempt to make any
partition whatever of the assets of the LLC or any interest therein whether now
owned or hereafter acquired, and each Member waives all rights of partition
provided by statute or principles of law or equity, including partition in kind
or partition by sale. The Members agree that irreparable damage would be done to
the goodwill and reputation of the LLC if any Member should bring an action in a
court to dissolve the LLC. The Members agree that there are fair and just
provisions for payment and liquidation of the interest of any Member in the LLC,
and fair and just provisions to prevent a Member from selling or otherwise
alienating his or her interest in the LLC. Accordingly, each Member hereby
waives and renounces his, her or its right to such a court decree of dissolution
or to seek the appointment by court of a liquidator or receiver for the LLC.

                                  ARTICLE XIII.
                               GENERAL PROVISIONS

      13.1  NOTICES. All notices and other communications required or permitted
to be given in respect of this Agreement shall be in writing, and sent by
facsimile, courier service, hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid). Written notice by
the LLC to the Members is effective when mailed, if mailed and correctly
addressed to the Member's address as reflected in the LLC's records. Written
notice to the LLC may be addressed to the LLC's registered agent at its
registered office or to the LLC's Secretary at the LLC's principal executive
office. Written notice to the LLC is effective at the earliest of the following:
(a) when received; (b) five days after its deposit in the United States mail, if
correctly addressed and first class postage affixed thereon; or (c) on the date
shown in the return receipt, if sent by registered or certified mail, return
receipt requested, and the receipt is signed by or on behalf of the addressee.

                                       22
<PAGE>

      13.2  INTEGRATION. This Agreement embodies the entire agreement and
understanding among the Members relating to the formation and operation of the
LLC and supersedes all prior agreements and understandings, if any, among and
between the Members relating to the subject matter hereof.

      13.3  APPLICABLE LAW. This Agreement and the rights of the Members shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware and specifically the Act. All actions or proceedings relating
to this Agreement (whether to enforce a right or obligation or obtain a remedy
or otherwise) will be brought solely in the state or federal courts located in
or for Davidson County, Tennessee. Each party hereby unconditionally and
irrevocably consents to the jurisdiction of such courts and waives its rights to
bring any action or proceeding against the other party except in such courts.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world. Each of the parties irrevocably
waives any right to a jury trial with respect to any matter arising out of or in
connection with this Agreement. If any party seeks to enforce its right under
this Agreement by joining another party to a judicial proceeding before a jury
in which such third party is a party, the parties will request the court to try
the claims between the parties to this Agreement without submitting the matter
to the jury.

      13.4  SEVERABILITY. In case any one or more of the provisions contained in
this Agreement or any application thereof shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and any other application thereof shall
not in any way be affected or impaired thereby.

      13.5  BINDING EFFECT. Except as herein otherwise provided to the contrary,
this Agreement shall be binding upon, and inure to the benefit of, the Members
and their respective heirs, executors, administrators, successors, transferees
and assigns.

      13.6  TERMINOLOGY. All personal pronouns used in this Agreement, whether
used in the masculine, feminine, or neuter gender, shall include all other
genders; and the singular shall include the plural, and vice versa. Titles and
Articles are for convenience only and neither limit nor amplify the provisions
of this Agreement itself.

      13.7  AMENDMENT. This Agreement may be amended, modified, or supplemented
in writing (a) with the consent of the Members holding a Majority of the
Membership Interests and (b) with respect to Exhibit A hereto, under the
circumstances set forth in Section 4.5. No other written or oral agreement,
understanding, instrument or writing other than this agreement or any amendment
hereto shall constitute part of the limited liability company agreement of the
LLC. Notwithstanding anything herein to the contrary, no amendment or
modification that disproportionately affects the interests of any Member in the
capital, Net Profits or Net Losses of, or distributions or allocations with
respect to, the LLC shall be effective as to any Member unless the same has been
set forth in a document duly executed by such Member.

      13.8  EXECUTION OF ADDITIONAL INSTRUMENTS. Each Member hereby agrees to
execute such other and further statements of interest and holdings,
designations, powers of attorney, and other instruments necessary to comply with
any laws, rules, or regulations.

                                       23
<PAGE>

      13.9  WAIVERS. The failure of any party to seek redress for violation of
or to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation.

      13.10 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive the right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the Members
may have by law, statute, ordinance, or otherwise.

      13.11 HEIRS, SUCCESSORS, AND ASSIGNS. Each and all of the covenants,
terms, provisions and agreements herein contained shall be binding upon and
inure to the benefit of the Members hereto and, to the extent permitted by this
Agreement, their respective heirs, legal representatives, successors, and
assigns.

      13.12 CREDITORS. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the LLC.

      13.13 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same instrument.

                           [Signature page to follow.]

                                       24
<PAGE>

      IN WITNESS WHEREOF, the undersigned hereby agrees, acknowledges and
certifies that the foregoing Agreement constitutes the limited liability company
agreement of JFC Enterprises, LLC adopted by the Members of the LLC as of the
20th day of August, 2004.

                                           /s/ Kurt Strang
                                           ------------------------------------
                                          Kurt Strang

                                          O'CHARLEY'S INC.

                                          By: /s/ Gregory L. Burns
                                             ----------------------------------
                                          Name:  Gregory L. Burns
                                          Title: Chairman and CEO

                                       25
<PAGE>

                                   EXHIBIT A

<TABLE>
<CAPTION>
MEMBERS NAME AND ADDRESS                  CAPITAL CONTRIBUTION             MEMBERSHIP PERCENTAGES
------------------------                  --------------------             ----------------------
<S>                                       <C>                              <C>
Kurt Strang                                     $250,000                              50%
109 Grand Cypress Creek Drive
Broussard, Louisiana 70518

O'Charley's Inc.                                $      0                              50%
3038 Sidco Drive
Nashville, Tennessee 37238

TOTAL                                           $250,000                             100%
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]