Document:

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                                                                   EXHIBIT 10.25

                            [O'CHARLEY'S INC. LOGO]

                                O'CHARLEY'S INC.

                               OPERATING AGREEMENT

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                                TABLE OF CONTENTS

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

ARTICLE II     Construction; Opening.................................................        4

ARTICLE III    Prerequisites To License Effectiveness................................        4

ARTICLE IV     Term And Renewal......................................................        6

ARTICLE V      Fees..................................................................        8

ARTICLE VI     Licensor's Obligations................................................       11

ARTICLE VII    Operator's Agreements, Representations, Warranties And Covenants......       13

ARTICLE VIII   Restaurant Operations.................................................       20

ARTICLE IX     Advertising And Related Fees..........................................       25

ARTICLE X      Proprietary Marks.....................................................       30

ARTICLE XI     Confidentiality And Non-competition Covenants.........................       32

ARTICLE XII    Books And Records.....................................................       37

ARTICLE XIII   Insurance.............................................................       38

ARTICLE XIV    Debts and Taxes.......................................................       40

ARTICLE XV     Transfer of Interest..................................................       41

ARTICLE XVI    Indemnification.......................................................       47

ARTICLE XVII   Relationship Of The Parties...........................................       48

ARTICLE XVIII  Termination...........................................................       48

ARTICLE XIX    Post-Termination......................................................       52

ARTICLE XX     Miscellaneous.........................................................       56

ARTICLE XXI    Acknowledgments.......................................................       60
</TABLE>

<TABLE>
<S>                                                                                        <C>
Attachment A     Location and Opening Date...........................................      A-1
Attachment B     Statement of Ownership Interests and Principals.....................      B-1
Attachment C     Confidentiality and Non-Compete Agreement...........................      C-1
Attachment D     Software License Agreement..........................................      D-1
Attachment E     Electronic Fund Transfer Authorization..............................      E-1
Attachment F     Guaranty............................................................      F-1
</TABLE>

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                                O'CHARLEY'S INC.

                               OPERATING AGREEMENT

         THIS OPERATING AGREEMENT (the "Agreement") is made and entered into
this _____ day of ________________, 20___, by and among O'Charley's Inc., a
Tennessee corporation ("Licensor"), _________________________ ("Operator"),
____________________, ___________________________ and _______________________
(each a "Controlling Principal;" collectively the "Controlling Principals").

                                   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;

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         WHEREAS, Licensor, Operator and the Controlling Principals have entered
into a Development Agreement dated as of __________ _____, 20__ (the
"Development Agreement"), relating to the development by Operator of O'Charley's
restaurants;

         WHEREAS, Operator desires to use the System in connection with the
operation of a full-service O'Charley's restaurant at the location specified in
Attachment A hereto, as well as to receive the training and other assistance
provided by Licensor in connection therewith; and

         WHEREAS, the license granted pursuant to this Agreement is for the
__________ Restaurant developed under the 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 Operator and its Controlling Principals hereunder, Licensor hereby
grants to Operator, upon the terms and conditions in this Agreement, the right,
license and obligation, and Operator hereby accepts the right, license and
obligation, to operate, during the term of this Agreement, a full-service
O'Charley's restaurant under the Proprietary Marks and the System in accordance
with this Agreement (the "Restaurant" or "Licensed Business").

         B. The specific street address of the Restaurant location accepted by
Licensor shall be set forth in Attachment A (the "Location"). Operator shall not
relocate the Restaurant without the express prior written consent of Licensor.
This Agreement does not grant to Operator the right or license to operate the
Restaurant or to offer or sell any products or services described in this
Agreement at or from any other location.

         C. If Operator is unable to continue the operation of the Restaurant at
the accepted Location because of the occurrence of a Force Majeure event, then
Operator may request approval of Licensor to relocate the Restaurant to another
location. Any other request to relocate the Restaurant shall also be subject to
the same procedures. If Licensor elects to grant Operator the right to relocate
the Restaurant, then Operator shall comply with the site selection and
construction procedures set forth in the Development Agreement.

         D. Except as provided in this Agreement, and subject to Operator's full
compliance with this Agreement and any other agreement among Operator and any of
its Affiliates and Licensor or any of its Affiliates, neither Licensor nor any
Affiliate shall establish or authorize any other person or any other
corporation, limited liability company, partnership, limited partnership, joint
venture, association, trust, unincorporated association or other business
organization (each, an "Entity"), other than Operator, to establish a
full-service Restaurant within the radius of the Location set forth on
Attachment A hereto. Notwithstanding the foregoing, Operator acknowledges and
agrees that Licensor and its Affiliates may (or may authorize a third party to)
conduct any of the following activities, regardless of proximity to the Location
or the Restaurant:

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                  (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.

                  (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 Restaurant 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.

                  (3) Licensor and its Affiliates may offer and sell (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").

                  (4) Licensor and its Affiliates may operate (or may authorize
others to operate) 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, port authorities), hospitals and
other health care facilities, cafeterias, commissaries, schools, hotels, sports
and entertainment facilities (e.g., stadiums, arenas, ballparks, convention
centers) and other mass gathering locations or events designated by Licensor
(each, an "Excluded Area"). Licensor may first offer to Operator the right to
offer and sell the O'Charley's restaurant products in the Excluded Area within
the Territory. Operator must meet each of the conditions outlined in Section
III(A), and any other criteria and qualifications deemed necessary by Licensor,
or any other third party involved in the arrangement, such as an airport or
stadium authority, educational institution or other facilities operator
("Facilities Operator"), to offer for sale and sell the O'Charley's restaurant
products and services in the Excluded Area. If Operator does not meet all of the
criteria and qualifications required by Licensor and the Facilities Operator,
then Operator shall not be granted the right to offer for sale and sell such
products and services within the Excluded Area and Licensor may conduct such
business itself, or authorize any other person or Entity to do so. If Operator
meets all the conditions, criteria and qualifications, Licensor shall offer to
Operator the right to offer for sale and sell such products and services on such
terms and conditions as such arrangements may be offered to third parties as
determined by Licensor or such Facilities Operator, as applicable. Once such
offer has been made to Operator by Licensor in writing, Operator shall have the
right to accept such offer within thirty (30) days after receipt of such written
notification. If Operator fails to notify Licensor in writing of Operator's
intent to accept the offer within such thirty (30) day time period or Operator
fails to meet any criteria or qualifications imposed by Licensor or the
Facilities Operator, 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.

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                  E. After Operator's selection of an accepted Location for the
Restaurant, Operator shall make all commercially reasonable efforts to advertise
and promote the Licensed Business in accordance with Article IX.

                  F. After this Agreement expires or is terminated, Licensor
shall have the complete and unrestricted right to operate or license other
persons to operate a restaurant utilizing the System at the Location.

                                   ARTICLE II
                              CONSTRUCTION; OPENING

         A. Operator assumes all cost, liability, expense and responsibility for
locating, obtaining and developing a site for the Restaurant within the Location
and for constructing and equipping the Restaurant at such site in accordance
with the terms of the Development Agreement and this Agreement. Operator
acknowledges that the location, selection, procurement and development of a site
for the Restaurant is Operator's responsibility; that in discharging such
responsibility Operator may consult with real estate and other professionals of
Operator'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.

         B. The Location of the Restaurant shall be described in Attachment A,
which description shall be the legal description and/or street address of the
site owned or leased by Operator at which the Restaurant is to be located.

         C. Operator acknowledges that time is of the essence. Subject to
Operator's compliance with the conditions stated below, Operator shall open the
Restaurant and commence business on or before __________ _____, 20__, as such
date may be extended or amended under the Development Agreement. The date the
Restaurant opens for business to the public as provided herein ("Opening Date")
shall be set forth in Attachment A, as such date may be extended or amended
under the Development Agreement. Prior to opening, Operator shall complete all
exterior and interior preparations for the Restaurant, including installation of
equipment, fixtures, awnings, furnishings, neons and signs, pursuant to the
plans and specifications approved by Licensor, and shall comply with all other
pre-opening obligations of Operator, including, but not limited to, those
obligations described in Article VII and in the Manuals, to Licensor's
satisfaction. If Operator fails to comply with any of such obligations, Licensor
shall have the right to prohibit Operator from opening the Restaurant and
commencing business.

                                   ARTICLE III
                     PREREQUISITES TO LICENSE EFFECTIVENESS

         A. In the event that Operator shall have obtained Licensor's acceptance
of a particular proposed site for the Restaurant pursuant to the provisions of
the Development Agreement and shall have paid to Licensor all of the license
fees due under this Agreement and the Development Agreement, and if Licensor, in
the exercise of its sole and absolute discretion,

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has granted Operator, in writing, "Operational Approval," "Financial Approval,"
"Legal Approval" and "Ownership Approval" approval, then the license granted to
Operator to operate the Restaurant under Article I shall become effective.
Licensor will give Operator Operational Approval, Financial Approval, Legal
Approval and Ownership Approval if the conditions under the following
subsections are met.

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

                           (a) Operator is in compliance with the Development
Schedule (as that term is defined in the Development Agreement, and including
any extensions approved by Licensor in writing) and this Agreement and has
opened the Restaurant as required under the Development Schedule (including any
extensions approved by Licensor in writing);

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

                           (c) Operator is conducting the operation of its
existing Restaurants, if any, and is capable of conducting the operation of the
Restaurant to be opened under this Agreement and required under the Development
Schedule:

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

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

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

                                             (A) set forth and described in the
                                    Manuals, 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;
                                    and

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

                  (2) Operator 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) Operator and the Controlling Principals satisfy
Licensor's current financial criteria for operators and controlling principals
of O'Charley's restaurants with respect to Operator's operation of its existing
Restaurants, if any, and the proposed Restaurant;

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

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

                           (d) Operator 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 Operator 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 the individual
license for the proposed Restaurant or pursuant to any right granted to Operator
by the Development Agreement or by the Operating Agreement between Operator 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 Operator nor any of its Controlling
Principals (as applicable) shall have transferred a Controlling Interest in
Operator; and

                           (b) Operator and the 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 Operator.

         B. 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 Operator or any Controlling Principal has any legal or
equitable interest. It is further understood and agreed that Operator and the
Controlling Principals have an ongoing responsibility to operate the Restaurant
in a manner which satisfies the foregoing requirements for Operational Approval,
Financial Approval, Legal Approval and Ownership Approval.

                                   ARTICLE IV
                                TERM AND RENEWAL

         A. Unless sooner terminated as provided in Article XVIII hereof, the
term of this Agreement shall continue from the date stated on the first page
hereof until the earlier of (1) fifteen (15) years from Opening Date or (2) the
expiration or termination of Operator's right to possess the Restaurant
premises.

         B. Operator may, at its option, renew the rights under this Agreement
for one additional term of fifteen (15) years, and thereafter for additional
terms of five (5) years (in each case, provided that the applicable renewal term
shall automatically terminate upon the expiration or termination of Operator's
right to possess the Restaurant premises), subject to any or all of the

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following conditions which must, as determined in Licensor's sole discretion, be
met prior to and at the time of renewal:

                  (1) Operator shall give Licensor written notice of Operator's
election to renew not less than twelve (12) months nor more than eighteen (18)
months prior to the end of the initial term, or the first renewal term, as
applicable;

                  (2) Operator shall repair or replace, at Operator's cost and
expense, equipment (including electronic cash register or computer hardware, or
software systems, updates or upgrades, including any software licensed to
Operator pursuant to the Software License Agreement required to be executed
under Section VIII(F)), signs, awnings, neons, interior and exterior decor
items, fixtures, furnishings, delivery vehicles, if applicable, supplies and
other products and materials required for the operation of the Restaurant as
Licensor may reasonably require and shall obtain, at Operator's cost and
expense, any new or additional equipment, fixtures, supplies and other products
and materials which may be reasonably required by Licensor for Operator to offer
and sell new menu items from the Restaurant and shall otherwise modernize the
Restaurant premises, equipment (including electronic cash register or computer
hardware and software systems, including updates or upgrades), signs, awnings,
neons, interior and exterior decor items, fixtures, furnishings, delivery
vehicles, if applicable, supplies and other products and materials required for
the operation of the Restaurant, as reasonably required by Licensor to reflect
the then-current standards and image of the System as contained in the Manuals
or otherwise provided in writing by Licensor;

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

                  (4) Operator and its Affiliates shall have satisfied all
monetary obligations owed by Operator and its Affiliates to Licensor and its
Affiliates under this Agreement and any other agreement between Operator, and
any of its Affiliates and Licensor or its Affiliates and shall have
substantially and timely met those obligations throughout the terms thereof;

                  (5) Operator shall present satisfactory evidence that Operator
has the right to remain in possession of the Restaurant premises or obtains
Licensor's acceptance of a new site for the operation of the Restaurant for the
duration of the renewal term of this Agreement;

                  (6) Operator shall execute Licensor's then-current form of
renewal operating agreement, which agreement shall supersede this Agreement in
all respects and the terms of which may differ from the terms of this Agreement,
including, without limitation, a higher percentage royalty fee, marketing fee,
advertising contribution or expenditure requirement; and any and all other
documents Licensor may then require for renewal; provided, however, that
Operator shall pay to Licensor, in lieu of an initial license fee, a renewal fee
representing one half (1/2) of Licensor's then-current initial license fee for
operators who have opened more than two (2) restaurants;

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                  (7) Operator and the Controlling Principals shall execute a
general release of any and all claims against Licensor and its Affiliates, and
each such Entity's respective officers, directors, shareholders, partners,
agents, representatives, independent contractors, servants and employees, in
their corporate and individual capacities, including, without limitation, claims
arising under this Agreement or under federal, state or local laws, rules,
regulations or orders; and

                  (8) Operator shall meet Licensor's then-current financial,
organizational, training, certification, staffing and other qualification
requirements.

                                    ARTICLE V
                                      FEES

         A.       (1) If Operator is licensing the first or second Restaurant
developed under a Development Agreement, Operator shall pay to Licensor a
license fee of Fifty Thousand Dollars ($50,000), one half (1/2) of which was
paid as a fee for development upon execution of the Development Agreement, and
the remaining one half (1/2) of which will be paid upon execution of this
Agreement.

                  (2) If Operator is licensing the third or any subsequent
Restaurant developed under a Development Agreement, Operator shall pay to
Licensor a license fee of Twenty-Five Thousand Dollars ($25,000), one half (1/2)
of which was paid as a fee for development upon execution of the Development
Agreement, and the remaining one half (1/2) of which will be paid upon execution
of this Agreement.

                  (3) The portion of the license fee paid in connection with
this Agreement shall be deemed fully earned and non-refundable in partial
consideration of the administrative and other expenses incurred by Licensor in
granting the license hereunder and for its lost or deferred opportunity to grant
such license to any other party.

         B.       (1) During the term of this Agreement, Operator shall pay to
Licensor, in partial consideration for the rights herein granted, a continuing
royalty fee of four percent (4%) of Gross Sales as defined under Section V(C).
Such royalty fee and any other fee required by this Agreement shall be due and
payable on the tenth (10th) day of each Accounting Period based on the Gross
Sales for the preceding Accounting Period (the first such Accounting Period
beginning on the date established by Licensor). Such payment shall be delivered
by Operator to Licensor by electronic funds transfer ("EFT") to the account
designated by Licensor, in writing, so that it is received by Licensor on the
tenth (10th) day of the applicable Accounting Period, provided that such day is
a Business Day. A "Business Day" for the purpose of this Agreement means any day
other than Saturday, Sunday or 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. If the date on
which such payment would otherwise be due is not a Business Day, then payment
shall be due on the next Business Day. For purposes of this Agreement, the term
"Accounting Periods" shall mean the accounting periods for the Restaurant as
established by Licensor and described in the Manuals from time to time.

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                  (2) Each such royalty fee payment shall be preceded or
accompanied by a report ("Royalty Report"), in the form prescribed in the
Manuals, itemizing the Gross Sales for the preceding Accounting Period as well
as any other reports as may be required by Licensor. Notwithstanding the
foregoing, Operator shall provide Licensor with such Gross Sales information on
the tenth (10th) day of each Accounting Period by electronic data communication,
facsimile transmission or, if either of the foregoing means is not available, by
telephone, or such other method Licensor may reasonably direct. Operator also
shall provide Licensor with a weekly Gross Sales report (covering the period
from Monday through Sunday), in the form prescribed in the Manuals, by Tuesday
of each week for the preceding week's Gross Sales by facsimile transmission,
telephone, data communication or such other method of delivery as Licensor may
reasonably direct.

                  (3) By executing this Agreement, Operator agrees that Licensor
has the right to withdraw funds from Operator's designated bank account each
Accounting Period by EFT in the amount of the royalty fee plus any other amounts
due to Licensor. With respect to royalty fees, provided such day is a Business
Day (and if not a Business Day, on the next succeeding Business Day), such
withdrawals shall be made on the tenth (10th) day after the end of each
Accounting Period for the amount of the royalty fee due based on Operator's
Gross Sales for the preceding Accounting Period, as evidenced by the Royalty
Report. If the Royalty Report has not been received and the royalty fee has not
been paid within the time period required by this Agreement, then Licensor may
process, in its sole discretion, an EFT for the royalty fee for the Accounting
Period in which the Royalty Report is not received or royalty fee paid. If the
Royalty Report is not received, the amount of the Accounting Period royalty fee
shall be based on, at Licensor's option, (a) information regarding Operator's
Gross Sales for the preceding Accounting Period obtained by Licensor in the
manner contemplated by Section VIII(E)(10) of this Agreement, (b) the weekly and
Accounting Period Gross Sales reports transmitted to Licensor by Operator
pursuant to Section V(B)(2), or (c) the most recent Royalty Report provided to
Licensor by Operator; provided that if a Royalty Report for the subject
Accounting Period is subsequently received and reflects (i) that the actual
amount of the royalty fee due was more than the amount of the EFT by Licensor,
then Licensor shall be entitled to withdraw additional funds representing the
amount of the difference from Operator's designated bank account by EFT; or (ii)
that the actual amount of the royalty due was less than the amount of the EFT by
Licensor, then Licensor shall credit the excess amount to the payment of
Operator's future royalty fee obligations. For any other monetary obligation not
paid when due, Licensor shall have the right to withdraw such amounts due five
(5) days after such amount becomes past due, provided such day is a Business Day
(and if not a Business Day, on the next succeeding Business Day). Operator
shall, upon execution of this Agreement or at any time thereafter at Licensor's
request, execute such documents or forms as Licensor determines are necessary
for Licensor to process EFTs from Operator's designated bank account for the
payments due hereunder, including Attachment E to this Agreement. Operator
agrees that it shall be responsible for (x) any EFT transfer fee or similar
charge imposed by the bank, and (y) should any EFT not be honored by Operator's
bank for any reason, for that payment plus any service charge applied by
Licensor and/or the bank. If royalty fees and other payments are not received
when due, interest may be charged by Licensor in accordance with Section V(B)(4)
below. Upon written notice by Licensor to Operator, Operator shall execute such
other documents that Licensor or Operator's bank may require to implement the
foregoing procedure.

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                  (4) Operator shall not be entitled to withhold payments due
Licensor under this Agreement on grounds of alleged nonperformance by Licensor
hereunder. Any payment or report not actually received by Licensor on or before
the applicable due date shall be deemed overdue. Time is of the essence with
respect to all payments to be made by Operator to Licensor. All unpaid
obligations under this Agreement shall bear interest from the date due until
paid at the lesser of (a) 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, substantial and responsible commercial borrowers, plus three percent
(3%), or (b) 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 in such
respect is herein provided for, or shall be adjudicated to be so provided in
this Agreement, the provisions of this paragraph shall govern and prevail, and
neither Operator nor its Controlling 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.

         C. For the purposes of determining the royalties to be paid hereunder,
"Gross Sales" shall mean all receipts (cash, cash equivalents or credit) or
revenues from sales from all business conducted upon or from the Restaurant
premises, whether evidenced by check, cash, credit, charge account, exchange or
otherwise, including, but not limited to, amounts received from the sale of
goods, wares and merchandise (including sales of food, beverages and tangible
property of every kind and nature, promotional or otherwise), from all services
performed from or at the Restaurant premises, and from all orders taken or
received at the Restaurant premises, regardless of where such orders are filled.
All proceeds from the sale by Operator of O'Charley's Gift Cards issued by
Licensor shall not be included in Gross Sales, however, the full value of any
O'Charley's Gift Card issued by Licensor once redeemed by Operator shall be
included within Gross Sales during the Accounting Period in which such
O'Charley's Gift Card is submitted to Licensor for redemption. Gross Sales shall
not be reduced by any deductions for cash shortages incurred in connection with
the transaction of business with customers, credit card company charges or
theft. Each charge or sale upon installment or credit shall be treated as a sale
for the full price in the Accounting Period during which such charge or sale
shall be first made, irrespective of the time when Operator shall receive
payment (whether full or partial) therefor.

                  (1) Gross Sales shall, however, expressly exclude the
following:

                           (a) receipts from the operation of any public
telephone installed in the Restaurant, and sales from vending or gaming machines
located at the Restaurant from which Operator derives no revenue;

                           (b) sums representing sales taxes, based upon present
or future laws of federal, state or local governments, collected directly from
customers by Operator in the operation of the Restaurant, and any other tax,
excise or duty charged to customers which is levied or assessed against Operator
by any federal, state, municipal or local authority, based on

                                       10

<PAGE>

sales of specific merchandise sold at or from the Restaurant, provided that such
taxes are actually transmitted to the appropriate taxing authority;

                           (c) tips or gratuities paid directly by Restaurant
customers to employees of Operator or paid to Operator and then turned over to
such employees by Operator in lieu of direct tips or gratuities;

                           (d) the sale of previously refunded or returned
merchandise if the sales of such merchandise shall have been previously included
in Gross Sales;

                           (e) proceeds from isolated sales of trade fixtures
not constituting any part of Operator's products and services offered at the
Restaurant nor having any material effect upon the ongoing operation of the
Restaurant;

                           (f) the full value of discounts generally provided to
employees for meals furnished as an incident to their employment; and

                           (g) the full value of any complimentary and
promotional food dispensed from the Restaurant to the extent such are dispensed
in accordance with Licensor's standards for such programs, as set forth in the
Manuals.

                  (2) In addition, Licensor may, from time to time, authorize
certain other items to be included or excluded from Gross Sales. Any such
permission may be revoked or withdraw at any time in writing by Licensor in its
discretion.

                  (3) Operator acknowledges that the listing of items or
transactions in this Section V(C) as constituting or giving rise to Gross Sales
does not constitute the grant of a license or other authorization for Operator
to provide or deliver any product or service not explicitly authorized elsewhere
under this Agreement.

         D. Operator shall pay such other fees or amounts described in this
Agreement.

         E. Operator acknowledges that the General Manager replacement fee in
Section VII(D) and the transfer fee in Section XV(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 VI
                             LICENSOR'S OBLIGATIONS

         Licensor agrees to provide the services described below with regard to
the Restaurant.

         A. Licensor shall loan to Operator one (1) set of confidential
operations manuals (which currently include the Real Estate Manual, the
Marketing and Recipe Manual, the Training and Operations Manual, the Human
Resources Manual, the New Store Opening Manual and the

                                       11

<PAGE>

Financial Manual) and such other manuals and written materials as Licensor shall
have developed for use in the Licensed Business (as the same may be revised by
Licensor from time to time) (collectively, the "Manuals"). Licensor may provide
the Manuals to Operator in electronic format.

         B. Licensor shall license to Operator certain computer software to be
used in the operation of the Restaurant pursuant to Article VIII. Licensor shall
also make available to Operator at a reasonable cost (as determined by Licensor)
any upgrades, enhancements or replacements to the software that are developed
from time to time by or on behalf of Licensor.

         C. Licensor shall visit the Restaurant and evaluate of the products
sold and services rendered therein from time to time as reasonably determined by
Licensor, as more fully described in Section VIII(E)(6).

         D. Licensor shall provide Operator with certain advertising and
promotional materials and information developed by Licensor from time to time
for use by Operator in marketing and conducting local advertising for the
Restaurant. Licensor shall have the right to review and approve or disapprove
all advertising and promotional materials that Operator proposes to use,
pursuant to Article IX.

         E. Licensor shall provide Operator with advice and written materials
concerning techniques of managing and operating the Restaurant from time to time
developed by Licensor and deemed by Licensor, in its sole discretion, to be
appropriate for use by Operator at the Restaurant, including new developments
and improvements in restaurant equipment and food products, source
specifications and the packaging and preparation thereof.

         F. From time to time at Licensor's discretion, Licensor may, at a
reasonable cost determined by Licensor, make available for resale to Operator's
customers certain merchandise identifying the System, such as T-shirts,
sweatshirts and caps.

         G. Licensor shall provide to Operator lists of approved suppliers as
described in Section VIII(D) from time to time as Licensor deems appropriate.

         H. Licensor shall conduct an initial training program for Operator's
Operating Principal (or designee), General Manager, Kitchen Manager and three
(3) selected Restaurant management personnel (or such other number of managers
specified in the Manuals) as well as other training programs in accordance with
the provisions of Section VII(E).

         I. Licensor shall provide on-site pre-opening and post-opening
assistance at the Restaurant in accordance with the provisions of Section
VII(E)(3) and the Manuals.

         J. Licensor shall establish and administer advertising funds and/or
advertising cooperatives and approval of Yellow Pages(TM) and/or other business
listing advertising at Licensor's discretion in accordance with Article IX.

                                       12

<PAGE>

                                   ARTICLE VII
        OPERATOR'S AGREEMENTS, REPRESENTATIONS, WARRANTIES AND COVENANTS

         A. Operator and each of the Controlling Principals covenant and agree
that each shall make all commercially reasonable efforts to operate the
Restaurant so as to achieve optimum sales.

         B. If Operator is a corporation, limited liability company, partnership
or other Entity, Operator and the Controlling Principals, as applicable, make
the following representations and warranties to Licensor:

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

                  (2) Operator 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.

                  (3) Operator's corporate charter, articles of organization and
operating agreement, or written partnership agreement shall at all times provide
that the activities of Operator are confined exclusively to the operation of the
Restaurant or other Restaurants under license from Licensor. Unless otherwise
consented to in writing by Licensor, Operator shall not use the Proprietary
Marks as part of its corporate or other legal name, and shall, in any event,
obtain Licensor's approval of such corporate or other legal name prior to
applying for or filing it with the applicable government authority.

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

                  (5) If Operator is a corporation, copies of Operator'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 Operator is a
limited liability company, copies of Operator's articles of organization,
operating agreement, any buy-sell agreements or other documents restricting the
sale or transfer of interests in the limited liability company, and any other
governing documents and any amendments thereto shall have been furnished to
Licensor prior to the execution of this Agreement; or, if Operator is a
partnership, copies of Operator'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 be furnished to Licensor prior to the execution of this Agreement.
Operator 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,

                                       13

<PAGE>

members or partners, if such approval or consent is required by statute or by
Operator's Articles of Incorporation, Bylaws, articles of organization,
operating agreement, written partnership agreement or other governing documents,
as applicable.

                  (6) If Operator is a corporation, limited liability company or
partnership, the ownership interests in Operator are accurately and completely
described in Attachment B. Further, if Operator is a corporation, Operator shall
maintain at all times a current list of all owners of record and all beneficial
owners of any class of voting securities in Operator, if Operator is a limited
liability company, Operator shall maintain at all times a current list of all
owners of an interest in the limited liability company, or, if Operator is a
partnership, Operator shall maintain at all times a current list of all owners
of an interest in the partnership. Operator 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.

                  (7) If Operator is a corporation, Operator 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 VII(B)(7) shall not apply to the transfer of
equity securities of a Publicly-Held Entity that is otherwise approved to be the
Operator. If Operator 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
Operator 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.

                  (8) Operator and each of the Controlling Principals have
provided Licensor with the most recent audited financial statements of Operator
and each of the Controlling Principals. Such financial statements present fairly
the financial position of Operator and each of the Controlling Principals, as
applicable, at the dates indicated therein and with respect to Operator, the
results of its operations, its cash flow and owners' equity for the years then
ended. Operator 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 Operator's treasurer or chief financial officer
(or by the applicable Controlling Principal), and shall have been prepared in
conformity with generally accepted accounting principles ("GAAP") consistently
applied to all applicable periods involved. 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 Operator
or the Controlling Principals or otherwise appropriately disclosed in the notes
thereto.

                  (9) No Principal may pledge, transfer or hypothecate its
interest in Operator except in accordance to this Agreement. 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, Operator shall

                                       14

<PAGE>

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.

                  (10) Each Principal, except the 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 (see Sections XI(B)(2) and XI(C)(4)). The Controlling Principals
shall jointly and severally guarantee Operator's performance of all of
Operator'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 F, and do otherwise
bind themselves to the terms of this Agreement as stated herein.

                  (11) Operator and the Controlling Principals acknowledge and
agree, jointly and severally, that the representations, warranties, covenants
and agreements set forth above in Sections VII(B)(l)-(10) are continuing
obligations of Operator and the Controlling Principals, as applicable. Operator
and each Controlling Principal will cooperate with Licensor in any efforts made
by Licensor to verify compliance with such representations, warranties,
covenants and agreements.

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

                  (1) The Operating Principal must at Operating Principal's
option, either serve as the General Manager or, subject to the approval of
Licensor, designate another individual to serve as the General Manager of the
Restaurant. Any individual designated by the Operating Principal to serve as the
General Manager also may, subject to Licensor's consent, perform the duties and
obligations of the Operating Principal, provided, that the Operating Principal
shall take all necessary action to ensure that such designee conducts and
fulfills all of such obligations in accordance with the terms of this Agreement
and that the Operating Principal shall remain fully responsible for such
performance.

                  (2) The Operating Principal must maintain a direct ownership
interest in Operator satisfactory to Licensor. Except as may otherwise be
provided in this Agreement, the Operating Principal's interest in Operator shall
be and shall remain free of any pledge, mortgage, hypothecation, lien, charge,
encumbrance, voting agreement, proxy, security interest or purchase right or
options. The Operating Principal shall execute this Agreement as one of the
Controlling Principals, and shall be individually, jointly and severally with
the Operator and the other Controlling Principals, bound by all obligations of
Operator, the Operating Principal and the Controlling Principals hereunder.

                  (3) Operator and the Operating Principal (or his designee, as
applicable) shall devote their full time and best efforts to the supervision and
conduct of the Licensed Business.

                                       15

<PAGE>

                  (4) The Operating Principal (or his designee, as applicable)
shall meet Licensor's standards and criteria for such individual, as set forth
in the Manuals, as set forth herein or as otherwise communicated by Licensor
from time to time.

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

         D. Operator shall designate and retain at all times a general manager
(the "General Manager") and a kitchen manager (the "Kitchen Manager") and such
other personnel as Licensor, in its sole discretion, deems necessary for the
operation and management of the Restaurant. Operator shall designate its General
Manager and Kitchen Manager at least ninety (90) days prior to the Opening Date,
or by such later date as Licensor may determine. The General Manager shall be
responsible for the daily operation of the Restaurant. The Kitchen Manager shall
be responsible for the daily operation of the Restaurant's kitchen. The General
Manager and Kitchen Manager may, but need not, each be one of the Controlling
Principals (including the Operating Principal). The General Manager and Kitchen
Manager shall, during the entire period they serve as the General Manager and
Kitchen Manager, respectively, meet the following qualifications, as applicable:

                  (1) The General Manager and the Kitchen Manager shall each
satisfy Licensor's educational and business experience criteria as set forth in
the Manuals, as set forth herein or as otherwise communicated by Licensor from
time to time.

                  (2) The General Manager shall devote his full time and best
efforts to the supervision and management of the Restaurant and the Kitchen
Manager shall devote his full time and best efforts to the supervision and
management of the Restaurant's kitchen.

                  (3) The General Manager and Kitchen Manager shall be
individuals acceptable to and approved by Licensor.

                  (4) The General Manager and Kitchen Manager shall satisfy the
training requirements set forth in Section VII(E). If during the term of this
Agreement the General Manager or the Kitchen Manager is not able to continue to
serve in such capacity or no longer qualifies to act as such in accordance with
this Section, Operator shall promptly notify Licensor and shall designate a
replacement within sixty (60) days after the General Manager or the Kitchen
Manager ceases to serve, such replacement being subject to the same
qualifications and approvals as listed above. Operator shall provide for interim
management of the Restaurant until such replacement is so designated, such
interim management to be conducted in accordance with the terms of this
Agreement. In the event that Operator fails to designate a replacement General
Manager within such sixty (60) day time period Licensor may, in its sole
discretion, designate an individual to serve as General Manager of the
Restaurant. If Licensor designates such a

                                       16

<PAGE>

replacement General Manager, Operator shall pay to Licensor a fee of Six
Thousand Five Hundred Dollars ($6,500) plus any expenses incurred by Licensor as
a result of having designated a replacement General Manager (including, but not
limited to, such replacement General Manager's per diem, travel, lodging and
meals) for each month such replacement General Manager operates the Restaurant.

         E. Operator agrees that it is necessary to the continued operation of
the System and the Restaurant that Operator, the Operating Principal, the
General Manager, the Kitchen Manager and other personnel receive such training
as Licensor may require, and accordingly agrees as follows:

                  (1)      (a) Licensor shall provide to Operator, at no
additional cost for the first three (3) Restaurants that Operator or an
Affiliate of Operator (it being the intention that the 3-Restaurant maximum on
free training be used up by the first 3 Restaurants developed within an
Affiliated group) develops, the initial training for Operator's Operating
Principal (or his designee), General Manager, the Kitchen Manager and three (3)
additional managers selected by Operator (the "Secondary Managers"), or such
other number of managers as specified in the Manuals. The Operating Principal
(or his designee), the General Manager, the Kitchen Manager and the Secondary
Managers shall attend, and complete to Licensor's satisfaction, Licensor's
initial training program. Such persons must complete the initial training not
less than two (2) but no more than five (5) weeks prior to the date the
Restaurant commences operations as an O'Charley's restaurant. Exactly when
during this time period an individual has to complete the initial training is
outlined in the Manuals and will vary depending on whether the individual is an
Operating Principal, a General Manager, a Kitchen Manager or a Secondary
Manager. A portion of the initial training must be conducted in Licensor's home
office, which is currently in Nashville, Tennessee and the remaining portion
must be conducted on-site at an O'Charley's restaurant. All on-site training
must be conducted in an O'Charley's restaurant approved by Licensor. If Licensor
has not approved any restaurant operated by Operator for training, then the
training of the Operating Principal (or his designee), the General Manager, the
Kitchen Manager and the Secondary Managers must be conducted in an approved
restaurant that is operated by Licensor or by another licensee of Licensor.
Licensor shall determine, in its sole discretion, whether the Operating
Principal (or his designee), the General Manager, the Kitchen Manager and the
Secondary Managers have satisfactorily completed the initial training. Licensor
shall provide instructors and training materials for the initial training of
such persons at no additional charge to Operator.

                           (b) If the initial training program is not
satisfactorily completed by the Operating Principal (or his designee), the
General Manager, the Kitchen Manager or any Secondary Manager or if Licensor in
its reasonable business judgment based upon the performance of the Operating
Principal (or his designee), the General Manager, the Kitchen Manager or any
Secondary Manager determines that the training program cannot be satisfactorily
completed by such person(s), Operator shall designate a replacement(s) to
satisfactorily complete such training. Operator shall be responsible for any and
all expenses incurred by Operator, the Operating Principal (or his designee),
the General Manager, the Kitchen Manager and the Secondary Managers in
connection with any initial training program, including, without limitation,
costs of travel, lodging, meals, wages and benefits.

                                       17

<PAGE>

                  (2) The Operating Principal, the General Manager, the Kitchen
Manager and the Secondary Managers and such other Restaurant personnel as
Licensor shall designate shall attend such additional training programs and
seminars as Licensor may offer from time to time. For all such programs and
seminars, Licensor will provide the instructors and training materials. However,
Licensor reserves the right to impose a reasonable fee determined by Licensor
for such additional training programs and seminars. Operator shall be
responsible for any and all expenses incurred by Operator, the Operating
Principal, the General Manager, the Kitchen Manager, the Secondary Managers and
any other Restaurant personnel in connection with such additional training,
including, without limitation, costs of travel, lodging, meals, wages and
benefits.

                  (3)      (a) If Operator is developing a single Restaurant or
if Operator is developing the first or second Restaurant under a Development
Agreement, Licensor shall provide Operator with an opening team composed of two
(2) store opening coordinators and up to sixteen (16) trainers, as determined by
Licensor.

                           (b) If Operator is developing the third Restaurant
under a Development Agreement, Licensor shall provide Operator with an opening
team composed of two (2) store opening coordinators and up to eight (8)
trainers; provided, however, if Licensor determines, in Licensor's sole
discretion, that Operator requires additional trainers, Operator shall supply
such additional certified trainers (at Operator's expense) up to an additional
eight (8) trainers.

                           (c) If Operator is developing the fourth or any
subsequent Restaurant under a Development Agreement, Licensor shall provide
Operator with an opening team composed of up to two (2) store opening
coordinators, unless Licensor determines, in its sole discretion, that Operator
does not require Opening Team assistance.

                           (d) Any store opening coordinators or trainers
provided by Licensor to Operator shall be collectively referred to as the
("Opening Team"). The Opening Team will provide on-site pre-opening, opening and
post-opening training supervision assistance to Operator for a period of time
ranging from three (3) to six (6) weeks. Licensor reserves the right to require
such Opening Team to remain on-site longer than six (6) weeks, in its sole
discretion. The number of Opening Team members and the time period in which the
Opening Team will provide assistance shall be determined by Licensor, in its
sole discretion, based upon Licensor's assessment of Operator's operational
requirements. With respect to the Opening Team assistance described above and
any such assistance provided to a replacement O'Charley's Restaurant established
by Operator, Operator shall pay to Licensor the per diem fee then being charged
to operators generally for opening team assistance, including payment of any
expenses incurred by such Opening Team, such as costs of travel and lodging.

                  (4) Upon the reasonable request of Operator, and as Licensor
shall deem appropriate, Licensor shall, during the term hereof, subject to the
availability of personnel, provide Operator with additional trained
representatives who shall provide on-site remedial training to Operator's
Restaurant personnel. Operator shall pay the per diem fee then being charged to
operators under the System for the services of such trained representatives,
plus their costs of travel, lodging and meals.

                                       18

<PAGE>

                  F. Operator and the Controlling Principals understand that
compliance by all operators and developers 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 operators and
developers 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, Operator and
the Controlling Principals agree that if during the term of this Agreement,
Operator 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
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 Operator 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 Operator 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 Operator, 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, Operator, 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 VII(F).
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 Operator or any Controlling Principal in any capacity,
and Licensor shall not be liable for any losses, of any nature or kind, incurred
by Operator or any Controlling Principal in connection therewith.

                  G. Operator shall comply with all requirements of federal,
state and local laws, rules, regulations and orders. Licensor's Manuals may
encompass some of Licensor's human relations and employment policies and
procedures. Operator is free to adopt Licensor's employment policies if Operator
so chooses. However, Operator is not required to adopt Licensor's

                                       19

<PAGE>

employment policies and Operator may develop and implement its own employment
policies so long as such policies comply with all federal, state and local laws,
regulations and orders.

         H. Operator shall obtain and maintain all appropriate licenses, permits
and certifications for the operation of the Restaurant, including licenses and
permits to sell alcoholic beverages in the Restaurant.

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

         J. Operator and the 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 VIII
                              RESTAURANT OPERATIONS

         A. Operator understands the importance of maintaining uniformity among
all of the O'Charley's restaurants and the importance of complying with all of
Licensor's standards and specifications relating to the operation of the
Restaurant.

         B. Operator shall maintain the Restaurant in a high degree of
sanitation, repair and condition, and in connection therewith shall make such
additions, alterations, repairs and replacements thereto (but no others without
Licensor's prior written consent) as may be required for that purpose or as may
be reasonably requested by Licensor, including, without limitation, such
periodic repainting or replacement of obsolete signs, neons, furnishings,
awnings, equipment (including, but not limited to, electronic cash register or
computer hardware and software systems, including updates or upgrades), and
decor as Licensor may reasonably direct, at Operator's cost and expense.
Operator shall also obtain, at its expense, any new or additional equipment
(including electronic cash register or computer hardware and software systems,
including updates and upgrades), fixtures, supplies and other products and
materials which may be reasonably required by Licensor for Operator to offer and
sell new menu items from the Restaurant or to provide the Restaurant's services
by alternative means, such as through carry-out or such other manner specified
by Licensor. Except as may be expressly provided in the Manuals, no alterations
or improvements or changes of any kind in design, equipment, signs, neons,
interior or exterior decor items, fixtures, awnings or furnishings shall be made
in or about the Restaurant or its premises without the prior written approval of
Licensor.

         C. To assure the continued success of the Restaurant, Operator shall,
upon the request of Licensor, make other improvements to modernize the
Restaurant premises, equipment (including, without limitation, electronic cash
register or computer hardware and software systems, including any updates and
upgrades), signs, neons, interior and exterior decor items, fixtures, awnings,
furnishings, supplies and other products and materials required for the
operation of the Restaurant, to Licensor's then-current standards and
specifications. Operator agrees that it will make such capital improvements or
modifications described in this Section VIII(C) at the earlier of: (i) seven (7)
years after the execution of this Agreement by Licensor; or

                                       20

<PAGE>

(ii) such time that a majority of the O'Charley's restaurants then operated by
Licensor or its Affiliates have made or are utilizing best efforts to make such
improvements or modifications.

         D. Operator shall comply with all of Licensor's standards and
specifications (including brand specifications) relating to the purchase of all
food and beverage items (including soft drinks), ingredients, supplies,
materials, signs, neons, fixtures, awnings, furnishings, equipment (including
electronic cash register or computer hardware and software systems, including
any updates or upgrades) and other products used or offered for sale at the
Restaurant. Except as provided in Section VIII(F) and Section VIII(G), Operator
shall obtain such items from suppliers (including manufacturers, distributors
and other sources) who continue to demonstrate the ability to meet Licensor's
then-current standards and specifications for food and beverage items,
ingredients, supplies, materials, signs, neons, fixtures, awnings, furnishings,
equipment and other items used or offered for sale at O'Charley's restaurants
and who possess adequate quality controls and capacity to supply Operator's
needs promptly and reliably and who have been approved in writing by Licensor
prior to any purchases by Operator from any such supplier and who have not
thereafter been disapproved by Licensor. If Operator desires to purchase, lease
or use any food and beverage items (including soft drinks), ingredients,
supplies, materials, signs, neons, fixtures, awnings, furnishings, equipment
(including electronic cash register or computer hardware and software systems,
including any updates or upgrades) and other products used or offered for sale
at the Restaurant from an unapproved supplier, Operator shall submit to Licensor
a written request for such approval, or shall request the supplier itself to do
so in accordance with the Manuals. Operator shall not purchase or lease from any
supplier until and unless such supplier has been approved in writing by
Licensor. Licensor shall have the right to require that its representatives be
permitted to inspect the supplier's facilities, and that samples from the
supplier be delivered, either to Licensor or to an independent laboratory
designated by Licensor for testing. Licensor reserves the right to charge a
reasonable fee associated with approving a supplier. In addition, all cost
associated with such inspections and tests (including Licensor's out-of-pocket
expenses) shall be paid by Operator or the proposed supplier. Licensor reserves
the right, at its option, to re-inspect from time to time the facilities and
products of any such approved supplier and to revoke its approval upon the,
supplier's failure to continue to meet any of Licensor's then-current criteria.
Nothing in the foregoing shall be construed to require Licensor to approve any
particular supplier.

         E. To ensure that the highest degree of quality and service is
maintained, Operator shall operate the Restaurant in strict conformity with such
methods, standards and specifications of Licensor set forth in the Manuals and
as may from time to time otherwise be prescribed by Licensor in writing. In
particular, Operator also agrees to:

                  (1) sell or offer for sale all menu items, products and
services required by Licensor and in the manner and style prescribed by
Licensor, including, but not limited to, dining-in and carry-out, as expressly
authorized by Licensor in the Manuals or otherwise in writing, to operate the
Restaurant only during the hours and on the days Licensor specifies in the
Manuals or otherwise in writing, to comply with Licensor's policies and
procedures for selling and redeeming O'Charley's Gift Cards as set forth in the
Manuals and to execute such documents or instruments that Licensor may deem
necessary to facilitate the providing of such services;

                                       21

<PAGE>

                  (2) sell and offer for sale only the menu items, products and
services that have been expressly approved for sale in writing by Licensor, to
refrain from deviating from Licensor's standards and specifications without
Licensor's prior written consent; and to discontinue selling and offering for
sale any menu items, products or services, or providing such menu items,
products or services in any manner or through any method of distribution, which
Licensor may, in its sole discretion, disapprove in writing at any time;

                  (3) maintain in sufficient supply and to use and sell at all
times only such food and beverage items (including soft drinks), ingredients,
products, materials, supplies and paper goods that conform to Licensor's
standards and specifications (including products specified by name, brand or
other approved source); to prepare all menu items in accordance with Licensor's
recipes and procedures for preparation contained in the Manuals or other written
directives, including, but not limited to, the prescribed measurements of
ingredients; and to refrain from deviating from Licensor's standards and
specifications by the use or offer of non-conforming items or differing amounts
of any items, without Licensor's prior written consent;

                  (4) permit Licensor or its agents, at any reasonable time, to
remove a reasonable number of samples of food or non-food items from Operator's
inventory, or from the Restaurant premises, without payment therefor in amounts
reasonably necessary for testing by Licensor or an independent laboratory to
determine whether such samples meet Licensor's then-current standards and
specifications, and to bear the cost of such testing if the supplier of the item
has not previously been approved by Licensor or if the sample fails to conform
with Licensor's specifications;

                  (5) purchase or lease and install, and maintain at Operator's
expense all fixtures, awnings, furnishings, equipment (including electronic cash
register or computer hardware and software systems, including updates and
upgrades), decor items, signs, neons, delivery vehicles (if applicable), and
related items as Licensor may reasonably direct from time to time in the Manuals
or otherwise in writing; refrain from installing or permitting to be installed
on or about the Restaurant premises, without Licensor's prior written consent,
any fixtures, awnings, furnishings, equipment, delivery vehicles (if
applicable), decor items, signs, neons, games, vending machines or other items
not previously approved as meeting Licensor's standards and specifications; and
refrain from leasing any of the property described above from a third party
without first obtaining Licensor's written approval, which shall be conditioned
upon, among other things, such lease containing a provision which permits any
interest of Operator in the lease to be assigned to Licensor upon the
termination or expiration of this Agreement and which prohibits the lessor from
imposing an assignment or related fee upon Licensor in connection with such
assignment;

                  (6) grant Licensor and its agents the right to enter upon the
Restaurant premises and any Restaurant delivery motor vehicles (if applicable)
at any time for the purpose of conducting inspections; to cooperate with
Licensor's representatives in such inspections by rendering such assistance as
they may reasonably request; take such steps, upon notice from Licensor or its
agents and without limiting Licensor's other rights under this Agreement, as may
be necessary to correct immediately any deficiencies detected during any such
inspection; and permit Licensor to correct such deficiencies and charge a
reasonable fee, as determined by

                                       22

<PAGE>

Licensor, for Licensor's expenses in so acting, should Operator for any reason
fail to correct such deficiencies within a reasonable time as determined by
Licensor;

                  (7) execute and maintain a high level of customer service, to
maintain a competent, conscientious and well trained staff (including hiring at
least the minimum number of hourly staff outlined in the Manuals) and take such
steps as are necessary to ensure that its employees preserve good customer
relations and comply with such dress code, all as Licensor may prescribe in the
Manuals or otherwise in writing, as well as comply with all federal, state and
local laws, regulations and orders;

                  (8) maintain in sufficient supply and prominently display and
make available such customer satisfaction forms as Licensor may require and to
forward all completed customer satisfaction forms to Licensor or to Licensor's
designee at such times as Licensor may direct;

                  (9) play in the Restaurant such recorded or programmed music
as Licensor may from time to time require in the Manuals or otherwise in writing
and to obtain such copyright licenses as may be necessary to authorize the
playing of such recorded music;

                  (10) install and maintain such equipment, make such
arrangements and follow such procedures as Licensor may require in the Manuals
or otherwise in writing (including, without limitation, the establishment and
maintenance of Internet, intranet or extranet access or such other means of
electronic communication, as specified by Licensor from time to time) to permit
Licensor to access, download and retrieve electronically, by telecommunication
or other designated method, any information stored in Operator's electronic cash
registers or on Operator's computer systems, including, without limitation,
information concerning the Gross Sales of the Restaurant; permit Licensor to
upload and for Operator to receive and download information from Licensor;
afford Licensor access to such information at the times and in the manner that
Licensor may specify from time to time; permit Licensor to assess Operator a
reasonable monetary charge for failure to make such information accessible,
unless such failure is not the fault of Operator; and refrain from establishing
any website or listing on the Internet or World Wide Web without the express
written consent of Licensor.

                  (11) pay to Licensor by EFT its then-current fee for providing
support (including the cost of any help desk support, if such is provided by
Licensor and any system maintenance fee) for any electronic cash register or
computer system on the tenth (10th) day of each Accounting Period during the
term of this Agreement, which fee shall be prorated for any partial period;
provided, however, that Licensor reserves the right to change the amount of such
fees, the billing cycle for such fees and/or the time period for which these
fees are charged in January of each calendar year, and will provide to Operator
thirty (30) day's prior written notice of any such change;

                  (12) from time to time, at Operator's option, request Licensor
to make individual changes or alterations (as provided in the Manuals) in the
suggested retail pricing information and other information stored and provided
through the electronic cash register or computer system for the Restaurant, in
which case Operator shall pay Licensor's reasonable then-current fees and
charges for making such changes or alterations to the electronic cash register
or computer system; and

                                       23

<PAGE>

                  (13) permit, at least three (3) times during each Accounting
Period and at such other times as Operator may request, Licensor or Licensor's
agents to enter the Restaurant's premises and conduct, at Operator's expense, an
evaluation report evaluating the atmosphere, cleanliness, service, hospitality
and food of the Restaurant.

         F. Operator shall enter into a software license agreement with Licensor
in substantially the form attached hereto as Attachment D for the license of
certain proprietary computer software provided by Licensor for the operation of
the Restaurant. Licensor retains the right to require Operator to enter into a
separate license agreement for the Operator's use of the Proprietary Marks in
any website or Internet postings or marketing.

         G. Operator acknowledges and agrees that Licensor has and may continue
to develop for use in the System certain products, including products which are
prepared from highly confidential secret recipes and which are trade secrets of
Licensor. Because of the importance of quality and uniformity of production and
the significance of such products in the System, it is to the mutual benefit of
the parties that Licensor closely control the production and distribution of
such products. Accordingly, Operator agrees that Operator shall sell any such
products using only Licensor's secret recipe and other, proprietary products,
and shall purchase solely from Licensor or from a source designated by Licensor
all of Operator's requirements for such products. Operator further agrees to
purchase from Licensor for resale to Operator's customers certain promotional
merchandise identifying the System as Licensor shall require such as T-shirts,
sweatshirts and caps, in amounts sufficient to satisfy Operator's customer
demand.

         H. Operator shall require all advertising and promotional materials,
signs, decorations, paper goods (including menus and all forms and stationery
used in the Licensed Business), and other items which may be designated by
Licensor to bear the Proprietary Marks in the form, color, location and manner
prescribed by Licensor. Licensor must approve in writing and in advance the
content and design of Operator's website advertising or Internet postings or
marketing and such use must be in accordance with Licensor's then current
policies.

         I. Operator shall process and handle all consumer complaints connected
with or relating to the Restaurant, and shall notify Licensor by telephone and
in writing within forty-eight (48) hours of all of the following complaints: (1)
food related illnesses; (2) safety or health violations; (3) claims exceeding
One Thousand Dollars ($1,000.00); (4) dram shop violations; (5) liquor license
violations; and (6) any other material claims against or losses suffered by
Operator. Operator shall maintain for Licensor's inspection any inspection
reports affecting the Restaurant or equipment located in the Restaurant during
the term of this Agreement and for six (6) months after the expiration or
earlier termination hereof.

         J. Upon the execution of this Agreement or at any time thereafter,
Operator shall, at the option of Licensor, execute such forms and documents as
Licensor deems necessary to appoint Licensor its true and lawful
attorney-in-fact with full power and authority for the sole purpose of assigning
to Licensor all rights to: (1) the telephone numbers of the Restaurant and any
related and other business listings; and (2) all e-mail addresses, URLs, domain
names, Internet listings and Internet accounts related to the Restaurant upon
the termination or expiration of this Agreement as required under Section
XIX(M).

                                       24

<PAGE>

         K. Operator may submit a written request to Licensor requesting
authorization to provide delivery services from the Restaurant. Such written
request shall be in the form and manner specified in Manuals and shall include
Operator's name, the Restaurant location, a description of the proposed delivery
area and a description of the proposed delivery vehicle(s). Licensor, in its
sole discretion, may authorize Operator to provide Restaurant delivery services.
If Licensor so authorizes Operator, any vehicle used by Operator to deliver
Restaurant products and services to customers shall meet Licensor's standards
with respect to appearance and ability to satisfy the requirements imposed on
Operator hereunder and in the Manuals. Operator shall place such signs and decor
items on the vehicle as Licensor requires and shall at all times keep such
vehicle clean and in good working order. Operator shall not engage or utilize
any individual in the operation of a motor vehicle in connection with providing
services hereunder who is under the age of eighteen (18) years and who does not
possess a valid driver's license under the laws of the state in which Operator
provides such services. Operator shall require each such individual to comply
with all laws, regulations and rules of the road and to use due care and caution
in the operation and maintenance of motor vehicles. Except as noted above and in
the Manuals, Licensor does not set forth any standards or exercise control over
any motor vehicle utilized by Operator.

                                   ARTICLE IX
                          ADVERTISING AND RELATED FEES

         Recognizing the value of advertising and the importance of the
standardization of advertising programs to the furtherance of the goodwill and
public image of the System, the parties agree as follows:

         A. Licensor may from time to time develop and administer advertising
and sales promotion programs designed to promote and enhance the collective
success of all restaurants operating under the System. Operator shall
participate in all such advertising and sales promotion programs in accordance
with the terms and conditions established by Licensor for each program. In all
aspects of these programs, including, without limitation, the type, quantity,
timing, placement and choice of media, market areas and advertising agencies,
the standards and specifications established by Licensor shall be final and
binding upon Operator.

         B.       (1) Licensor shall establish and administer an advertising
production fund for the purpose of producing and creating advertising materials
for the System (the "Production Fund"). Operator agrees to contribute one
percent (1%) of each Accounting Period's Gross Sales to the Production Fund (the
"Production Fund Fee"), such Production Fund Fee to be paid by EFT in the manner
set forth in Section V(B). Operator agrees and acknowledges that Licensor shall
maintain and administer the Production Fund in Licensor's sole and absolute
discretion, including using the Production Fund Fee to purchase and pay for any
and all costs of maintaining, administering, directing and preparing advertising
(including, without limitation, the cost of preparing television, radio,
magazine, newspaper, direct mail and outdoor billboard advertising campaigns,
menus, public relations activities, employing advertising agencies to assist
therein, and all of Licensor's departmental costs for advertising that is
internally administered or prepared by Licensor).

                                       25

<PAGE>

                  (2) Operator agrees and acknowledges that the Production Fund
is established to create advertising materials which are intended to maximize
the general public recognition and acceptance of the Proprietary Marks and
enhance the collective success of all restaurants operating under the System.
The Production Fund Fees will be used for the development and creation of
advertising, but will not be used to pay for the actual placement of advertising
materials. Licensor shall, with respect to O'Charley's restaurants operated by
Licensor, contribute to the Production Fund generally on the same basis as
Operator contributes to the Production Fund. In administering the Production
Fund, Licensor and its designee undertake no obligation to make expenditures for
Operator which are equivalent or proportionate to Operator's contribution or to
ensure that any particular operator benefits directly or pro rata from the
creation of advertising. The Production Fund and its earnings shall not inure to
the benefit of Operator. The Production Fund is operated solely as a conduit for
collecting and expending the Production Fund Fees. Licensor shall prepare an
annual statement of the Production Fund's expenditures within one hundred twenty
(120) days of Licensor's fiscal year end. Such annual statement shall be made
available to Operator upon written request. Operator and the Controlling
Principals agree and acknowledge that Licensor has no fiduciary duty whatsoever
to Operator, or any other operators, or their respective controlling principals
with regard to the operation or administration of the Production Fund.

         C. In addition to the ongoing advertising contributions set forth
herein, Operator shall spend during each year throughout the term of this
Agreement, two percent (2%) of the Gross Sales of the Restaurant (the "Local
Advertising Expenditure") on local advertising for the Restaurant ("Local
Advertising"). Although the Local Advertising Expenditure is a yearly
requirement, each Accounting Period Operator is required to submit to Licensor
an advertising expenditure report accurately reflecting that Accounting Period's
Local Advertising expenditures at the same time as the report itemizing Gross
Sales described in Section V(B)(2). In addition to the restrictions set forth in
Section IX(I) below, costs and expenditures incurred by Operator in connection
with any of the following shall not be included in Operator's expenditures on
Local Advertising for purposes of this Section, unless approved in advance by
Licensor in writing:

                  (1) incentive programs for employees or agents of Operator,
including the cost of honoring any coupons distributed in connection with such
programs;

                  (2) research expenditures;

                  (3) food costs incurred in any promotion;

                  (4) salaries and expenses of any employees of Operator,
including salaries or expenses for attendance at advertising meeting or
activities;

                  (5) charitable, political or other contributions or donations;

                  (6) press parties or other expenses of publicity;

                  (7) in-store materials consisting of menus, fixtures or
equipment;

                  (8) seminar and educational costs and expenses of employees of
Operator;

                                       26

<PAGE>

                  (9) pre-opening procedures and grand opening promotions; and

                  (10) specialty items such as T-shirts, premiums, pins and
awards, unless such items are part of a market-wide advertising program and then
only to the extent that the cost of such items is not recovered by the
promotion.

         D. Operator agrees that Licensor shall have the right, in its sole
discretion, to designate any geographic area in which two (2) or more
O'Charley's restaurants are located as a region for purposes of establishing an
advertising cooperative (a "Cooperative"). If such a Cooperative is established,
the members of the Cooperative for any area shall, at a minimum, consist of all
full-service O'Charley's restaurants within that area. Each Cooperative shall be
organized and governed in a form and manner, and shall commence operation on a
date determined in advance by Licensor in its sole discretion. Each Cooperative
shall be organized for the exclusive purposes of administering advertising
programs and developing, subject to Licensor's approval pursuant to Section
IX(I), promotional materials for use by the members of the Cooperative in Local
Advertising. The approved advertising media for Cooperative advertising is
limited to television and radio. If at the time of the execution of this
Agreement a Cooperative has been established for a geographic area that
encompasses the Restaurant, or if any such Cooperative is established during the
term of this Agreement, Operator shall execute such documents as are required by
Licensor immediately upon the request of Licensor and shall become a member of
the Cooperative pursuant to the terms of those documents. Operator shall
participate in the Cooperative as follows:

                  (1) Operator shall contribute to the Cooperative such amounts
required by the documents governing the Cooperative; provided, however, Operator
will not be required to contribute more than two percent (2%) of each Accounting
Period's Gross Sales to the Cooperative unless, subject to Licensor's approval,
the members of the Cooperative agree to the payment of a larger fee (the
"Cooperative Fee").

                  (2) Operator shall submit to the Cooperative and to Licensor
such statements and reports as may be required by Licensor or by the
Cooperative. All contributions to the Cooperative shall be maintained and
administered in accordance with the documents governing the Cooperative. The
Cooperative shall be operated solely as a conduit for the collection and
expenditure of the Cooperative Fee for the purposes outlined above.

                  (3) No advertising or promotional plans or materials may be
used by the Cooperative or furnished to its members without the prior written
approval of Licensor. All such plans and materials shall be submitted to
Licensor in accordance with the procedure set forth in Section IX(I).

         E. Operator agrees that Licensor shall have the right, in its sole
discretion, to establish and administer a national and/or regional advertising
fund (the "National Fund"). If such a National Fund is established by Licensor,
Operator agrees to contribute up to two percent (2%) of each Accounting Period's
Gross Sales to the National Fund (the "National Fund Fee"), such National Fund
Fee to be paid by EFT in the manner set forth in Section V(B).

                                       27

<PAGE>

         F. If Licensor establishes a Cooperative under Section IX(D) applicable
to the Restaurant and/or a National Fund under Section IX(E), the total required
contribution by Operator to the Local Advertising Expenditure, the Cooperative
Fee (if applicable) and the National Fund Fee (if applicable) shall not exceed
three percent (3%) of the Restaurant's Gross Sales. However, if the sum of the
Local Advertising Expenditure, the Cooperative Fee (if applicable) and the
National Fund Fee (if applicable) when added together would exceed three percent
(3%) of the Restaurant's Gross Sales, then such advertising fees shall be
allocated and, where applicable, reduced as follows:

                  (1) the Local Advertising Expenditure shall be reduced to one
percent (1%) of the Restaurant's Gross Sales; and

                  (2) the remaining two percent (2%) of such advertising fees
shall be allocated among the Local Advertising Expenditure, the Cooperative Fee
(if applicable) and the National Fund Fee (if applicable) in such amounts and in
such proportions as Licensor, in Licensor's sole discretion, deems appropriate.

         G. Operator shall plan and carry out the pre-opening procedures in
accordance with the standards and specifications outlined in the Manuals. In
addition to the pre-opening procedures outlined in the Manuals, Licensor may
require Operator to plan and carry out a grand opening promotion relating to the
opening of the Restaurant in accordance with the Manuals. Any advertising items
and methods used by Operator in connection with such pre-opening procedures and
any required grand opening promotions must be approved by Licensor in accordance
with Section IX(I). Any such amount paid by Operator for the initial pre-opening
procedures and any required grand opening promotions shall not be credited
toward any other obligation of Operator in this Article IX.

         H. Operator shall also pay its pro rata share of the cost of Yellow
Pages(TM) and/or other business listing advertising placed by Licensor on behalf
of all O'Charley's restaurants in the Restaurant's local market area. If
Operator operates the only O'Charley's restaurant under the System in the local
market area, Operator shall be responsible for full payment of the Yellow
Pages(TM) advertising and/or other business listing costs, unless Licensor
determines, in its sole discretion, that placement of Yellow Pages(TM) and/or
other business listing advertising for such local market area is not
economically justified. Any amount paid by Operator for such Yellow Pages(TM)
and/or other business listing advertising may be applied by Operator toward
satisfaction of its Local Advertising requirement.

         I.       (1) Nothing in the foregoing sections shall be deemed to
prohibit Operator from making additional expenditures for local advertising. All
of Operator's advertising and promotional activities shall utilize Approved
Advertising Media. "Approved Advertising Media" are limited to the following:

                           (a) newspapers, magazines and other such periodicals;

                           (b) radio and television;

                           (c) outdoor advertising by signs displayed on
billboards or buildings;

                                       28

<PAGE>

                           (d) handbills, flyers, door-hangers and direct mail;

                           (e) Internet advertising;

                           (f) Yellow Pages(TM) advertising; and

                           (g) such other media which Licensor approves in
writing.

In the event Operator wants to use a form of advertising medium not set forth
above, Operator shall submit a description of such medium and advertising to
Licensor. Licensor shall notify Operator whether it approves the use of such
medium within thirty (30) days of Operator's request. Failure by Licensor to so
notify Operator within that period shall be deemed to constitute Licensor's
approval of such request unless such advertising medium is in violation of this
Section IX(I). Guidelines for advertising are contained in the Manuals.

                  (2) All advertising copy and other materials employed by
Operator in advertising shall be in strict accordance and conformity with the
standards, formats and specimens contained in the Manuals and shall receive the
prior written approval of Licensor. In the event Operator wishes to deviate from
the materials contained in the Manuals, Operator shall submit, in each instance,
the proposed advertising copy and materials to Licensor for approval in advance
of publication. Licensor shall notify Operator in writing, within thirty (30)
days of such submission, whether Licensor disapproves of such advertising copy
and materials. Failure by Licensor to so notify Operator within that period
shall be deemed to constitute Licensor's approval of such advertising copy and
materials unless, such advertising copy or materials is in violation of this
Section IX(I). In no event shall Operator's advertising contain any statement or
material which may be considered:

                           (a) in bad taste or offensive to the public or to any
group of persons;

                           (b) defamatory of any person or an attack on any
competitor;

                           (c) to infringe upon the use, without permission, of
any other person's trade name, trademark, trade dress, service mark or
identification; or

                           (d) inconsistent with the public image of Licensor or
the System.

         J. In reviewing whether or not to establish a Cooperative and/or a
National Fund and any fees applicable thereto, Licensor shall endeavor to, but
shall not be liable for any omission to, consider such factors as media costs,
available marketing resources, population changes, changes in market conditions,
the degree of market penetration of the System, the level of advertising
expenditures by O'Charley's restaurants operated by Licensor or its Affiliates,
advertising expenditures by competitors of the System, as well as such other
factors as Licensor deems relevant.

         K. With respect to the offer and sale of all menu and beverage items
and other products and services, Licensor may from time to time offer guidance
concerning what it believes to be the optimum selling price for such goods,
products and services. In addition, Licensor may from time to time establish
maximum prices for such goods, products and services.

                                       29

<PAGE>

Such maximum prices, or the methods for determining such maximum prices, shall
be outlined in the Manuals from time to time. Except for maximum prices Licensor
establishes, Operator shall have the right to offer and sell its goods, products
and services at any prices Operator may determine, and shall in no way be bound
by any price which may be recommended or suggested by Licensor. Operator may not
sell the goods, products and services above any maximum prices for such goods,
products or services as may be outlined, from time to time, in the Manuals.
Operator shall not exceed the maximum price established by Licensor, but
Operator at all times shall remain free to charge any price below the maximum
price established by Licensor. Operator shall execute any instruments or other
writings required by Licensor to facilitate the provision of such goods,
products and services. If Operator elects to sell any or all of its goods,
products or services at any price recommended by Licensor, Operator acknowledges
that Licensor has made no guarantee or warranty that offering such goods,
products or services at the recommended price will enhance Operator's sales or
profits.

                                    ARTICLE X
                                PROPRIETARY MARKS

         A. Licensor grants Operator the right to use the Proprietary Marks
during the term of this Agreement in accordance with the System and its related
standards and specifications.

         B. Operator expressly understands and acknowledges the following:

                  (1) O'Charley's Management Company, Inc., a Tennessee
corporation and wholly owned subsidiary of Licensor ("OMC"), is the owner of all
right, title and interest in and to the Proprietary Marks and the goodwill
associated with and symbolized by them. OMC has granted to Licensor an exclusive
license to use and sublicense the Proprietary Marks.

                  (2) Neither Operator nor the Controlling Principals shall take
any action that would prejudice or interfere with the validity of OMC's or
Licensor's rights with respect to the Proprietary Marks. Nothing in this
Agreement shall give the Operator any right, title or interest in or to any of
the Proprietary Marks or to any of OMC's or Licensor's service marks,
trademarks, trade names, trade dress, logos, copyrights or proprietary
materials, except the right to use the Proprietary Marks and the System in
accordance with the terms and conditions of this Agreement for the operation of
the Restaurant and only at or from its accepted Location or in approved
advertising related to the Restaurant. Operator shall have no right to use the
Proprietary Marks in any manner that has not been expressly authorized by
Licensor in writing (including, any use of, or association with, the Proprietary
Marks and any website, URL or other listing or use on the Internet).

                  (3) Operator understands and agrees that any and all goodwill
arising from Operator's use of the Proprietary Marks and the System shall inure
solely and exclusively to the benefit of OMC and Licensor, and upon expiration
or termination of this Agreement and the license herein granted, no monetary
amount shall be assigned as attributable to any goodwill associated with
Operator's use of the Proprietary Marks.

                                       30

<PAGE>

                  (4) Operator shall not contest the validity of OMC's or
Licensor's interest in the Proprietary Marks or assist others to contest the
validity of OMC's or Licensor's interest in the Proprietary Marks.

                  (5) Operator acknowledges that any unauthorized use of the
Proprietary Marks shall constitute an infringement of OMC's and Licensor's
rights in the Proprietary Marks. Operator agrees that it shall provide Licensor
with all assignments, affidavits, documents, information and assistance Licensor
reasonably requests to fully vest in OMC and Licensor all such rights, title and
interest in and to the Proprietary Marks, including all such items as are
reasonably requested by OMC or Licensor to register, maintain and enforce such
rights in the Proprietary Marks.

                  (6) OMC and Licensor reserve the right to substitute different
Proprietary Marks for use in identifying the System and the Restaurant if the
current Proprietary Marks no longer can be used, or if OMC or Licensor, in their
sole discretion, determine that substitution of different Proprietary Marks will
be beneficial to the System. In such event OMC or Licensor may require Operator,
at Operator's expense, to discontinue or modify Operator's use of any of the
Proprietary Marks or to use one or more additional or substitute Proprietary
Marks.

         C. With respect to Operator's licensed use of the Proprietary Marks
pursuant to this Agreement, Operator further agrees as follows:

                  (1) Unless otherwise authorized or required by Licensor,
Operator shall operate and advertise the Restaurant only under the name
"O'Charley's" without prefix or suffix. Operator shall not use the Proprietary
Marks as part of its corporate or other legal name, and shall obtain Licensor's
approval of such corporate or other legal name prior to applying for or filing
it with the applicable government authority.

                  (2) During the term of this Agreement and any renewal hereof,
Operator shall identify itself as the owner of the Restaurant and an operator of
Licensor in conjunction with any use of the Proprietary Marks, including, but
not limited to, uses on invoices, order forms, receipts and contracts, as well
as the display of a notice in such content and form and at such conspicuous
locations on the premises of the Restaurant or any Restaurant delivery vehicle
(if applicable) as Licensor may designate in writing.

                  (3) Operator shall not use the Proprietary Marks to incur any
obligation or indebtedness on behalf of OMC, Licensor or any of their
Affiliates.

                  (4) Operator shall comply with OMC's or Licensor's
instructions in filing and maintaining the requisite trade name or fictitious
name registrations, and shall execute any documents deemed necessary by OMC or
Licensor or their counsel to obtain protection of the Proprietary Marks or to
maintain their continued validity and enforceability.

         D. Operator shall notify Licensor immediately by telephone, and
thereafter in writing, of any alleged infringement of or challenge to Operator's
use of any Proprietary Mark, of any claim by any person of any rights in any
Proprietary Mark, and Operator and the Controlling Principals shall not
communicate with any person other than Licensor or any designated affiliate
thereof, their counsel and Operator's counsel in connection with any such

                                       31

<PAGE>

alleged infringement, challenge or claim. OMC and Licensor shall have complete
discretion to take such action as they deem appropriate in connection with the
foregoing, and the right to control exclusively, or to delegate control to any
of their Affiliates of, any settlement, litigation or Patent and Trademark
Office proceeding or any other proceeding arising out of any such alleged
infringement, challenge or claim or otherwise relating to any Proprietary Mark.
Operator agrees to execute any and all instruments and documents, render such
assistance, and do such acts or things as may, in the opinion of OMC or
Licensor, reasonably be necessary or advisable to protect and maintain the
interests of OMC and Licensor or any affiliate or any other franchisee in any
litigation or other proceeding or to otherwise protect and maintain the
interests of OMC or Licensor or any other interested parties in the Proprietary
Marks. Licensor will indemnify Operator against and reimburse Operator for all
costs (including court costs and attorneys' fees) and damages for which Operator
is held liable in any proceeding arising out of any claim that the Proprietary
Marks violate or infringe upon the intellectual property of any third party,
provided that the conduct of Operator and the Controlling Principals with
respect to such proceeding and use of the Proprietary Marks is in full
compliance with the terms of this Agreement.

         E. The right and license of the Proprietary Marks granted hereunder to
Operator is nonexclusive and Licensor thus has and retains certain rights in the
Proprietary Marks including, but not limited to, the following:

                  (1) to grant other licenses for use of the Proprietary Marks,
in addition to those licenses already granted to existing operators;

                  (2) to develop and establish other systems using the
Proprietary Marks or other names or marks and to grant licenses thereto without
providing any rights to Operator; and

                  (3) to engage, directly or indirectly, through its employees,
representatives, licensees, assigns, agents and others, at wholesale, retail or
otherwise, in (a) the production, distribution, license and sale of products and
services, and (b) the use in connection with such production, distribution and
sale, of the Proprietary Marks and any and all trademarks, trade names, service
marks, logos, insignia, slogans, emblems, symbols, designs and other identifying
characteristics as may be developed or used from time to time by Licensor.

                                   ARTICLE XI
                  CONFIDENTIALITY AND NON-COMPETITION COVENANTS

         A.       (1) To protect the reputation and goodwill of Licensor and to
maintain high standards of operation under Licensor's Proprietary Marks,
Operator shall conduct its business in accordance with the Manuals, other
written directives which Licensor may issue to Operator from time to time
whether or not such directives are included in the Manuals, and any other
manuals and materials created or approved for use in the operation of the
Licensed Business.

                  (2) Operator and the Controlling Principals shall at all times
treat the Manuals, any written directives of Licensor, and any other manuals and
materials, and the information contained therein, as confidential and shall
maintain such information as trade secrets and confidential in accordance with
this Article XI. Operator and the Controlling Principals shall use all
reasonable efforts to maintain this information as secret and confidential,

                                       32

<PAGE>

and Operator and the Controlling Principals shall divulge and make such
materials available only to such of Operator's employees as must have access to
it in order to operate the Restaurant, or to such other persons authorized by
Licensor in writing. Operator and the Controlling Principals shall not at any
time copy, duplicate, record or otherwise reproduce these materials, in whole or
in part, or otherwise make the same available to any person other than those
authorized above.

                  (3) The Manuals, written directives, other manuals and
materials and any other confidential communications provided or approved by
Licensor shall at all times remain the sole property of Licensor, shall at all
times be kept in a secure place on the Restaurant premises, and shall be
returned to Licensor immediately upon request or upon termination or expiration
of this Agreement.

                  (4) The Manuals, any written directives, and any other manuals
and materials issued by Licensor and any modifications to such materials shall
supplement this Agreement.

                  (5) Licensor may from time to time revise the contents of the
Manuals and the contents of any other manuals and materials created or approved
for use in the operation of the Licensed Business. Operator expressly agrees to
comply with each new or changed standard.

                  (6) Operator shall at all times ensure that the Manuals are
kept current and up-to-date. In the event of any dispute as to the contents of
the Manuals, the terms of the master copy of the Manuals maintained by Licensor
at Licensor's home office shall control.

                  (7) Operator shall promptly reimburse Licensor for Licensor's
cost of producing any replacement Manual requested by Operator.

         B.       (1) Neither Operator nor any of the Controlling Principals
shall, during the term of this Agreement or thereafter, communicate, divulge or
use for the benefit of any other person, persons or Entity and, following the
expiration or termination of this Agreement, they shall not use for their own
benefit, any confidential information, knowledge or know-how concerning the
methods of operation of the Licensed Business which may be communicated to
Operator or the Controlling Principals or of which they may be apprised in
connection with the operation of the Restaurant under the terms of this
Agreement. Operator and the Controlling Principals shall divulge such
confidential information only to such of Operator's employees as must have
access to it in order to operate the Restaurant. Any and all information,
knowledge, know-how, techniques and any materials used in or related to the
System which Licensor provides to Operator in connection with this Agreement
including, but not limited to, the Manuals, plans and specifications, marketing
information and strategies and site evaluation and selection guidelines and
techniques, recipes, and other information communicated in writing and through
other means, including electronic media (e.g., CD ROM, DVD, computer disk or
video and audio tape) shall be deemed confidential for purposes of this
Agreement. Neither Operator nor the 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 Operator and each of the
Controlling Principals; provided,

                                       33

<PAGE>

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) Operator shall require and obtain the execution of
covenants similar to those set forth in Section XI(B)(l) from its General
Manager and Kitchen Manager. Such covenants shall be set forth in an agreement
substantially in the form of Attachment C attached hereto. Each Principal not
required to sign this Agreement as a Controlling Principal also must execute
such covenants. Operator shall provide Licensor executed copies of all such
agreements ten (10) days after they are executed.

                  (3) If Operator or the Controlling Principals develop any new
concept, product, recipe, process or improvement in the operation or promotion
of the Restaurant, Operator is required to promptly notify and assign to
Licensor all of Operator's rights therein and to provide Licensor all
information necessary to effectuate the assignment to Licensor, without
compensation. Operator and the Controlling Principals acknowledge that any such
concept pertaining thereto, process or improvement will become the property of
Licensor, and Licensor may itself use or disclose such information to other
operators or developers for their use as Licensor determines to be appropriate.

         C.       (1) Operator and the Controlling Principals specifically
acknowledge that, pursuant to this Agreement, Operator and the Controlling
Principals will receive valuable training, trade secrets and confidential
information, including, without limitation, information regarding the
operational, sales, promotional and marketing methods and techniques of Licensor
and the System which are beyond the present skills and experience of Operator
and the Controlling Principal's and Operator's managers and employees. Operator
and the 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 Restaurant, and that
gaining access to such specialized training, trade secrets and confidential
information is, therefore, a primary reason why they are entering into this
Agreement. In consideration of such specialized training, trade secrets and
confidential information and rights, Operator and the Controlling Principals
covenant that, during the term of this Agreement, except as otherwise approved
in writing by Licensor, neither Operator nor any of the Controlling Principals
shall, either directly or indirectly, for themselves or through, on behalf of or
in conjunction with any person, persons or Entity:

                           (a) divert, or attempt to divert, any business or
customer of the Licensed Business 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

                           (b) 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

                                       34

<PAGE>

registered the same or similar Proprietary Marks or operates or licenses others
to operate a business under the same or similar Proprietary Marks.

                  (2) With respect to Operator, and for a continuous
uninterrupted period commencing upon the expiration, termination of (regardless
of the cause for termination), or transfer of all of Operator's interest in,
this Agreement (or, with respect to each of the Controlling Principals,
commencing upon the earlier of: (a) the expiration, termination of, or transfer
of all of Operator's interest in, this Agreement; or (b) the time such
individual or Entity ceases to satisfy the definition of the "Controlling
Principals") and continuing for two (2) years thereafter, except as otherwise
approved in writing by Licensor, neither Operator, nor any of the Controlling
Principals shall, directly or indirectly, for themselves, or through, on behalf
of or in conjunction with any person, persons or Entity:

                           (a) divert, or attempt to divert, any business or
customer of the Licensed Business 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;

                           (b) 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 operator or developer of Licensor, or
otherwise directly or indirectly induce such person to leave that person's
employment, except as may be permitted under any existing development agreement
or operating agreement between Licensor and Operator; or

                           (c) 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 or provide
guarantees with respect to such loans to, any business that is of a character
and concept similar to the Restaurant, including, without limitation, a full
service varied menu casual dining restaurant which serves alcoholic beverages
through a full-service bar, which business is, or is intended to be located
within the Location or within a fifteen (15) mile radius of any O'Charley's
restaurant or other 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: (i) the expiration or termination of, or the transfer of all of Operator's
interest in, this Agreement; or (ii) the time the Controlling Principal ceases
to satisfy the definition of Principal, as applicable.

                  (3) 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 covenants herein shall be
construed as independent of any other covenant or provision of this Agreement.
If all or any portion of a covenant in this Section 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, Operator and the
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.

                                       35

<PAGE>

Sections XI(C)(1)(b) and (2)(c) shall not apply to the ownership of less than a
five percent (5%) beneficial interest in the outstanding equity securities of
any Publicly-Held Entity.

                           (a) Operator and the 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 this Section XI(C)
in this Agreement, or any portion thereof, without their consent, effective
immediately upon notice to Operator; and Operator and the Controlling Principals
agree that they shall immediately comply forthwith with any covenant as so
modified, which shall be fully enforceable notwithstanding the provisions of
Section XX(B) hereof.

                           (b) Operator and the 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 Section.

                  (4) Operator shall require and obtain the execution of
covenants similar to those set forth in this Section XI(C) (including covenants
applicable upon the termination of a person's employment with Operator) from its
General Manager and its Kitchen Manager. At Licensor's request, Operator shall
require and obtain execution of covenants similar to those set forth in this
Section XI(C) (including covenants applicable upon the termination of a person's
employment with Operator) from any personnel of Operator who have received or
will have access to training from Licensor. Any such covenants shall be
substantially in the form set forth in Attachment C.

                  (5) Each Principal not required to sign this Agreement as a
Controlling Principal also must execute such covenants. Notwithstanding the
foregoing, 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 Section XI(C)(5).

         D. Operator and the Controlling Principals acknowledge that a violation
of the terms of this Section would result in irreparable injury to Licensor for
which no adequate remedy at law may be available, and Operator and the
Controlling Principals accordingly consent to the issuance of an injunction
prohibiting any conduct by Operator or the Controlling Principals in violation
of the terms of this Section. Operator and the Controlling Principals agree to
pay all court costs and reasonable attorney's fees incurred by Licensor in
connection with the enforcement of this Section, including payment of all costs
and expenses for obtaining specific performance of, or an injunction against
violation of, the requirements of such Section.

         E. Notwithstanding anything else in this Article XI 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 XI to the extent they are inconsistent with one another.

                                       36

<PAGE>

                                   ARTICLE XII
                                BOOKS AND RECORDS

         A. Operator shall maintain during the term of this Agreement, and shall
preserve for at least five (5) years from the dates of their preparation, full,
complete and accurate books, records and accounts, including, but not limited
to, sales slips, coupons, purchase orders, credit card transmission records,
payroll records, employee meal records, check stubs, bank statements, deposit
slips, sales tax records and returns, cash receipts and disbursements, journals
and ledgers, records of EFT transactions, and backup or archived records of
information maintained on any computer system, all in accordance with GAAP, as
applicable, and in the form and manner prescribed by Licensor from time to time
in the Manuals or otherwise in writing.

         B. In addition to the remittance reports required by Articles V and IX
hereof, Operator shall comply with the following reporting obligations:

                  (1) Operator shall, at Operator's expense, submit to Licensor,
in the form prescribed by Licensor, a quarterly profit and loss statement (which
may be unaudited) for Operator within thirty (30) days after the end of each
quarter during the term hereof. Each such statement shall be certified by
Operator's treasurer or chief financial officer attesting that it is true,
complete and correct.

                  (2) Operator shall, at its expense, provide to Licensor
complete audited annual financial statements for Operator prepared by an
independent certified public accountant satisfactory to Licensor, within one
hundred twenty (120) days after the end of each fiscal year of Operator during
the term hereof, showing the financial position, results of operations, cash
flows and owners' equity of Operator during such fiscal year. Such financial
statements shall be prepared in accordance with GAAP, and shall be certified by
Operator's treasurer or chief financial officer attesting that they are true,
complete and correct.

                  (3) Operator shall also submit to Licensor, for review or
auditing, such other forms, reports, records, information and data as Licensor
may reasonably designate, in the form and at the times and places reasonably
required by Licensor, upon request and as specified from time to time in
writing.

         C. Licensor or its designees shall have the right at all reasonable
times to review, audit, examine and copy any or all books and records of
Operator as Licensor may require. Operator shall make such books and records
available to Licensor or its designees immediately upon request. If any required
royalty payments, marketing fees, advertising contributions or any other
payments to Licensor are delinquent, or if any inspection should reveal that
such payments have been understated in any report to Licensor, then Operator
shall immediately pay to Licensor the amount overdue or understated upon demand
with interest determined in accordance with the provisions of Section V(B)(4).
If an inspection discloses an understatement in any report of two percent (2%)
or more, Operator shall, in addition, reimburse Licensor for all costs and
expenses connected with the inspection (including, without limitation,
reasonable accounting and attorney's fees). These remedies shall be in addition
to any other remedies Licensor may have at law or in equity.

                                       37

<PAGE>

         D. Operator understands and agrees that the receipt or acceptance by
Licensor of any of the statements furnished or fees paid to Licensor (or the
cashing of any royalty checks, or processing of electronic fund transfers) shall
not preclude Licensor from questioning the correctness thereof at any time and,
in the event that any inconsistencies or mistakes are discovered in such
statements or payments, they shall immediately be rectified by the Operator and
the appropriate payment shall be made by the Operator.

         E. Operator hereby authorizes (and agrees to execute any other
documents deemed necessary to effect such authorization) all banks, financial
institutions, businesses, suppliers, manufacturers, contractors, vendors and
other persons or entities with which Operator does business to disclose to
Licensor any requested financial information in their possession relating to
Operator or the Restaurant. Operator authorizes Licensor to disclose data from
Operator's reports, if Licensor determines, in its sole discretion, that such
disclosure is necessary or advisable, which disclosure may include disclosure to
prospective or existing operators or other third parties.

         F. Operator hereby appoints Licensor its true and lawful
attorney-in-fact with full power and authority, for the sole purpose of
obtaining any and all returns and reports filed by Operator with any state
and/or federal taxing authority. This power of attorney shall survive the
expiration or termination of this Agreement. Operator shall execute such
additional documents as Licensor shall require in connection with such
appointment

         G. In addition to the information, books, records and reports Operator
must provide with respect to the Restaurant and Operator described above, the
Controlling Principals shall each provide to Licensor his or her unaudited
annual financial statements within one hundred twenty (120) days after the end
of Operator's fiscal year. Such financial statements shall be prepared in
accordance with GAAP, and shall be certified as true and correct by the
applicable Controlling Principal.

                                  ARTICLE XIII
                                    INSURANCE

         A. Operator shall procure, upon execution of this Agreement, and shall
maintain in full force and effect at all times during the term of this Agreement
at Operator's expense, an insurance policy or policies protecting Operator and
Licensor and its Affiliates and their respective Affiliates, successors and
assigns and each such Entity's respective officers, directors, shareholders,
partners, agents, representatives, independent contractors and employees against
any demand or claim with respect to personal injury, death or property damage,
or any loss, liability or expense whatsoever arising or occurring upon or in
connection with the Restaurant.

         B. (1) Such policy or policies shall be written by a responsible
carrier or carriers reasonably acceptable to Licensor and shall include, at a
minimum (except as additional coverages and higher policy limits may reasonably
be specified by Licensor from time to time in accordance with standards and
specifications set forth in writing), the following:

                           (a) Comprehensive General Liability Insurance,
including broad form contractual liability, broad form property damage, personal
injury, advertising injury, completed

                                       38

<PAGE>

operations, products liability and fire damage coverage, in the amount of One
Million Dollars ($1,000,000) combined single limit;

                           (b) Liquor Legal Liability Insurance in the amount of
One Million Dollars ($1,000,000) combined single limit;

                           (c) "All Risks" coverage (including earthquake and
flood, if the Restaurant is located in a designated earthquake or flood zone)
for the full cost of replacement of the Restaurant premises and all other
property in which Licensor may have an interest with no coinsurance clause;

                           (d) An "umbrella" policy providing excess coverage
with limits of not less than Ten Million Dollars ($10,000,000);

                           (e) Automobile liability coverage, including coverage
of owned, non-owned and hired vehicles, with coverage in amounts not less than
One Million Dollars ($1,000,000) combined single limit;

                           (f) Workers' compensation insurance in amounts
provided or described by applicable laws and statutes; and

                           (g) Such other insurance as may be required by the
state or locality in which the Restaurant is located and operated.

                  (2) Operator may, with the prior written consent of Licensor,
elect to have reasonable deductibles in connection with the coverage required
under Sections XIII(B)(1)(a)-(g) hereof. Such policies shall also include a
waiver of subrogation in favor of Licensor and its directors, officers,
shareholders, partners, employees, representatives, independent contractors and
agents.

         C. In connection with any construction, renovation, refurbishment or
remodeling of the Restaurant, Operator shall maintain Builder's Risks insurance
and performance and completion bonds in forms and amounts, and written by a
carrier or carriers, reasonably satisfactory to Licensor.

         D. Operator's obligation to obtain and maintain the foregoing policy or
policies in the amounts specified shall not be limited in any way by reason of
any insurance which may be maintained by Licensor, nor shall Operator's
performance of that obligation relieve it of liability under the indemnity
provisions set forth in Article XVI of this Agreement.

         E. All public liability and property damage policies shall contain a
provision that Licensor and its Affiliates and their respective directors,
officers, shareholders, partners, employees, representatives, independent
contractors and agents, although named as insureds, shall nevertheless be
entitled to recover under such policies on any loss occasioned to Licensor or
its servants, agents or employees by reason of the negligence of Operator or its
servants, agents or employees.

                                       39

<PAGE>

         F. Upon execution of this Agreement, and thereafter as required by
Licensor and thirty (30) days prior to the expiration of any such policy,
Operator shall deliver to Licensor Certificates of Insurance evidencing the
existence and continuation of proper coverage with limits not less than those
required hereunder. In addition, if requested by Licensor, Operator shall
deliver to Licensor a copy of the insurance policy or policies required
hereunder. All insurance policies required hereunder, with the exception of
workers' compensation, shall name Licensor and any parent or affiliate, and
their respective directors, officers, shareholders, partners, employees,
representatives, independent contractors and agents, as additional insureds, and
shall expressly provide that any interest of same therein shall not be affected
by any breach by Operator of any policy provisions. Further, all insurance
policies required hereunder shall expressly provide that no less than thirty
(30) days prior written notice shall be given to Licensor in the event of a
material alteration to or cancellation of the policies.

         G. Should Operator, for any reason, fail to procure or maintain the
insurance required by this Agreement, as such requirements may be revised from
time to time by Licensor in writing, Licensor shall have the right and authority
(without, however, any obligation to do so) immediately to procure such
insurance and to charge same to Operator, which charges, together with a
reasonable fee for Licensor's expenses in so acting, shall be payable by
Operator immediately upon notice. The foregoing remedies shall be in addition to
any other remedies Licensor may have at law or in equity.

                                   ARTICLE XIV
                                 DEBTS AND TAXES

         A. Operator shall promptly pay when due all Taxes levied or assessed,
and all accounts and other indebtedness of every kind incurred by Operator in
the conduct of the Licensed Business under this Agreement. Without limiting the
provisions of Article XVI, Operator shall be solely liable for the payment of
all Taxes and shall indemnify Licensor for the full amount of all such Taxes
imposed on Licensor, and for any liability (including penalties, interest and
expenses) arising from or concerning the payment of Taxes, whether Taxes were
correctly or legally asserted or not.

         B. Each payment to be made to Licensor hereunder shall be made free and
clear and without deduction for any Taxes. The term "Taxes" means any present or
future taxes, levies, imposts, duties or other charges of whatever nature,
including any interest or penalties thereon, imposed by any government or
political subdivision of such government on or relating to the operation of the
Licensed Business, the payment of monies, or the exercise of rights granted
pursuant to this Agreement.

         C. If any Taxes (other than income taxes) are directly or indirectly
imposed on Licensor with respect to any payments to Licensor required under this
Agreement, Operator shall pay an amount to Licensor equal to the Tax.

         D. In the event of any bona fide dispute as to Operator's liability for
taxes assessed or other indebtedness, Operator may contest the validity or the
amount of the tax or indebtedness in accordance with the procedures of the
taxing authority or applicable law. However, in no event shall Operator permit a
tax sale or seizure by levy of execution or similar writ or warrant or

                                       40

<PAGE>

attachment by a creditor, to occur against the premises of the Licensed Business
or any improvements or other property thereon.

         E. Operator shall comply with all federal, state and local laws, rules
and regulations and shall timely obtain any and all permits, certificates or
licenses necessary for the full and proper conduct of the Licensed Business,
including, without limitation, licenses to do business, fictitious name
registrations, licenses and permits to sell alcoholic beverages in the
Restaurant, sales tax permits, fire clearances, health and safety permits and
certificates of occupancy, and any permits, certificates or licenses required by
any environmental law, rule, or regulation.

         F. Operator shall immediately notify Licensor in writing of the
commencement of any action, suit or proceeding and of the issuance of any order,
writ, injunction, award or decree of any court, agency or other governmental
instrumentality, which may adversely affect the operation or financial condition
of the Licensed Business.

                                   ARTICLE XV
                              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 Operator's consent. Specifically, and without limitation to the
foregoing, Operator and the Controlling Principals 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, Operator and the
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, Operator 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
Operator if Licensor assigns its rights in this Agreement.

         B.       (1) Operator and the Controlling Principals understand and
acknowledge that the rights and duties set forth in this Agreement are personal
to Operator and the Controlling Principals, and that Licensor has granted rights
under this Agreement in reliance on the business skill, financial capacity and
personal character of Operator and the Controlling Principals and with the
expectation that the duties and obligations contained in this Agreement will be
performed by Operator and the Controlling Principals signing this Agreement.
Accordingly, neither Operator nor any Controlling Principal, nor any successor
or assign of Operator 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 the assets of the Restaurant
or in Operator without the prior written consent of Licensor; provided, however,
that such prior written consent shall not be required for a transfer of less
than a five

                                       41

<PAGE>

percent (5%) interest in a Publicly-Held Entity. Any purported assignment or
transfer, by operation of law or otherwise, not having the written consent of
Licensor shall be null and void.

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

                           (a) All of the accrued monetary obligations of
Operator and its Affiliates and all other outstanding obligations to Licensor
and its Affiliates arising under this Agreement or any other agreement shall
have been satisfied in a timely manner and Operator shall have satisfied all
trade accounts and other debts of whatever nature or kind, in a timely manner.

                           (b) Operator, or its Affiliates, are not in default
of any provision of this Agreement, any amendment hereof or successor hereto, or
any other agreement between Operator, or its Affiliates and Licensor, or its
Affiliates, and Operator 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 (if applicable)
shall have executed a general release, in a form satisfactory to Licensor, of
any and all claims against Licensor, its Affiliates and each 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 other agreement between Licensor and Operator and federal, state and local
laws, rules and regulations.

                           (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 contained 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 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 operator's application for a license, 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 licensed herein (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 and number of other O'Charley's restaurants owned or
operated by transferee.

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<PAGE>

                           (f) The transferee shall execute, for a term ending
on the expiration date of this Agreement and with such renewal terms as may be
provided by this Agreement, the standard form operating agreement then being
offered to new System operators and other ancillary agreements as Licensor may
require for the Restaurant, 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, including, without limitation, a higher
percentage royalty fee, marketing fee, advertising contribution or expenditure
requirement; and, if transferee is a corporation, limited liability company,
partnership or other Entity, transferee's shareholders, members, partners or
other investors, as applicable, shall execute such agreement 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 the Restaurant 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 General Manager and 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) Operator shall pay a transfer fee of Five
Thousand Dollars ($5,000) to Licensor, 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 prior to the approval of transfer.

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

                           (l) Operator shall have completed its obligations to
construct and open the Restaurant under Article II of this Agreement and the
terms of the Development Agreement.

                  (3) Operator shall not grant a security interest in the
Restaurant or in any of Operator's assets without Licensor's prior written
consent. In connection therewith, the secured party will be required by Licensor
to agree that in the event of any default by Operator under any documents
related to the security interest, Licensor shall have the right and option to be
substituted as obligor to the secured party and/or to cure any default of
Operator.

                                       43

<PAGE>

                  (4) Operator 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. If 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 set forth at Section XV(B)(2)(a), (b), (d), (h), (i) and (k). With
respect to a transfer to a corporation formed for the convenience of ownership,
Operator shall be the owner of all of the voting stock or interest of the
corporation and if Operator is owned by more than one individual, each such
individual shall have the same proportionate ownership interest in the
corporation as he had in Operator prior to the transfer.

         D. (1) If Operator wishes to transfer all or part of its interest in
the assets of the Restaurant or this Agreement or if Operator or a Controlling
Principal wishes to transfer any ownership interest in Operator 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, or such other date as
the parties 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 XV(D) shall not constitute a waiver
of any other provision of this Agreement, including the consent provisions of
Section XV(B) and all of the other requirements of Article XV, with respect to a
proposed transfer.

            (2) In the event an 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 cash equivalent of such items or benefits (the "Cash
Equivalent"). If the parties cannot agree within thirty (30) days on the
reasonable cash equivalent 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 Operator will each have the opportunity to
appoint, at their own expense, a Qualified Appraiser, within five (5) days
following the expiration of the thirty (30) day period within which Licensor and
Operator could not mutually agree on the Cash Equivalent. If either party shall
fail to appoint a Qualified Appraiser within this five (5) day

                                       44

<PAGE>

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 sole written opinion shall establish the Cash Equivalent. 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 (a) all fees for any such Qualified Appraiser
due from Operator hereunder, and (b) all amounts due from Operator or any of its
Affiliates against any payment therefor.

         E.       (1) Upon the death of Operator (if a natural person) or any
Controlling Principal who is a natural person (the "Deceased"), the executor,
administrator or other personal representative of the Deceased shall transfer
such interest to a third party approved by Licensor within twelve (12) months
after the death of the Deceased. 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 must be approved 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 Operator (if 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 in
accordance with the conditions described in this Article XV within six (6)
months after notice to Operator 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 by
a licensed practicing physician selected by Licensor, upon examination of the
person, or if the person refuses to submit to an examination, then such person
automatically shall be deemed permanently disabled as of the date of such
refusal for the purpose of this Section XV(E). The costs of any examination
required by this Section shall be paid by Licensor.

                  (3) In the event of the death or Permanent Disability of
Operator (if a natural person), the Operating Principal or any Controlling
Principal who is a natural person and who has a twenty-five percent (25%) or
more interest in this Agreement, the Restaurant or in Operator, Licensor at its
option may elect to operate (or appoint a designee to operate) the Licensed
Business during the interim twelve (12) months following such death or the
interim six (6) months following such Permanent Disability, as applicable, until
the interest of such person is transferred in accordance with this Article XV.
As compensation for managing the Restaurant, Licensor will charge a management
fee of five percent (5%) of Operator's Gross Sales for each Accounting Period.
Operator will execute any agreements or other documents required by Licensor to
effect the foregoing and shall remain responsible for payment of employee
salaries, taxes, rent, utilities, supplies and all other costs and expenses
associated with the operation of the Restaurant. Licensor shall exercise its
commercially reasonable efforts in managing the Licensed Business, but shall not
be liable for any losses incurred by the Licensed Business during the time of
such management and thereafter.

                                       45

<PAGE>

                  (4) Upon the death or claim of Permanent Disability of
Operator or any Controlling Principal, Operator or a representative of Operator
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 Section for any inter vivos transfer. Operator and each Controlling
Principal shall have the right to seek approval of a transfer of their
respective interest to a proposed successor prior to the death or claim of
Permanent Disability by Operator or the Controlling Principal, as applicable. If
Operator 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, Operator 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 described herein
shall not constitute a waiver of any claims which Licensor 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 or other Entity ownership interests in Operator 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 Operator
offering shall imply (by use of the Proprietary Marks or otherwise) that
Licensor is participating in an underwriting, issuance or offering of securities
or other Entity ownership interest of Operator, and Licensor's review of any
offering materials shall be limited solely to the subject of the relationship
between Operator and Licensor and their Affiliates. Licensor may, at its option,
require Operator's offering materials to contain a written statement prescribed
by Licensor concerning the limitations described in the preceding sentence.
Operator, its Principals and the other participants in the offering must prior
to the commencement of such offering, agree in writing to fully indemnify
Licensor and 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, Operator shall reimburse Licensor for its reasonable costs
and expenses associated with reviewing the proposed offering, including, without
limitation, legal and accounting fees. Operator 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 XV(G).

         H. Operator and each of its Controlling Principals, as applicable, may
transfer, sell or assign their respective interests in Operator, 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 Operator. Licensor's consent may be conditioned on compliance with
Section XV(B)(2)(a), (b), (d), (f), (h), (i), (k) and (l). For the purpose of
this Agreement, "Controlling Interest" shall mean:

                                       46

<PAGE>

                  (1) if Operator is a corporation, that the Controlling
Principals, either individually or cumulatively, (a) directly or indirectly own
at least fifty-one percent (51%) of the shares of each class of Operator's
issued and outstanding capital stock and (b) 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 board if 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;

                  (2) if Operator is a limited liability company, that the
Controlling Principals (a) own at least fifty-one percent (51%) of the
outstanding units of membership interest in the limited liability company, and
(b) 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

                  (3) if Operator is a partnership or other Entity, that the
Controlling Principals (a) 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 interests of any direct or indirect corporate or other
Entity general partner) and (b) are entitled under its partnership agreement or
other Entity organizational documents or applicable law to act on behalf of the
partnership without the approval or consent of any other partner or owner or be
able to cast a sufficient number of votes to require the partnership or other
Entity to take or omit to take any action which the partnership or other Entity
is required to take or omit to take under this Agreement.

         I. If any person holding an interest in Operator (other than Operator
or a Controlling Principal, which parties shall be subject to Section XV(B)
above) transfers such interest, then Operator 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 and business reputation, have an
acceptable credit rating, and may not be one of Licensor's competitors. Such
transferee will be a 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
XI(B)(2) and XI(C)(4)). Licensor also reserves the right to designate the
transferee as one of the Controlling Principals.

                                   ARTICLE XVI
                                 INDEMNIFICATION

         A. Operator and each of the Controlling Principals shall indemnify and
hold harmless Licensor and its Affiliates and their officers, directors,
shareholders, employees, managers, members, agents and representatives from any
and all claims, demands, suits, proceedings, fines, losses, liabilities damages,
costs and expenses (including reasonable attorneys' fees) suffered or incurred,
directly or indirectly, by any one or more of them (collectively, "Damages") as
a result of (1) any breach or other failure by Operator, Operating

                                       47

<PAGE>

Principal or any Controlling Principal to perform its or his obligations
hereunder or under any other instrument or agreement executed in connection
herewith, or (2) any other action or inaction by Operator, Operating Principal,
any Controlling Principal or any other person resulting from or in connection
with the operation of the Restaurant; provided, however, that neither Operator,
Operating Principal nor any Controlling Principal shall be liable for Damages
resulting from Licensor's or its Affiliates' gross negligence or willful
misconduct.

         B. Operator and each of the Controlling Principals 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 Operator or any other person resulting from or in connection with
the operation of the Restaurant or to allow Operator to defend such action with
counsel satisfactory to Licensor.

         C. Operator and the Controlling Principals expressly agree that the
terms of this Article XVI shall survive the termination, expiration or transfer
of this Agreement or any interest herein.

                                  ARTICLE XVII
                           RELATIONSHIP OF THE PARTIES

         A. The parties acknowledge and agree that this Agreement does not
create a fiduciary relationship between them, that Operator 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, Operator shall hold itself out to
the public as an independent contractor conducting its Restaurant operations
pursuant to the rights granted by Licensor. Operator 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 on the Restaurant premises
established for the purposes hereunder, on any Restaurant delivery vehicle, and
on all letterhead, business cards, forms, and as further described in the
Manuals, the content and form of which Licensor reserves the right to specify in
writing.

         C. Operator understands and agrees that nothing in this Agreement
authorizes Operator or any of the Controlling Principals 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 Operator or any of the
Controlling Principals or any claim or judgment arising therefrom.

                                  ARTICLE XVIII
                                   TERMINATION

         A.       (1) Operator acknowledges and agrees that each of Operator's
obligations described in this Agreement is a material and essential obligation
of Operator, that nonperformance of such obligations will adversely and
substantially affect the Licensor and the

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<PAGE>

System, and that the exercise by Licensor of the rights and remedies set forth
herein is appropriate and reasonable.

                  (2) Operator shall be deemed to be in material default under
this Agreement and all rights granted herein shall automatically terminate
without notice to Operator if:

                           (a) Operator becomes insolvent or makes a general
assignment for the benefit of creditors;

                           (b) Operator files a voluntary petition under any
section or chapter of federal bankruptcy law 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;

                           (c) Operator is adjudicated bankrupt or insolvent in
proceedings filed against Operator under any section or chapter of any
Bankruptcy Laws, or if a bill in equity or other proceeding for the appointment
of a receiver of Operator or other custodian for Operator's business or assets
is filed and consented to by Operator; or if a receiver or other custodian
(permanent or temporary) of Operator's assets or property, or any part thereof,
is appointed by any court of competent jurisdiction;

                           (d) proceedings for a composition with creditors
under any state or federal law are instituted by or against Operator,

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

                           (f) Operator is dissolved;

                           (g) execution is levied against Operator's business
or property;

                           (h) suit to foreclose any lien or mortgage against
the Restaurant premises or equipment is instituted against Operator and not
dismissed within thirty (30) days; or

                           (i) the real or personal property of Operator's
Restaurant shall be sold after levy thereupon by any sheriff, marshal or other
government official.

                  (3) Operator shall be deemed to be in material default and
Licensor may, at its option, terminate this Agreement and all rights granted
hereunder, without affording Operator any opportunity to cure the default,
effective immediately upon notice to Operator, upon the occurrence of any of the
following events:

                           (a) Operator operates the Restaurant or sells any
products or services authorized by Licensor for sale at the Restaurant at a
location which has not been accepted by Licensor;

                           (b) Operator fails to acquire an accepted location
for the Restaurant within the time and in the manner specified in Article II;

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<PAGE>

                           (c) Operator fails to construct or remodel the
Restaurant in accordance with the plans and specifications provided to Operator
under Section VI(C) as such plans may be adapted with Licensor's approval in
accordance with Section II(F);

                           (d) Operator fails to open the Restaurant for
business as a full-service O'Charley's restaurant within the period specified in
Section II(H) hereof;

                           (e) Operator at any time ceases to operate or
otherwise abandons the Restaurant, or loses the right to possession of the
premises, or otherwise forfeits the right to do or transact business in the
jurisdiction where the Restaurant is located; provided, however, that this
provision shall not apply in cases of Force Majeure, if, through no fault of
Operator, the premises are damaged or destroyed by an event as described above,
provided that Operator applies within thirty (30) days after such event for
Licensor's approval to relocate or reconstruct the premises and Operator
diligently pursues such reconstruction or relocation;

                           (f) Operator or any of the Controlling Principals is
convicted of, or has 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;

                           (g) a threat or danger to public health or safety
results from the construction, maintenance or operation of the Restaurant;

                           (h) Operator fails to propose a qualified replacement
or successor Operating Principal (or his designee, as applicable) or the General
Manager within the time required under Sections VII(C)(5) and VII(D)(4) hereof,
respectively;

                           (i) Operator or any of the Controlling Principals
purports to transfer any rights or obligations under this Agreement or any
interest in Operator or the assets of the Restaurant to any third party without
Licensor's prior written consent or without offering Licensor a right of first
refusal with respect to such transfer, contrary to the terms of Article XV of
this Agreement;

                           (j) Operator or any of its Affiliates fails, refuses
or neglects promptly to pay any monetary obligation owing to Licensor or its
Affiliates, when due under this Agreement or any other agreement (which shall
include payments to lenders where Licensor has guaranteed the underlying
indebtedness), or to submit the financial or other information required by
Licensor under this Agreement and does not cure such default within five (5)
days following notice from Licensor (or such other cure period specified in such
other agreement, unless no cure period is specified or such period is less than
five (5) days, in which case the five (5) day cure shall apply);

                           (k) Operator or any of the Controlling Principals
fails to comply with the covenants in Section XI(C) hereof or Operator fails to
obtain execution of the covenants and related agreements required under Section
XI(C)(4) hereof within thirty (30) days after being requested to do so by
Licensor;

                                       50

<PAGE>

                           (l) contrary to the terms of Section XI(B)(1) hereof,
Operator or any of the Controlling Principals discloses or divulges any
confidential information provided to Operator or the Controlling Principals by
Licensor, or fails to obtain execution of covenants and related agreements
required under Section XI(B)(2) hereof within thirty (30) days after being
requested to do so by Licensor;

                           (m) a transfer upon death or Permanent Disability is
not transferred in accordance with Article XV within the time periods therein;

                           (n) Operator knowingly maintains false books or
records, or submits any false reports to Licensor;

                           (o) Operator or any of the Controlling Principals
breaches any of the covenants in any material respect set forth in Article VII
or has falsely made any of the representations or warranties set forth in
Article VII;

                           (p) Operator fails to procure and maintain such
insurance policies as required by Article XIII and Operator fails to cure such
default within five (5) days following notice from Licensor;

                           (q) Operator misuses or makes any unauthorized use of
the Proprietary Marks or otherwise materially impairs the goodwill associated
therewith or Licensor's rights therein;

                           (r) Operator fails to comply with the requirements in
the software license agreement executed pursuant to Section VIII(F) and the
software license is terminated by Licensor;

                           (s) Operator fails to obtain, install and maintain
the hardware, software and communication lines required pursuant to Section
VIII(E)(10), and Operator fails to cure such default within twenty-four (24)
hours following notice from Licensor;

                           (t) Operator, or any of the Controlling Principals
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 Operator after notice by Licensor; or

                           (u) Operator or any of its Affiliates fails or
refuses to comply with any term or condition of any sublease, or related
agreement, between Licensor or its Affiliates and Operator 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 provided in Section XVIII(B) shall
apply).

                           (v) Operator or any Controlling Principal commits any
other act, or any other event occurs or any other condition comes into existence
that is identified in this Agreement as a material event of default.

                                       51

<PAGE>

         B. Except as provided in Sections XVIII(A)(2) and (3) of this
Agreement, if Operator fails to comply with any other term or condition imposed
by this Agreement, Licensor may terminate this Agreement by giving written
notice stating the nature of such default to Operator at least thirty (30) days
prior to the effective date of termination. However, Operator may avoid
termination by immediately initiating a remedy to cure such default and curing
it to Licensor's satisfaction within the thirty-day period and by promptly
providing proof thereof to Licensor. If any such default is not cured within the
specified time, or such longer period as applicable law may require, this
Agreement shall terminate without further notice to Operator effective
immediately upon the expiration of the thirty (30) day period or such longer
period as applicable law may require unless Licensor gives Operator notice of
Licensor's intent to continue this Agreement. Defaults which are susceptible of
cure hereunder may include, but are not limited to the following illustrative
events:

                  (1) Operator fails to comply with any of the requirements
imposed by this Agreement, as it may from time to time be amended or reasonably
be supplemented by Licensor, or fails to carry out the terms of this Agreement
in good faith;

                  (2) Operator fails to maintain or observe any of the
standards, specifications or procedures prescribed by Licensor in this Agreement
or otherwise in writing; or

                  (3) Operator fails, refuses or neglects to obtain Licensor's
prior written approval or consent as required by this Agreement.

         C. Any alleged default by Licensor of this Agreement shall be deemed
waived by Operator and the Controlling Principals unless: (i) Operator gives
Licensor written notice of such alleged default within thirty (30) days of its
occurrence; and (ii) Licensor fails to initiate a remedy to such alleged default
within sixty (60) days of having received written notice thereof.

                                   ARTICLE XIX
                                POST-TERMINATION

         Upon termination or expiration of this Agreement all rights granted
hereunder to Operator shall forthwith terminate, and:

         A. Operator shall immediately cease to operate the Restaurant under
this Agreement and shall not thereafter, directly or indirectly, represent
itself to the public or hold itself out as a present operator of Licensor.

         B. Operator shall immediately and permanently cease to use, in any
manner whatsoever, any confidential methods, computer software, procedures and
techniques associated with the System, the mark "O'Charley's", and all other
Proprietary Marks and distinctive forms, slogans, signs, symbols and devices
associated with the System. In particular, Operator shall cease to use, without
limitation, all signs, neons, advertising materials, displays, stationery, forms
and any other articles which display the Proprietary Marks.

         C. Operator shall take such action as may be necessary to cancel any
assumed name or equivalent registration which contains the mark "O'Charley's" or
any other service mark or trademark of Licensor, and Operator shall furnish
Licensor with evidence satisfactory to

                                       52

<PAGE>

Licensor of compliance with this obligation within five (5) days after
termination or expiration of this Agreement.

         D. Operator agrees, in the event it continues to operate or
subsequently begins to operate any other business, not to use any reproduction,
counterfeit, copy or colorable imitation of the Proprietary Marks, either in
connection with such other business or the promotion thereof, which is likely to
cause confusion, mistake or deception, or which is likely to dilute Licensor's
rights in and to the Proprietary Marks, and further agrees not to utilize any
designation of origin or description or representation which falsely suggests or
represents an association or connection with Licensor constituting unfair
competition.

         E. Operator and the Controlling Principals shall promptly pay all sums
owing to Licensor and its Affiliates. Such sums shall include all damages, costs
and expenses, including reasonable attorneys' fees, incurred by Licensor as a
result of any default by Operator, which obligation shall give rise to and
remain, until paid in full, a lien in favor of Licensor against any and all of
the personal property, furnishings, equipment, signs, fixtures and inventory
owned by Operator and on the premises operated hereunder at the time of default.

         F. Operator and the Controlling Principals shall pay to Licensor all
damages, costs and expenses, including reasonable attorneys' fees, incurred by
Licensor in connection with obtaining any remedy available to Licensor for any
violation of this Agreement and subsequent to the termination or expiration of
this Agreement in obtaining injunctive or other relief for the enforcement of
any provisions of this Article XIX.

         G. Operator shall immediately deliver to Licensor all Manuals, records,
files, instructions, correspondence, any computer software licensed by Licensor,
all materials related to operating the Restaurant, including, without
limitation, agreements, invoices and any and all other materials relating to the
operation of the Restaurant in Operator's possession or control, and all copies
thereof (all of which are acknowledged to be Licensor's property), and shall
retain no copy or record of any of the foregoing, except Operator's copy of this
Agreement and of any correspondence between the parties and any other documents
which Operator reasonably needs for compliance with any provision of law.

         H. Operator and the Controlling Principals shall comply with the
non-competition covenants and the restrictions on confidential information
contained in Article XI of this Agreement. Any other person required to execute
similar covenants pursuant to Article XI shall also comply with such covenants.

         I. Operator shall also immediately furnish Licensor an itemized list of
all advertising and sales promotion materials bearing the Proprietary Marks or
any of Licensor's distinctive markings, designs, labels or other marks thereon,
whether located on Operator's premises or under Operator's control at any other
location. Licensor shall have the right to inspect these materials. Licensor
shall have the option, exercisable within thirty (30) days after such
inspection, to purchase any or all of the materials at Operator's cost, or to
require Operator to destroy or properly dispose of such materials. Materials not
purchased by Licensor shall not be utilized by Operator or any other party for
any purpose unless authorized in writing by Licensor.

                                       53

<PAGE>

         J. If Operator operates the Restaurant under a lease for the Restaurant
premises with a third party or, with respect to any lease for equipment used in
the operation of the Licensed Business, Operator shall, at Licensor's option,
assign to Licensor any interest which Operator has in any lease or sublease for
the premises of the Restaurant or any equipment related thereto. Licensor may
exercise such option at or within thirty (30) days after either termination or
(subject to any existing right to renew) expiration of this Agreement. In the
event Licensor does not elect to exercise its option to acquire the lease or
sublease for the Restaurant premises, Operator shall make such modifications or
alterations to the Restaurant premises as are necessary to distinguish the
appearance of the Restaurant from that of other restaurants operating under the
System and shall make such specific additional changes as Licensor may
reasonably request. If Operator fails or refuses to comply with the requirements
of this Section XIX(J), Licensor shall have the right to enter upon the premises
of the Licensed Business, without being guilty of trespass or any other crime or
tort, to make or cause to be made such changes as may be required, at the
expense of Operator, which expense Operator agrees to pay upon demand.

         K. (1) Except as provided in Section XIX(J), Licensor shall have the
option, to be exercised within thirty (30) days after termination or expiration
of this Agreement, to purchase from Operator any or all of the furnishings,
equipment (including any electronic cash register or computer hardware and
software systems not licensed by Licensor), signs, neons, fixtures, awnings,
motor vehicles, supplies, and inventory of Operator related to the operation of
the Restaurant, at Operator's cost or fair market value, whichever is less.
Licensor shall purchase Operator's assets only and shall assume no liabilities
whatsoever, unless otherwise agreed to in writing by the parties. If the parties
cannot agree on the fair market value within thirty (30) days of Licensor's
exercise of its option, the fair market value will be determined by one (1) or
more Qualified Appraisers, selected under the procedures in this Section. If the
fair market value is to be determined by Qualified Appraisers, Licensor and
Operator will each have the opportunity to appoint, at their own expense, a
Qualified Appraiser, within five (5) days following the expiration of the thirty
(30) day period within which Licensor and Operator could not mutually agree on
the fair market value. If either party shall fail to appoint a Qualified
Appraiser within this five (5) day period, the other Qualified Appraiser shall
unilaterally establish the fair market value 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 with this five (5) day period, the two
(2) Qualified Appraisers shall establish the fair market value in a single
written opinion agreed to by both of them. If the two (2) Qualified Appraisers
cannot agree on the fair market value within ten (10) days of the appointment of
the latter of them, the two (2) appointed Qualified Appraisers shall together
appoint a third Qualified Appraiser whose written opinion shall establish a fair
market value between those values established by the first two (2) Qualified
Appraisers. In the event of such appraisal, each party shall bear its own legal
and other costs. If Licensor elects to exercise any option to purchase herein
provided, it shall have the right to set off all amounts due from Operator or
any Controlling Principal to Licensor or any of its Affiliates (including any
costs for the appraisal) and any costs incurred in connection with any escrow
arrangement (including reasonable legal fees) against any payment therefor and
shall pay the remaining amount in cash.

            (2) In addition to the options described above and if Operator owns
the Restaurant premises, Licensor shall have the option, to be exercised at or
within thirty (30) days after termination or expiration of this Agreement, to
purchase the Restaurant premises including

                                       54

<PAGE>

any building thereon, if applicable, for the fair market value of the land and
building, and any or all of the furnishings, equipment, signs, neons, fixtures,
awnings, vehicles, supplies and inventory therein at Operator's cost or fair
market value, whichever is less. Licensor shall purchase assets only and shall
assume no liabilities whatsoever, unless otherwise agreed to in writing by the
parties. If Operator does not own the land on which the Restaurant is operated
and Licensor exercises its option for an assignment of the lease, Licensor may
exercise this option for the purpose of purchasing the building if owned by
Operator and related assets as described above. If the parties cannot agree on
fair market value within thirty (30) days of Licensor's exercise of its Option,
fair market value shall be determined in accordance with the appraisal procedure
described above.

                  (3) With respect to the options described in Sections XIX(J)
and (K)(1) and (2), Operator shall deliver to Licensor, in a form satisfactory
to Licensor, such warranties, deeds, releases of lien, bills of sale,
assignments and such other documents and instruments which Licensor deems
necessary in order to perfect Licensor's title and possession in and to the
properties being purchased or assigned and to meet the requirements of all tax
and government authorities. If, at the time of closing, Operator has not
obtained all of these certificates and other documents, Licensor may, in its
sole discretion, place the purchase price or rent in escrow pending issuance of
and required certificates or documents.

                  (4) The time for closing of the purchase and sale of the
properties described in Section XIX(K)(l) and (2) shall be a date not later than
sixty (60) days after the purchase price is determined by the parties or the
determination of the appraisers, or such date Licensor receives and obtains all
necessary permits and approvals, whichever is later, unless the parties mutually
agree to designate another date. The time for closing on the assignment of the
lease described in Section XIX(J) shall be a date no later than ten (10) days
after Licensor's exercise of its option thereunder unless Licensor is exercising
its options under either Section XIX(K)(1) or (2), in which case the date of the
closing shall be on the same closing date prescribed for such option. Closing
shall take place at Licensor's home office or at such other location as Licensor
may designate.

         L. Licensor shall be entitled to assign any and all of its options in
this Section to any other party without the consent of Operator.

         M. Operator, at the option of Licensor, shall assign to Licensor all
rights to: (i) the telephone numbers of the Restaurant and any related Yellow
Pages(TM) and/or other business listing advertising; and (ii) all e-mail
addresses, URLs, domain names, Internet listings and Internet accounts related
to the Restaurant. Operator shall execute all forms and documents required by
Licensor and any telephone company or any Internet service provider at any time
to transfer such service and numbers to Licensor. Notwithstanding any forms and
documents which may have been executed by Licensor under Section VIII(J),
Operator hereby appoints Licensor its true and lawful agent and attorney-in-fact
with full power and authority for the sole purpose of taking such action as is
necessary to complete such assignment. This power of attorney shall survive the
expiration or termination of this Agreement. Operator shall thereafter use
different telephone numbers, e-mail addresses or listings at or in connection
with any subsequent business conducted by Operator.

                                       55

<PAGE>

                                   ARTICLE XX
                                  MISCELLANEOUS

         A. 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 Operator and             ____________________________________________
the Controlling Principals:         ____________________________________________
                                    ____________________________________________
                                    Attention: _________________________________
                                    Facsimile: _________________________________

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

         C. 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 Operator or the Controlling Principals under this Agreement shall constitute
a waiver by Licensor to enforce any such right, option, duty or power against
Operator or the Controlling Principals, or as to a subsequent breach or default
by Operator or the Controlling Principals. 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
Operator or the Controlling Principals of any terms, provisions, covenants or
conditions of this Agreement.

         D. Whenever this Agreement requires the prior approval or consent of
Licensor, Operator shall make a timely written request to Licensor and such
approval or consent shall be obtained in writing.

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

                                       56

<PAGE>

         F. As used in this Agreement, the term "Force Majeure" shall mean any
act of God, terrorism, strike, lock-out or other industrial disturbance, war
(declared or undeclared), riot, epidemic, fire or other catastrophe, act of any
government and any other similar cause not within the control of the party
affected thereby. If a Force Majeure event shall occur, then Operator shall
continue to be obligated to pay to Licensor any and all amounts that it shall
have duly become obligated to pay in accordance with the terms of this Agreement
prior to the occurrence of any Force Majeure event, and the Indemnitees shall
continue to be indemnified and held harmless by Operator in accordance with
Article XVI. Except as provided in the immediately preceding sentence, none of
the parties hereto shall be held liable for a failure to comply with any terms
and conditions of this Agreement when such failure is caused by an event of
Force Majeure. Upon the occurrence of any event of the type referred to herein,
the party affected thereby shall give prompt notice thereof to the other
parties, together with a description of the event, the duration for which the
party expects its ability to comply with the previsions of the Agreement to be
affected thereby and a plan for resuming operation under the Agreement, which
the party shall promptly undertake and maintain with due diligence. Such
affected party shall be liable for failure to give timely notice only to the
extent of damage actually caused.

         G. Operator and the 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 commended.
Operator and the Controlling Principals hereby waive all questions of personal
jurisdiction for the purpose of carrying out this provision. Operator and the
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. Operator and the 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 the 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 where Licensor's principal place of business is
located at the time any claim, controversy, dispute, or action (without regard
to choice of law rules) arose.

         H. Operator, the Controlling Principals and Licensor acknowledge that
each party's agreement regarding applicable state law and forum set forth in
Section XX(G) above provide 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
Operator, the 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 have been
negotiated for in good faith and are part of the benefit of the bargain
reflected by this Agreement.

                                       57

<PAGE>

         I. Operator, the 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 Operator arising under this Agreement,
including, but not limited to, the payment of monies due hereunder and the
satisfaction of certain training requirements of Licensor, shall occur where
Licensor's principal place of business is located at the time such obligation is
due.

         J. Without limiting any of the foregoing, Operator and each of the
Controlling Principals 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 and
operators conducting business under the System. The standards, specifications,
procedures and rules for such dispute resolution program shall be made part of
the Manuals, and Operator and the 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 Operator,
the 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, Operator and the 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.

         K. Operator and the 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, Operator and the
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.

         L. Licensor, Operator and the 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.

                                       58

<PAGE>

         M. This Agreement may be executed in multiple counterparts, each of
which when so executed shall be an original, and all of which shall constitute
one and the same instrument.

         N. The captions used in connection with the sections and subsections of
this Agreement are inserted only for purpose of reference. Such captions shall
not be deemed to govern, limit, modify or in any other manner affect the scope,
meaning or intent of the provisions of this Agreement or any part thereof nor
shall such captions otherwise be given any legal effect.

         O. Any obligation of Operator or the Controlling Principals that
contemplates performance of such obligation after termination or expiration of
this Agreement or the transfer of any interest of Operator or the Controlling
Principals therein, shall be deemed to survive such termination, expiration or
transfer, including the provisions of this Article XX.

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

         Q. All references herein 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 the
Controlling Principals under this Agreement, all acknowledgments, promises,
covenants, agreements and obligations made or undertaken by Operator in this
Agreement shall be deemed, jointly and severally, undertaken by all of the
Controlling Principals.

         R. 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 Operator, and 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, and
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 XV of this Agreement shall not
discharge or release Operator or any of the Controlling Principals 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. Additionally, Operator and the
Controlling Principals shall pay all court costs and attorneys fees incurred by
Licensor in obtaining any remedy available to Licensor for any violation of this
Agreement.

                                       59

<PAGE>

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

         T. 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 Entity that is controlled
by, controlling or under common control with such person or Entity.

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

         V. 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 Operator, Licensor, Licensor's officers, directors and
personnel and such of Operator's and Licensor's respective successors and
assigns as may be contemplated (and, as to Operator, authorized by Article XV),
any rights or remedies under or as a result of this Agreement.

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

         X. Operator, the 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 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 XXI
                                 ACKNOWLEDGMENTS

         A. Operator 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 Operator. Licensor
expressly disclaims making, and Operator 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. Operator acknowledges that Operator has received, read and
understands this Agreement and the related Attachments and agreements and that
Licensor has afforded Operator

                                       60

<PAGE>

sufficient time and opportunity to consult with advisors selected by Operator
about the potential benefits and risks of entering into this Agreement.

         C. Operator 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. Operator 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.

                   [The following page is the signature page.]

                                       61

<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized representative as of the date
first above written.

                                    LICENSOR:

                                    O'CHARLEY'S INC.,
                                    a Tennessee corporation

                                    By: ________________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                    OPERATOR:

                                    By: ________________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                    CONTROLLING PRINCIPALS:

                                    ____________________________________________
                                    * Name: ____________________________________

                                    ____________________________________________
                                    Name: ______________________________________

                                    ____________________________________________
                                    Name: ______________________________________

*Denotes individual who is Operator's Operating Principal

                                       62

<PAGE>

                                  ATTACHMENT A
                             TO OPERATING AGREEMENT

                            LOCATION AND OPENING DATE

1.       LOCATION

         Pursuant to Section I(B) and II(B)(2) of the Operating Agreement, the
Restaurant shall be located at the following Location:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

2. OPENING DATE

         Pursuant to Section II(H) of the Operating Agreement, the Opening Date
of the Restaurant is ______________, 20___.

2.       RADIUS

         Pursuant to Section I(D) of the Operating Agreement, the radius shall
be a distance of _____ miles.

                                      A-1

<PAGE>

                                  ATTACHMENT B
                             TO OPERATING AGREEMENT

                 STATEMENT OF OWNERSHIP INTERESTS AND PRINCIPALS

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

         Name            Percentage of Ownership/Nature of Interest

         B. The following is a list of each Principal described in and
designated pursuant to Section XX(U) of the Operating Agreement, except those
who have been designated as Controlling Principals, each of whom shall execute
the Confidentiality and Non-Compete Agreement substantially in the form set
forth in Attachment C (see Sections XI(B)(2) and XI(C)(4) of the Operating
Agreement):

         C. The following is a list of all of Operator's Controlling Principals
described in and designated pursuant to Section XX(U) of the Operating
Agreement:

         Name

                                       B-1

<PAGE>

                                  ATTACHMENT C
                             TO OPERATING AGREEMENT

                    CONFIDENTIALITY AND NON-COMPETE AGREEMENT

         This Agreement is made and entered into this ____ day of ___________,
20__, between O'Charley's Inc., a Tennessee corporation ("Licensor"),
_____________________ ("Operator") and _________________________ ("Employee").

                                    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 Operator the limited right to operate a
Restaurant using the System, the Marks and the Trade Secrets for the period
defined in the operating agreement made and entered into as of
__________________, 20___ ("Operating Agreement"), by and among Licensor,
Operator and Operator's Controlling Principals;

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

                                      C-1

<PAGE>

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

         WHEREAS, Operator 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 Operator;

         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 Operator; 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 Operator 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 Operator 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 Operator and then only in
connection with the development and/or operation by Operator of a Restaurant
using the System for so long as Operator 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 Operator and then only to the
limited extent necessary to train or assist other employees of Operator in the
development or operation of a Restaurant using the System.

         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

                                      C-2

<PAGE>

association with Operator, 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 Operator 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 Operator Covenantor will not:

                  a. divert, or attempt to divert, directly or indirectly, any
business, business opportunity or customer of the Operator's Restaurant 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 Operator's employment of such person if
permitted under the Operating Agreement; or

                  c. except with respect to the Restaurant described in the
Operating Agreement and other restaurants operated under operating agreements
between Operator 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, limited liability company, association,
corporation, 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 restaurant business that is of a character and concept
similar to the Restaurant, including, without limitation, a full service varied
menu casual dining restaurant which 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 Operator's interest in the Operating Agreement
or the termination of Covenantor's employment by or association with Operator,
Covenantor will not without the prior written consent of Licensor:

                                      C-3

<PAGE>

                  a. divert or attempt to divert, directly or indirectly, any
business, business opportunity or customer of the Restaurant 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; or

                  c. except with respect to other restaurants operated under
operating agreements between Operator 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, limited liability company,
association, corporation, 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
restaurant business that is of a character and concept similar to the
Restaurant, including, without limitation, a full service varied menu casual
dining restaurant which serves alcoholic beverages through a full-service bar,
which business is, or is intended to be, located within the Location, as such
term is defined in the Operating 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
Operator's interest in the Operating Agreement; or (ii) the time Covenantor
ceases to be employed by or associated with Operator, as applicable.

3.       Miscellaneous

         3.1 Operator 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 the right
to terminate the Operating Agreement, 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 Operator in enforcing this
Agreement.

         3.4 Any failure by Licensor or the Operator 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.

                                      C-4

<PAGE>

         3.5 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE WHERE LICENSOR'S PRINCIPAL PLACE OF
BUSINESS IS LOCATED AT THE TIME SUCH PROCEEDING IS COMMENCED 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 THE 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 OPERATOR 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, Tennessee 37204
                  Attention: Director of Franchising
                  Facsimile: (615) 782-5043

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

                  ____________________________________
                  ____________________________________
                  ____________________________________
                  Attention: _________________________
                  Facsimile: _________________________

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

                  ____________________________________
                  ____________________________________
                  ____________________________________
                  Attention: _________________________
                  Facsimile: _________________________

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

         3.9 The rights and remedies of Licensor under this Agreement are fully
assignable and transferable and shall inure to the benefit of its respective
Affiliates, successors and assigns. The respective obligations of Operator and
Covenantor hereunder may not be assigned by Operator 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 below.

                                    LICENSOR:

                                    O'Charley's Inc.,
                                    a Tennessee corporation

                                    By: ________________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                    OPERATOR:

                                    By: ________________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                    COVENANTOR:

                                    ____________________________________________
                                    Name: ______________________________________

                                      C-7

<PAGE>

                                  ATTACHMENT D
                             TO OPERATING AGREEMENT

                     SOFTWARE LICENSE AND SUPPORT AGREEMENT

         THIS SOFTWARE LICENSE AND SUPPORT AGREEMENT ("License") is entered into
as of the _____ day of __________, 20__ between O'CHARLEY'S INC. ("Licensor")
and __________________________________ ("Operator") (collectively, the
"Parties") pursuant to a Franchise Offering Circular dated ________________,
20___, and Operating Agreement dated ________________, 20___ ("Operating
Agreement") under which Operator will operate a full-service O'Charley's
restaurant (the "Restaurant") located at_______________________________________
_________________________________________

         In consideration of the mutual promises and upon the terms and
conditions set forth in this License and subject to the Operating Agreement, the
parties agree as follows:

1.       Grant of License. Licensor grants to Operator a limited, nonexclusive,
         nontransferable, nonassignable license to use the computer program, in
         object code form, listed in Schedule A to this License (the
         "Software"). Licensor shall have sole and exclusive ownership of all
         right, title, and interest in and to the Software, Modifications (as
         defined below), and all trade secrets and copyrights pertaining
         thereto. No right or license is being conveyed to Operator for use of
         the Software at any other location, and a separate license is required
         for each additional Restaurant at which the Software will be used.
         Schedule A to this License may be updated from time to time by Licensor
         to include enhancements, bug fixes, upgrades or replacements to the
         Software, which Licensor will make available to Operator from time to
         time at a reasonable cost to be determined by Licensor in its sole
         discretion. In no event shall Licensor be obligated to provide Operator
         a copy of any commercial release version of the Software in connection
         with this License. Any copies of the Software that Operator is
         expressly permitted to make under Section 2.1(b), including any
         modifications, suggestions, solutions, improvements, corrections,
         derivatives or otherwise ("Modifications"), developed by Licensor in
         conjunction with Operator, are and shall be the sole and exclusive
         property of Licensor during and after the term of this License.
         Operator shall immediately provide to Licensor a paid-up, nonexclusive,
         irrevocable, worldwide right and license to all Modifications, along
         with a source code copy of all such Modifications, to use, reproduce,
         prepare derivative works and distribute without accounting. Operator
         acknowledges and agrees that Licensor may secure all or any part of the
         Software from third parties. Operator agrees to execute and deliver to
         Licensor any further contracts, agreements or other documents
         reasonably required by Licensor in order to secure its compliance with
         any agreement with such other parties.

2.       License Restrictions

         2.1      Operator agrees that it will not itself, or through any
                  affiliate, agent or other third party:

                                      D-1

<PAGE>

                  (a)      use the Software at any other location other than in
                           the operation of the Restaurant written above;

                  (b)      modify, copy, prepare derivatives of or otherwise
                           reproduce, in any form, all or any part of the
                           Software without the prior written consent of
                           Licensor, and in the event that Licensor grants
                           consent, solely to the extent required for use of the
                           Software in the operation of the Restaurant;

                  (c)      decompile, disassemble, or reverse engineer the
                           Software, in whole or in part;

                  (d)      write or develop any derivative software or any other
                           software program based upon the Software or any
                           Modification thereto;

                  (e)      sell, lease, license or sublicense the Software, or
                           otherwise allow access to the Software by any third
                           party not employed by the Operator;

                  (f)      provide, disclose, divulge or make available to, or
                           permit use of the Software or Modification thereto by
                           any third party without Licensor's prior written
                           consent.

3.       Help Desk Support

         3.1      Help Desk. As part of the Support (as defined in Section 3.2),
                  Licensor will maintain a Help Desk accessible through a
                  toll-free telephone number capable of providing assistance
                  with respect to the Software and use thereof. Such telephone
                  assistance shall be available from 8:00 AM to 5:00 PM CT, on a
                  Monday through Friday basis, subject to national holidays and
                  uncontrolled interruptions. The Help Desk also will be
                  available to receive reports of technical difficulties
                  associated with the Software.

         3.2      Support Fees. For so long as Operator is current in the
                  payment of all Information System Maintenance Charge and Help
                  Desk Support Fees ("Support Fee"), as set forth in Schedule A
                  to this License, Operator will be entitled to support through
                  the Help Desk ("Support"). Support Fees and payment terms set
                  forth in Schedule A to this License may be adjusted or
                  modified by Licensor in January of each calendar year.
                  Licensor shall provide Operator with thirty (30) days' prior
                  written notice of any such adjustment or modification

         3.3      Taxes. Operator agrees to pay or reimburse Licensor for all
                  federal, state, or local sales, use, personal property, VAT,
                  excise, duties, and any other taxes or levies, other than
                  taxes on the net income of Licensor, arising out of this
                  License.

         3.4      Causes Which Are Not Attributable to Licensor. Support will
                  not include services requested as a result of, or with respect
                  to causes which are not attributable to Licensor. These
                  services will be billed to Operator at Licensor's then-current
                  rates. Causes which are not attributable to Licensor include
                  but are not limited to:

                                      D-2

<PAGE>

                  (a)      accident; unusual physical, electrical or
                           electromagnetic stress; neglect; misuse; failure or
                           fluctuation of electric power, air conditioning or
                           humidity control; excessive heating; fire and smoke
                           damage; operation of the Software with other software
                           and hardware; or causes other than ordinary use; or

                  (b)      modification, alteration or addition or attempted
                           modification, alteration or addition of the Software
                           undertaken by persons other than Licensor or
                           Licensor's authorized representatives.

         3.5      Responsibilities of Operator. Licensor's provision of Support
                  to Operator is subject to the prompt documentation and report
                  of all errors or malfunctions of the Software to Licensor.
                  Operator shall take all steps necessary to carry out
                  procedures for the rectification of errors or malfunctions
                  within a reasonable time after such procedures have been
                  received from Licensor. Operator shall maintain a current
                  backup copy of all programs and data. Operator shall properly
                  train its personnel in the use and application of the
                  Software.

4.       Term and Termination. Licensor's provision of Support to Operator will
         commence on the date the Restaurant opens to the public and will
         continue for an initial term of one (1) year. Support will
         automatically renew at the end of the initial term and any subsequent
         term for a renewal term of one (1) year unless either party has
         provided the other party with a written termination notice of its
         intention not to renew the Support at least ninety (90) days prior to
         the expiration of the then-current term. Termination of Support upon
         failure to renew will not affect the license of the Software.

5.       Limitation of Liability

         5.1      Disclaimer. LICENSOR MAKES NO WARRANTIES, WHETHER EXPRESS,
                  IMPLIED, OR STATUTORY REGARDING OR RELATING TO THE SOFTWARE OR
                  ANY UPDATES OR UPGRADES THERETO, OR ANY MATERIALS OR SERVICES
                  FURNISHED OR PROVIDED TO OPERATOR UNDER THIS AGREEMENT,
                  INCLUDING MAINTENANCE AND SUPPORT. LICENSOR EXPRESSLY AND
                  SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF
                  MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, RESULTS,
                  WORKMANLIKE EFFORT, COURSE OF DEALING AND TITLE, AND
                  NONINFRINGEMENT WITH RESPECT TO THE SOFTWARE AND SAID OTHER
                  MATERIALS AND SERVICES, AND WITH RESPECT TO THE USE OF ANY OF
                  THE FOREGOING. ALSO, THERE IS NO WARRANTY, DUTY OR CONDITION
                  OF TITLE, QUIET ENJOYMENT, QUIET POSSESSION, CORRESPONDENCE TO
                  DESCRIPTION OR NONINFRINGEMENT. ALL SUCH WARRANTIES ARE
                  EXPRESSLY AND SPECIFICALLY DISCLAIMED.

         5.2      Limitation of Liability. IN NO EVENT WILL LICENSOR BE LIABLE
                  FOR ANY LOSS OF PROFITS, LOSS OF USE, BUSINESS INTERRUPTION,
                  LOSS OF DATA, COST OF COVER OR INDIRECT, SPECIAL, INCIDENTAL
                  OR

                                      D-3

<PAGE>

                  CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, BUT NOT LIMITED
                  TO, DAMAGES FOR: LOSS OF PROFITS, LOSS OF CONFIDENTIAL OR
                  OTHER INFORMATION, BUSINESS INTERRUPTION, PERSONAL INJURY,
                  LOSS OF PRIVACY, FAILURE TO MEET ANY DUTY (INCLUDING OF GOOD
                  FAITH OR OF REASONABLE CARE), NEGLIGENCE, AND ANY OTHER
                  PECUNIARY OR OTHER LOSS WHATSOEVER), ARISING OUT OR IN ANY WAY
                  RELATED TO THE FURNISHING, PERFORMANCE OR USE OF THE SOFTWARE,
                  SERVICES PERFORMED HEREUNDER, THE PROVISION OF OR FAILURE TO
                  PROVIDE SUPPORT SERVICES, WHETHER ALLEGED AS A BREACH OF
                  CONTRACT OR TORTIOUS CONDUCT, INCLUDING NEGLIGENCE, EVEN IF
                  LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
                  IN ADDITION, LICENSOR WILL NOT BE LIABLE FOR ANY DAMAGES
                  CAUSED BY DELAY IN DELIVERY OR FURNISHING THE SOFTWARE OR SAID
                  SERVICES. LICENSOR'S LIABILITY UNDER THIS AGREEMENT FOR
                  DIRECT, INDIRECT, SPECIAL, INCIDENTAL AND/OR CONSEQUENTIAL
                  DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION,
                  RESTITUTION, WILL NOT, IN ANY EVENT, EXCEED THE SUPPORT FEES
                  PAID BY OPERATOR TO LICENSOR UNDER THIS AGREEMENT. THE
                  FOREGOING LIMITATIONS, EXCLUSIONS AND DISCLAIMERS SHALL APPLY
                  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EVEN IF ANY
                  REMEDY FAILS ITS ESSENTIAL PURPOSE.

         5.3      Operator Indemnity. Operator shall indemnify and hold Licensor
                  harmless from and against any costs, losses, liabilities and
                  expenses (including reasonable attorneys fees) arising out of
                  third party claims related to Operator's use of the Software
                  under this License.

         5.4      No Other Warranty. No employee, agent, representative or
                  affiliate of Licensor has authority to bind Licensor to any
                  oral representations or warranty concerning the Software. Any
                  written representation or warranty not expressly contained in
                  this License will not be enforceable.

6.       Indemnification for Infringement

         6.1      Indemnity. Licensor shall, at its expense, defend or settle
                  any claim, action or allegation brought against Operator that
                  the Software infringes any United States patent, copyright or
                  trade secret of any third party and shall pay any final
                  judgments awarded or settlements entered into; provided that,
                  Operator gives prompt written notice to Licensor of any such
                  claim, action or allegation of infringement and gives Licensor
                  the authority to proceed as contemplated herein. Licensor will
                  have the exclusive right to defend any such claim, action or
                  allegation and make settlements thereof at its own discretion,
                  and Operator may not settle or compromise such claim, action
                  or allegation, except with prior written consent of Licensor.
                  Operator shall give such assistance and information as
                  Licensor may reasonably require to

                                      D-4

<PAGE>

                  settle or oppose such claims. In the event any such
                  infringement, claim, action or allegation is brought or
                  threatened, Licensor may, at its sole option and expense:

                  (a)      procure for Operator the right to continue use of the
                           Software or infringing part thereof; or

                  (b)      modify or amend the Software or infringing part
                           thereof, or replace the Software or infringing part
                           thereof with other software having substantially the
                           same or better capabilities; or, if neither of the
                           foregoing is commercially practicable,

                  (c)      terminate this License.

         6.2      Exclusions. The foregoing obligations shall not apply to the
                  extent the infringement arises as a result of (a)
                  modifications to the Software made by any party other than
                  Licensor or Licensor's authorized representative, (b) use of
                  other than the latest release of the Software, or (c) the
                  combination or use of the Software with materials not
                  furnished by Licensor.

         6.3      Sole Obligation. The foregoing states the entire liability of
                  Licensor with respect to infringement of any patent,
                  copyright, trade secret or other proprietary right.

7.       Confidential Information

         7.1      Obligations of Confidentiality. Each party acknowledges that
                  the Software and any Modifications constitute valuable trade
                  secrets and confidential information of the Licensor, and
                  Operator agrees that it shall use the Software, Modifications
                  and any related documentation solely in accordance with the
                  provisions of this License and will not disclose, or permit to
                  be disclosed, the same, directly or indirectly, to any third
                  party without Licensor's prior written consent. Operator
                  agrees to exercise due care in protecting the Software,
                  Modifications, and related documentation from unauthorized use
                  and disclosure, including at a minimum, giving instructions to
                  Operator's "need-to-know" employees who may have access to the
                  Software, Modifications or related documentation that the same
                  are proprietary to, and the trade secrets of, Licensor. At
                  Licensor's request, Operator shall require and obtain
                  execution of covenants concerning the confidentiality of the
                  Software from any persons employed by Operator who have access
                  to the Software. These covenants shall be in a form
                  substantially similar to the confidential covenants contained
                  in Attachment D to the Operating Agreement.

         7.2      Injunctive Relief. The parties agree that in the event of
                  actual or threatened breach of the provisions of Section 7.1
                  by Operator, Licensor will have no adequate remedy at law and
                  will be entitled to immediate and injunctive and other
                  equitable relief, without bond and without the necessity of
                  showing actual money damages.

                                      D-5

<PAGE>

8.       Term and Termination

         8.1      Term. The Term of this License shall be co-extensive with the
                  term of the Operating Agreement, including any renewal of the
                  Operating Agreement. Expiration or termination of the
                  Operating Agreement for whatever reason shall automatically
                  terminate this License and the right to use the Software,
                  without notice to Operator. In addition, Licensor may, in its
                  sole discretion, immediately terminate this License upon the
                  failure by Operator to comply with any of the terms and
                  conditions herein.

         8.2      Effect of Termination. Upon expiration or termination of this
                  License or upon the expiration or termination of the Operating
                  Agreement, whichever shall occur earlier, Operator shall
                  immediately deliver to Licensor all copies of the Software,
                  any Modifications thereto, and any related documentation then
                  in Operator's possession or control, erase the software from
                  Operator's computer system, and shall immediately cease to use
                  the Software. Sections 5-10 will survive termination of this
                  License for any reason. Termination of this License will not
                  affect the terms of the Operating Agreement, Operator's duties
                  or obligations under Section 7 of this License, provisions
                  relating to the payment of amounts due, or provisions limiting
                  or disclaiming Licensor's liability, which provisions will
                  survive termination of this License.

9.       Non-assignment/Binding Agreement. Neither this License nor any rights
         under this License may be assigned or otherwise transferred by
         Operator, in whole or in part, whether voluntary or by operation of
         law, without the prior written consent of Licensor, and any purported
         transfer shall be null and void. Subject to the foregoing, this License
         will be binding upon and will inure to the benefit of the parties and
         their respective successors and assigns.

10.      Miscellaneous

         10.1     Force Majeure. Neither party will incur any liability to the
                  other party on account of any loss or damage resulting from
                  any delay or failure to perform all or any part of this
                  License if such delay or failure is caused, in whole or in
                  part, by events, occurrences, or causes beyond the control and
                  without negligence of the parties. Such events, occurrences,
                  or causes will include, without limitation, acts of God,
                  strikes, lockouts, riots, acts of war, terrorism, earthquakes,
                  fire and explosions, but the inability to meet financial
                  obligations is expressly excluded.

         10.2     Waiver. Any waiver of the provisions of this License or of a
                  party's rights or remedies under this License must be in
                  writing to be effective. Failure, neglect, or delay by a party
                  to enforce the provisions of this License or its rights or
                  remedies at any time, will not be construed and will not be
                  deemed to be a waiver of such party's rights under this
                  License and will not in any way affect the validity of the
                  whole or any part of this License or prejudice such party's
                  right to take subsequent action. Except as expressly stated in
                  this License, no exercise or enforcement by either party of
                  any right or remedy under this License will

                                      D-6

<PAGE>

                  preclude the enforcement by such party of any other right or
                  remedy under this License or that such party is entitled by
                  law to enforce.

         10.3     Severability. If any term, condition, or provision in this
                  License is found to be invalid, unlawful or unenforceable to
                  any extent, the parties shall endeavor in good faith to agree
                  to such amendments that will preserve, as far as possible, the
                  intentions expressed in this License. If the parties fail to
                  agree on such an amendment, such invalid term, condition or
                  provision will be severed from the remaining terms, conditions
                  and provisions, which will continue to be valid and
                  enforceable to the fullest extent permitted by law.

         10.4     Counterparts. This License may be executed in counterparts,
                  each of which so executed will be deemed to be an original and
                  such counterparts together will constitute one and the same
                  agreement .

         10.5     Applicable Law; Jurisdiction. This License will be interpreted
                  and construed in accordance with the laws of the State of
                  Tennessee and the United States of America, without regard to
                  conflict of law principles. All disputes arising out of this
                  License shall be subject to the exclusive jurisdiction and
                  venue of the state and federal courts of Davidson County,
                  Nashville, Tennessee, and the parties consent to the exclusive
                  and personal jurisdiction of these courts.

         10.6     Headings. Section and Schedule headings are for ease of
                  reference only and do not form part of this License.

         10.7     Notices. Any notice required or permitted under the terms of
                  this License or required by law must be in writing and
                  properly posted to the appropriate address set forth in the
                  Operating Agreement.

         10.8     Entire Agreement. This License and any Schedule attached
                  hereto contain the entire agreement of the parties with
                  respect to the subject matter of this License and supersede
                  all previous communications, representations, understandings
                  and agreements, either oral or written, between the parties
                  with respect to said subject matter. This License may not be
                  amended, except by a writing signed by both parties.

                  (remainder of page intentionally left blank)

                                      D-7

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this License.

                                    LICENSOR:

                                    O'Charley's Inc.,
                                    a Tennessee corporation

                                    By: ________________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                    OPERATOR:

                                    By: ________________________________________
                                        Name: __________________________________
                                        Title: _________________________________

                                      D-8

<PAGE>

                                   SCHEDULE A

                    TO SOFTWARE LICENSE AND SUPPORT AGREEMENT

                             SUPPORT AND MAINTENANCE

Operator is receiving ____ copy or copies of the Chux Operations Assistant
("COA") software.

The Support Fee for the COA Software shall be included in the $6,300 per year
Information System Maintenance Charge and Help Desk Support Fee, as set forth in
the Franchise Offering Circular. The Support fee will be due and payable on the
tenth (10th) day of each month, said payment to be made in full through
electronic funds transfer.

The Help Desk and Support Fees specified in this Schedule A are subject to
change, at Licensor's sole discretion, in January of each calendar year.
Licensor shall provide Operator with thirty (30) days' prior written notice of
any such change.

                                      D-9

<PAGE>

                                  ATTACHMENT E
                             TO OPERATING AGREEMENT

                     ELECTRONIC FUND TRANSFER AUTHORIZATION

                   Authorization To Honor Charges Drawn By And
                    Payable To O'Charley's Inc. ("Licensor")

         Depositor hereby authorizes and requests ______________________________
(the "Depository") to initiate debit and credit entries to Depositor's checking
account/savings account (select one) indicated below drawn by and payable to the
order of Licensor by Electronic Fund Transfer provided there are sufficient
funds in said account to pay the amount upon presentation.

         Depositor agrees that the Depository's rights with respect to each such
charge shall be the same as if it were a check drawn on the Depository and
signed by Depositor. Depositor further agrees that if any such charge is
dishonored, whether with or without cause and whether intentionally or
inadvertently, the Depository shall be under no liability whatsoever.

Depository Name:

City: _____________________ State: ________________________ Zip Code: _________

Transit/ABA Number: _________________  Account Number: ________________________

         This authority is to remain in full force and effect until Licensor and
Depository have received at least thirty (30) days written notification from
Depositor of its termination to afford Licensor and Depository a reasonable
opportunity to act on such request.

Depositor:        (Please Print)

___________________________________________

___________________________________________

___________________________________________
Date Signed

___________________________________________

___________________________________________
Signature(s) of Depositor, as Printed Above

Please attach a voided blank check, for purpose of setting up Bank and Transit
Numbers

                                      E-1

<PAGE>

                                  ATTACHMENT F
                             TO OPERATING AGREEMENT

                                    GUARANTY

         Each of the undersigned acknowledges and agrees as follows:

         (1) Each has read the terms and conditions of the Operating Agreement
dated as of ____________, 20___, by and among O'Charley's Inc., a Tennessee
corporation, ____________ and each of the undersigned (the "Operating
Agreement") and acknowledges that the execution of this guaranty and the
undertakings of the Controlling Principals in the Operating Agreement are in
partial consideration for, and a condition to, the granting of the license under
the Operating Agreement, and that Licensor would not have granted this license
without the execution of this guaranty and such undertakings by each of the
undersigned;

         (2) Each is included in the term the "Controlling Principals" as
described in Section XX(U) of the Operating Agreement;

         (3) Each individually, jointly and severally, makes all of the
representations, warranties, covenants and agreements of the Controlling
Principals set forth in the Operating 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
Operator's obligations under the Operating Agreement will be punctually paid and
performed. Upon default by Operator or upon notice from Licensor, each will
immediately make each payment and perform each obligation required of Operator
under the Operating 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 Operator or settle, adjust or compromise any
claims that Licensor may have against Operator. 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 Operator, any default by
Operator or any guarantor and any release of any guarantor or other security for
this guaranty or the obligations of Operator. Licensor may pursue its rights
against any of the Controlling Principals without first exhausting its remedies
against Operator 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 Operating 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 guaranty are made and given in partial
consideration of, and as a condition to, Licensor's grant of

                                      F-1

<PAGE>

rights to operate the Restaurant as described herein. The Operating Principal
individually jointly and severally, makes all of the covenants, representations
and agreements of Operator and the Operating Principal set forth in the
Operating Agreement and is obligated to perform hereunder.

                                    THE CONTROLLING PRINCIPALS:

                                    ____________________________________________
                                    *Name: _____________________________________

                                    ____________________________________________
                                    Name: ______________________________________

                                    ____________________________________________
                                    Name: ______________________________________

*Denotes individual who is Operator's Operating Principal

                                      F-2<PAGE>

                                                                   EXHIBIT 10.29

                  FIRST AMENDMENT TO STOCK REDEMPTION AGREEMENT

         This is the First Amendment to the Stock Redemption Agreement dated
September 10, 2003, by and among MERITAGE HOSPITALITY GROUP INC., a Michigan
corporation whose address is 1971 East Beltline Ave., N.E., Suite 200, Grand
Rapids, Michigan 49525 ("MERITAGE"), and ROBERT E. RILEY ("RILEY") and PAULA R.
RILEY, husband and wife, whose address is 6752 Turnberry Dr., S.E., Grand
Rapids, Michigan 49546 (collectively "THE RILEY'S").

         FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is
hereby acknowledged, the parties agree to the following amendments to the Stock
Redemption Agreement dated September 10, 2003:

         1. Paragraph 8 is amended such that the "PRIVATE PLACEMENT" as defined
therein now includes the revised placement as more fully described in Supplement
No. 1 to Private Placement Memorandum of Meritage Hospitality Group Inc.
attached hereto as Exhibit A. Accordingly, any reference to a closing on the
sale of units under the Private Placement shall now include the sale of units,
Series B Convertible Preferred Shares, or a combination of both.

         2. All remaining terms and conditions of the Stock Redemption Agreement
shall remain in full force and effect.

         This First Amendment has been executed and delivered on behalf of
Meritage and the Riley's to be effective on the date set forth below.

MERITAGE HOSPITALITY GROUP INC.

_________________________________
James R. Saalfeld, Vice President
12-19-03

_________________________________                _______________________________
Robert E. Riley                                  Paula R. Riley
12-19-03                                         12-19-03

                                       1

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