Common use of Duties of Developer Clause in Contracts

Duties of Developer. A. Developer and the Controlling Principals, as applicable, make the following representations, warranties and covenants and accept the following obligations: (1) If Developer is a corporation, limited liability company, partnership or other Entity, Developer make the following representations, warranties and covenants to Licensor: (a) Developer is duly organized and validly existing under the state law of its formation. (b) Developer is duly qualified and is authorized to do business in each jurisdiction in which its business activities or the nature of the properties owned by it require such qualification. (c) Developer's corporate charter, written operating agreement or written partnership agreement shall at all times provide that the activities of Developer are confined exclusively to the development and operation of O'Charley's restaurants. Unless otherwise consented to by Licensor in writing, Developer shall not use the Proprietary Marks as part of its corporate or other legal name, and, in any event, shall obtain Licensor's approval of such corporate or other legal name prior to applying for or filing it with the applicable government authority. (d) The execution of this Agreement and the consummation of the transactions contemplated hereby are within Developer's corporate power, if Developer is a corporation, are permitted under Developer's articles of organization and written operating agreement and have been duly authorized by Developer, if Developer is a limited liability company, are permitted under Developer's written partnership agreement and have been duly authorized by Developer, if Developer is a partnership. (e) If Developer is a corporation, copies of Developer's Articles of Incorporation, Bylaws, other governing documents, any amendments thereto, resolutions of the Board of Directors authorizing entry into and performance of this Agreement and any certificates, buy-sell agreements or other documents restricting the sale or transfer of stock of the corporation, and any other documents as may be reasonably required by Licensor, shall have been furnished to Licensor prior to the execution of this Agreement; if Developer is a limited liability company, copies of Developer's articles of organization, operating agreement, any buy-sell agreements or other documents restricting the sale or transfer of interests in the limited liability company, and any other governing documents and any amendments thereto shall have been furnished to Licensor prior to the execution of this Agreement; or, if Developer is a partnership, copies of Developer's written partnership agreement, any buy-sell agreements or other documents restricting the sale or transfer of interests in the partnership, and any other governing documents and any amendments thereto shall be furnished to Licensor prior to the execution of this Agreement. Developer shall also provide to Licensor evidence of consent or approval of the entry into and performance of this Agreement by the requisite number or percentage of shareholders, members or partners, if such approval or consent is required by statute or by Developer's Articles of Incorporation, Bylaws, articles of organization, operating agreement, written partnership agreement or other governing documents, as applicable. (f) If Developer is a corporation, limited liability company or partnership, the ownership interests in Developer are accurately and completely described in Attachment D. Further, if Developer is a corporation, Developer shall maintain at all times a current list of all owners of record and all beneficial owners of any class of voting securities in Developer, if Developer is a limited liability company, Developer shall maintain at all times a current list of all owners of an interest in the limited liability company, or, if Developer is a partnership, Developer shall maintain at all times a current list of all owners of an interest in the partnership. Developer shall immediately provide a copy of the updated list to Licensor upon the occurrence of any change of ownership and otherwise shall make its list of owners available to Licensor upon request. (g) If, after the execution of this Agreement, any person ceases to qualify as a Principal, or if any individual succeeds to or otherwise comes to occupy a position which would, upon designation by Licensor, qualify him as a Principal, Developer shall notify Licensor within five (5) days after any such change and, upon designation of such person by Licensor as a Principal, or as a Controlling Principal, as the case may be, such person shall execute such documents and instruments (including, as applicable, this Agreement) as may be required by Licensor to be executed by others in such positions. (h) If Developer is a corporation, Developer shall maintain stop-transfer instructions against the transfer on its records of any of its equity and voting securities and each certificate representing an equity or voting security of the corporation shall have conspicuously endorsed upon it a statement, in a form satisfactory to Licensor, that it is held subject to all restrictions imposed upon assignments by this Agreement; provided, however, that the requirements of this Section VI(A)(1)(h) shall not apply to the transfer of equity securities of a Publicly-Held Entity that is otherwise approved to be the Operator. If Developer is a limited liability company, its operating agreement shall provide that ownership of an interest in the limited liability company is held subject to all restrictions imposed upon assignments by this Agreement. If Developer is a partnership, its written partnership agreement shall provide that ownership of an interest in the partnership is held subject to all restrictions imposed upon assignments by this Agreement. (i) Developer and each of the Controlling Principals have provided Licensor with the most recent financial statements of Developer and each of the Controlling Principals. Developer shall provide an annual balance sheet, income statement, statement of shareholders' equity and statement of cash flows in the form prescribed by Licensor (which may be unaudited, unless otherwise requested or required by Licensor) within one hundred twenty (120) days after Developer's fiscal year end. Such financial statements present fairly the financial position of Developer and each of the Controlling Principals, as applicable, at the dates indicated therein and with respect to Developer, the results of its operations, cash flow and owners' equity for the years then ended. Developer agrees that it shall maintain at all times during the term of this Agreement, sufficient working capital to fulfill its obligations under this Agreement. Each of the financial statements mentioned above shall be certified as true, complete and correct by Developer's treasurer or chief financial officer (or by the applicable Controlling Principal, as appropriate) and shall have been prepared in conformity with generally accepted accounting principles consistently applied to all applicable periods involved. Developer's treasurer or chief financial officer shall deliver to Licensor, simultaneously with the financial statements mentioned above, a certificate certifying that Developer is not in default of any of Developer's financial covenants or monetary obligations with any of Developer's lenders or financing sources. No material liabilities, adverse claims, commitments or obligations of any nature exist as of the date of this Agreement, whether accrued, unliquidated, absolute, contingent or otherwise, which are not reflected as liabilities on the financial statements of Developer or such Controlling Principals or otherwise appropriately disclosed in the notes thereto. (j) Each of the Principals, except 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 to this Agreement (see Sections IX(B)(2) and IX(I)). The Controlling Principals shall jointly and severally guarantee Developer's performance of all of Developer's obligations (including, but not limited to, the payment of fees), covenants and agreements described in this Agreement pursuant to the terms and conditions of the guaranty attached hereto as Attachment E, and do otherwise bind themselves to the terms of this Agreement as stated herein. (k) Developer and the Controlling Principals acknowledge and agree, jointly and severally, that the representations, warranties, covenants and agreements set forth above in Section VI(A)(l)(a)-(j) are continuing obligations of Developer and the Controlling Principals, as applicable. Developer and each Controlling Principal will cooperate with Licensor in any efforts made by Licensor to verify compliance with such representations, warranties, covenants and agreements. (2) Upon the execution of this Agreement, Developer shall designate and retain an individual to serve as Operating Principal of Developer ("Operating Principal"). If Developer is an individual, Developer shall perform all obligations of Operating Principal. Operating Principal shall, during the entire period he serves as such, meet the following qualifications: (a) Operating Principal may, at Operating Principal's option, and, subject to the approval of Licensor, designate an individual to perform the duties and obligations of Operating Principal described herein; provided, however that Operating Principal shall ensure that such designee meets all the requirements for an Operating Principal outlined below, conducts and fulfills all of the Operating Principal's obligations in accordance with the terms of this Agreement; provided, further, Operating Principal shall remain fully responsible for any such performance. (b) Operating Principal must maintain a direct ownership interest in the Developer satisfactory to Licensor. Except as may otherwise be provided in this Agreement, Operating Principal's interest in Developer shall be and shall remain free of any pledge, mortgage, hypothecation, lien, charge, encumbrance, voting agreement, proxy, security interest or purchase right or options. (c) Developer and Operating Principal (or his designee, as applicable) shall devote their full time and best efforts to the supervision and conduct of the business contemplated by this Agreement. Operating Principal shall execute this Agreement as one of the Controlling Principals, and shall be individually, jointly and severally with the Developer and the other Controlling Principals, bound by all obligations of Developer, the Operating Principal and the Controlling Principals hereunder. (d) Operating Principal (or his designee, as applicable) shall meet Licensor's standards and criteria for such individual (including, but not limited to, educational, financial and operational experience criteria prescribed by Licensor), as set forth in the Manuals (as defined in the Operating Agreement) or as otherwise communicated by Licensor to Operator from time to time. (e) If during the term of this Agreement Operating Principal (or any designee) is not able to continue to serve in the capacity of Operating Principal or no longer qualifies to act as such in accordance with this Section, Developer shall notify Licensor within ten (10) days and shall designate a replacement within sixty (60) days after Operating Principal (or any designee) ceases to serve or be so qualified, such replacement being subject to the same qualifications and restrictions listed above. Developer shall provide for interim management of the activities contemplated under this Agreement until such replacement is so designated, such interim management is to be conducted in accordance with this Agreement.

Duties of Developer. A. Developer and the Controlling Principals, as applicable, make the following representations, warranties and covenants and accept the following obligations: (1) If Developer is a corporation, limited liability company, partnership or other Entity, Developer make the following representations, warranties and covenants to Licensor: (a) Developer is duly organized and validly existing under the state law of its formation. (b) Developer is duly qualified and is authorized to do business in each jurisdiction in which its business activities or the nature of the properties owned by it require such qualification. (c) Developer's corporate charter, written operating agreement or written partnership agreement shall at all times provide that the activities of Developer are confined exclusively to the development and operation of O'Charley's restaurants. Unless otherwise consented to by Licensor in writing, Developer shall not use the Proprietary Marks as part of its corporate or other legal name, and, in any event, shall obtain Licensor's approval of such corporate or other legal name prior to applying for or filing it with the applicable government authority. (d) The execution of this Agreement and the consummation of the transactions contemplated hereby are within Developer's corporate power, if Developer is a corporation, are permitted under Developer's articles of organization and written operating agreement and have been duly authorized by Developer, if Developer is a limited liability company, or are permitted under Developer's written partnership agreement and have been duly authorized by Developer, if Developer is a partnership. (e) If Developer is a corporation, copies of Developer's Articles of Incorporation, Bylaws, other governing documents, any amendments thereto, resolutions of the Board of Directors authorizing entry into and performance of this Agreement and any certificates, buy-sell agreements or other documents restricting the sale or transfer of stock of the corporation, and any other documents as may be reasonably required by Licensor, shall have been furnished to Licensor prior to the execution of this Agreement; if Developer is a limited liability company, copies of Developer's articles of organization, operating agreement, any buy-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 Developer is a partnership, copies of Developer's written partnership agreement, any buy-sell agreements or other documents restricting the sale or transfer of interests in the partnership, and any other governing documents and any amendments thereto shall be have been furnished to Licensor prior to the execution of this Agreement. Developer shall also provide to Licensor evidence of consent or approval of the entry into and performance of this Agreement by the requisite number or percentage of shareholders, members or partners, if such approval or consent is required by statute or by Developer's Articles of Incorporation, Bylaws, articles of organization, operating agreement, written partnership agreement or other governing documents, as applicable. (f) If Developer is a corporation, limited liability company or partnership, the ownership interests in Developer are accurately and completely described in Attachment D. Further, if Developer is a corporation, Developer shall maintain at all times a current list of all owners of record and all beneficial owners of any class of voting securities in Developer, if Developer is a limited liability company, Developer shall maintain at all times a current list of all owners of an interest in the limited liability company, or, if Developer is a partnership, Developer shall maintain at all times a current list of all owners of an interest in the partnership. Developer shall immediately provide a copy of the updated list to Licensor upon the occurrence of any change of ownership and otherwise shall make its list of owners available to Licensor upon request. (g) If, after the execution of this Agreement, any person ceases to qualify as a Principal, or if any individual succeeds to or otherwise comes to occupy a position which would, upon designation by Licensor, qualify him as a Principal, Developer shall notify Licensor within five (5) days after any such change and, upon designation of such person by Licensor as a Principal, or as a Controlling Principal, as the case may be, such person shall execute such documents and instruments (including, as applicable, this Agreement) as may be required by Licensor to be executed by others in such positions. (h) If Developer is a corporation, Developer shall maintain stop-transfer instructions against the transfer on its records of any of its equity and voting securities and each certificate representing an equity or voting security of the corporation shall have conspicuously endorsed upon it a statement, in a form satisfactory to Licensor, that it is held subject to all restrictions imposed upon assignments by this Agreement; provided, however, that the requirements of this Section VI(A)(1)(h) shall not apply to the transfer of equity securities of a Publicly-Held Entity that is otherwise approved to be the Operator. If Developer is a limited liability company, its operating agreement shall provide that ownership of an interest in the limited liability company is held subject to all restrictions imposed upon assignments by this Agreement. If Developer is a partnership, its written partnership agreement shall provide that ownership of an interest in the partnership is held subject to all restrictions imposed upon assignments by this Agreement. (i) Developer and each of the Controlling Principals Principal have provided Licensor with the most recent financial statements of Developer and each of the Controlling PrincipalsPrincipal. Developer shall provide an annual balance sheet, income statement, statement of shareholders' equity and statement of cash flows in the form prescribed by Licensor (which may be unaudited, unless otherwise requested or required by Licensor) within one hundred twenty (120) days after Developer's fiscal year end. Such financial statements present fairly the financial position of Developer and each of the Controlling PrincipalsPrincipal, as applicable, at the dates indicated therein and with respect to Developer, the results of its operations, cash flow and owners' equity for the years then ended. Developer agrees that it shall maintain at all times during the term of this Agreement, sufficient working capital to fulfill its obligations under this Agreement. Each of the financial statements mentioned above shall be certified as true, complete and correct by Developer's treasurer or chief financial officer (or by the applicable Controlling Principal, as appropriate) and shall have been prepared in conformity with accounting principles generally accepted accounting principles in the United States of America and consistently applied to all applicable periods involved. Developer's treasurer or chief financial officer shall deliver to Licensor, simultaneously with the financial statements mentioned above, a certificate certifying that Developer is not in default of any of Developer's financial covenants or monetary obligations with any of Developer's lenders or financing sources. No material liabilities, adverse claims, commitments or obligations of any nature exist as of the date of this Agreement, whether accrued, unliquidated, absolute, contingent or otherwise, which are not reflected as liabilities on the financial statements of Developer or such Controlling Principals or otherwise appropriately disclosed in the notes thereto. (j) Each of the Principals, except 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 to this Agreement (see Sections IX(B)(2) and IX(I)). The Controlling Principals shall jointly and severally guarantee Developer's performance of all of Developer's obligations (including, but not limited to, the payment of fees), covenants and agreements described in this Agreement pursuant to the terms and conditions of the guaranty attached hereto as Attachment E, and do otherwise bind themselves to the terms of this Agreement as stated herein. (k) Developer and the Controlling Principals acknowledge and agree, jointly and severally, that the representations, warranties, covenants and agreements set forth above in Section VI(A)(l)(a)-(j) are continuing obligations of Developer and the Controlling Principals, as applicable. Developer and each Controlling Principal will cooperate with Licensor in any efforts made by Licensor to verify compliance with such representations, warranties, covenants and agreements. (2) Upon the execution of this Agreement, Developer shall designate and retain an individual to serve as Operating Principal of Developer ("Operating Principal"). If Developer is an individual, Developer shall perform all obligations of Operating Principal. Operating Principal shall, during the entire period he serves as such, meet the following qualifications: (a) Operating Principal may, at Operating Principal's option, and, subject to the approval of Licensor, designate an individual to perform the duties and obligations of Operating Principal described herein; provided, however that Operating Principal shall ensure that such designee meets all the requirements for an Operating Principal outlined below, conducts and fulfills all of the Operating Principal's obligations in accordance with the terms of this Agreement; provided, further, Operating Principal shall remain fully responsible for any such performance. (b) Operating Principal must maintain a direct ownership interest in the Developer satisfactory to Licensor. Except as may otherwise be provided in this Agreement, Operating Principal's interest in Developer shall be and shall remain free of any pledge, mortgage, hypothecation, lien, charge, encumbrance, voting agreement, proxy, security interest or purchase right or options. (c) Developer and Operating Principal (or his designee, as applicable) shall devote their full time and best efforts to the supervision and conduct of the business contemplated by this Agreement. Operating Principal shall execute this Agreement as one of the Controlling Principals, and shall be individually, jointly and severally with the Developer and the other Controlling Principals, bound by all obligations of Developer, the Operating Principal and the Controlling Principals hereunder. (d) Operating Principal (or his designee, as applicable) shall meet Licensor's standards and criteria for such individual (including, but not limited to, educational, financial and operational experience criteria prescribed by Licensor), as set forth in the Manuals (as defined in the Operating Agreement) or as otherwise communicated by Licensor to Operator from time to time. (e) If during the term of this Agreement Operating Principal (or any designee) is not able to continue to serve in the capacity of Operating Principal or no longer qualifies to act as such in accordance with this Section, Developer shall notify Licensor within ten (10) days and shall designate a replacement within sixty (60) days after Operating Principal (or any designee) ceases to serve or be so qualified, such replacement being subject to the same qualifications and restrictions listed above. Developer shall provide for interim management of the activities contemplated under this Agreement until such replacement is so designated, such interim management is to be conducted in accordance with this Agreement.

Duties of Developer. A. Developer and the Controlling Principals, as applicable, make the following representations, warranties and covenants and accept the following obligations: (1) If Developer is a corporation, limited liability company, partnership or other Entity, Developer make the following representations, warranties and covenants to Licensor: (a) Developer is duly organized and validly existing under the state law of its formation. (b) Developer is duly qualified and is authorized to do business in each jurisdiction in which its business activities or the nature of the properties owned by it require such qualification. (c) Developer's corporate charter, written operating agreement or written partnership agreement shall at all times provide that the activities of Developer are confined exclusively to the development and operation of O'Charley's restaurants. Unless otherwise consented to by Licensor in writing, Developer shall not use the Proprietary Marks as part of its corporate or other legal name, and, in any event, shall obtain Licensor's approval of such corporate or other legal name prior to applying for or filing it with the applicable government authority. (d) The execution of this Agreement and the consummation of the transactions contemplated hereby are within Developer's corporate power, if Developer is a corporation, are permitted under Developer's articles of organization and written operating agreement and have been duly authorized by Developer, if Developer is a limited liability company, or are permitted under Developer's written partnership agreement and have been duly authorized by Developer, if Developer is a partnership. (e) If Developer is a corporation, copies of Developer's Articles of Incorporation, Bylaws, other governing documents, any amendments thereto, resolutions of the Board of Directors authorizing entry into and performance of this Agreement and any certificates, buy-sell agreements or other documents restricting the sale or transfer of stock of the corporation, and any other documents as may be reasonably required by Licensor, shall have been furnished to Licensor prior to the execution of this Agreement; if Developer is a limited liability company, copies of Developer's articles of organization, operating agreement, any buy-sell agreements or other documents restricting the sale or transfer of interests in the limited liability company, and any other governing documents and any amendments thereto shall have been furnished to Licensor prior to the execution of this Agreement; or, if Developer is a partnership, copies of Developer's written partnership agreement, any buy-sell agreements or other documents restricting the sale or transfer of interests in the partnership, and any other governing documents and any amendments thereto shall be have been furnished to Licensor prior to the execution of this Agreement. Developer shall also provide to Licensor evidence of consent or approval of the entry into and performance of this Agreement by the requisite number or percentage of shareholders, members or partners, if such approval or consent is required by statute or by Developer's Articles of Incorporation, Bylaws, articles of organization, operating agreement, written partnership agreement or other governing documents, as applicable. (f) If Developer is a corporation, limited liability company or partnership, the ownership interests in Developer are accurately and completely described in Attachment D. Further, if Developer is a corporation, Developer shall maintain at all times a current list of all owners of record and all beneficial owners of any class of voting securities in Developer, if Developer is a limited liability company, Developer shall maintain at all times a current list of all owners of an interest in the limited liability company, or, if Developer is a partnership, Developer shall maintain at all times a current list of all owners of an interest in the partnership. Developer shall immediately provide a copy of the updated list to Licensor upon the occurrence of any change of ownership and otherwise shall make its list of owners available to Licensor upon request. (g) If, after the execution of this Agreement, any person ceases to qualify as a Principal, or if any individual succeeds to or otherwise comes to occupy a position which would, upon designation by Licensor, qualify him as a Principal, Developer shall notify Licensor within five (5) days after any such change and, upon designation of such person by Licensor as a Principal, or as a Controlling Principal, as the case may be, such person shall execute such documents and instruments (including, as applicable, this Agreement) as may be required by Licensor to be executed by others in such positions. (h) If Developer is a corporation, Developer shall maintain stop-transfer instructions against the transfer on its records of any of its equity and voting securities and each certificate representing an equity or voting security of the corporation shall have conspicuously endorsed upon it a statement, in a form satisfactory to Licensor, that it is held subject to all restrictions imposed upon assignments by this Agreement; provided, however, that the requirements of this Section VI(A)(1)(h) shall not apply to the transfer of equity securities of a Publicly-Held Entity that is otherwise approved to be the Operator. If Developer is a limited liability company, its operating agreement shall provide that ownership of an interest in the limited liability company is held subject to all restrictions imposed upon assignments by this Agreement. If Developer is a partnership, its written partnership agreement shall provide that ownership of an interest in the partnership is held subject to all restrictions imposed upon assignments by this Agreement. (i) Developer and each of the Controlling Principals Principal have provided Licensor with the most recent financial statements of Developer and each of the Controlling PrincipalsPrincipal. Developer shall provide an annual balance sheet, income statement, statement of shareholders' equity and statement of cash flows in the form prescribed by Licensor (which may be unaudited, unless otherwise requested or required by Licensor) within one hundred twenty (120) days after Developer's fiscal year end. Such financial statements present fairly the financial position of Developer and each of the Controlling PrincipalsPrincipal, as applicable, at the dates indicated therein and with respect to Developer, the results of its operations, cash flow and owners' equity for the years then ended. Developer agrees that it shall maintain at all times during the term of this Agreement, sufficient working capital to fulfill its obligations under this Agreement. Each of the financial statements mentioned above shall be certified as true, complete and correct by Developer's treasurer or chief financial officer (or by the applicable Controlling Principal, as appropriate) and shall have been prepared in conformity with accounting principles generally accepted accounting principles in the United States of America and consistently applied to all applicable periods involved. Developer's treasurer or chief financial officer shall deliver to Licensor, simultaneously with the financial statements mentioned above, a certificate certifying that Developer is not in default of any of Developer's financial covenants or monetary obligations with any of Developer's lenders or financing sources. No material liabilities, adverse claims, commitments or obligations of any nature exist as of the date of this Agreement, whether accrued, unliquidated, absolute, contingent or otherwise, which are not reflected as liabilities on the financial statements of Developer or such Controlling Principals or otherwise appropriately disclosed in the notes thereto. (j) Each of the Principals, except 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 to this Agreement (see Sections IX(B)(2) and IX(I)). The Controlling Principals shall jointly and severally guarantee Developer's performance of all of Developer's obligations (including, but not limited to, the payment of fees), covenants and agreements described in this Agreement pursuant to the terms and conditions of the guaranty attached hereto as Attachment E, and do otherwise bind themselves to the terms of this Agreement as stated herein. (k) Developer and the Controlling Principals acknowledge and agree, jointly and severally, that the representations, warranties, covenants and agreements set forth above in Section VI(A)(l)(a)-(j) are continuing obligations of Developer and the Controlling Principals, as applicable. Developer and each Controlling Principal will cooperate with Licensor in any efforts made by Licensor to verify compliance with such representations, warranties, covenants and agreements. (2) Upon the execution of this Agreement, Developer shall designate and retain an individual to serve as Operating Principal of Developer ("Operating Principal"). If Developer is an individual, Developer shall perform all obligations of Operating Principal. Operating Principal shall, during the entire period he serves as such, meet the following qualifications: (a) Operating Principal may, at Operating Principal's option, and, subject to the approval of Licensor, designate an individual to perform the duties and obligations of Operating Principal described herein; provided, however that Operating Principal shall ensure that such designee meets all the requirements for an Operating Principal outlined below, conducts and fulfills all of the Operating Principal's obligations in accordance with the terms of this Agreement; provided, further, Operating Principal shall remain fully responsible for any such performance. (b) Operating Principal must maintain a direct ownership interest in the Developer satisfactory to Licensor. Except as may otherwise be provided in this Agreement, Operating Principal's interest in Developer shall be and shall remain free of any pledge, mortgage, hypothecation, lien, charge, encumbrance, voting agreement, proxy, security interest or purchase right or options. (c) Developer and Operating Principal (or his designee, as applicable) shall devote their full time and best efforts to the supervision and conduct of the business contemplated by this Agreement. Operating Principal shall execute this Agreement as one of the Controlling Principals, and shall be individually, jointly and severally with the Developer and the other Controlling Principals, bound by all obligations of Developer, the Operating Principal and the Controlling Principals hereunder. (d) Operating Principal (or his designee, as applicable) shall meet Licensor's standards and criteria for such individual (including, but not limited to, educational, financial and operational experience criteria prescribed by Licensor), as set forth in the Manuals (as defined in the Operating Agreement) or as otherwise communicated by Licensor to Operator from time to time. (e) If during the term of this Agreement Operating Principal (or any designee) is not able to continue to serve in the capacity of Operating Principal or no longer qualifies to act as such in accordance with this Section, Developer shall notify Licensor within ten (10) days and shall designate a replacement within sixty (60) days after Operating Principal (or any designee) ceases to serve or be so qualified, such replacement being subject to the same qualifications and restrictions listed above. Developer shall provide for interim management of the activities contemplated under this Agreement until such replacement is so designated, such interim management is to be conducted in accordance with this Agreement.

Duties of Developer. A. Developer and the Controlling PrincipalsPrincipal, as applicable, make the following representations, warranties and covenants and accept the following obligations: (1) If Developer is a corporation, limited liability company, partnership or other Entity, Developer make the following representations, warranties and covenants to Licensor: (a) Developer is duly organized and validly existing under the state law of its formation. (b) Developer is duly qualified and is authorized to do business in each jurisdiction in which its business activities or the nature of the properties owned by it require such qualification. (c) Developer's corporate charter, written operating agreement or written partnership agreement shall at all times provide that the activities of Developer are confined exclusively to the development and operation of O'Charley's restaurants. Unless otherwise consented to by Licensor in writing, Developer shall not use the Proprietary Marks as part of its corporate or other legal name, and, in any event, shall obtain Licensor's approval of such corporate or other legal name prior to applying for or filing it with the applicable government authority. (d) The execution of this Agreement and the consummation of the transactions contemplated hereby are within Developer's corporate power, if Developer is a corporation, are permitted under Developer's articles of organization and written operating agreement and have been duly authorized by Developer, if Developer is a limited liability company, or are permitted under Developer's written partnership agreement and have been duly authorized by Developer, if Developer is a partnership. (e) If Developer is a corporation, copies of Developer's Articles of Incorporation, Bylaws, other governing documents, any amendments thereto, resolutions of the Board of Directors authorizing entry into and performance of this Agreement and any certificates, buy-sell agreements or other documents restricting the sale or transfer of stock of the corporation, and any other documents as may be reasonably required by Licensor, shall have been furnished to Licensor prior to the execution of this Agreement; if Developer is a limited liability company, copies of Developer's articles of organization, operating agreement, any buy-sell agreements or other documents restricting the sale or transfer of interests in the limited liability company, and any other governing documents and any amendments thereto shall have been furnished to Licensor prior to the execution of this Agreement; or, if Developer is a partnership, copies of Developer's written partnership agreement, any buy-sell agreements or other documents restricting the sale or transfer of interests in the partnership, and any other governing documents and any amendments thereto shall be have been furnished to Licensor prior to the execution of this Agreement. Developer shall also provide to Licensor evidence of consent or approval of the entry into and performance of this Agreement by the requisite number or percentage of shareholders, members or partners, if such approval or consent is required by statute or by Developer's Articles of Incorporation, Bylaws, articles of organization, operating agreement, written partnership agreement or other governing documents, as applicable. (f) If Developer is a corporation, limited liability company or partnership, the ownership interests in Developer are accurately and completely described in Attachment D. Further, if Developer is a corporation, Developer shall maintain at all times a current list of all owners of record and all beneficial owners of any class of voting securities in Developer, if Developer is a limited liability company, Developer shall maintain at all times a current list of all owners of an interest in the limited liability company, or, if Developer is a partnership, Developer shall maintain at all times a current list of all owners of an interest in the partnership. Developer shall immediately provide a copy of the updated list to Licensor upon the occurrence of any change of ownership and otherwise shall make its list of owners available to Licensor upon request. (g) If, after the execution of this Agreement, any person ceases to qualify as a Principal, or if any individual succeeds to or otherwise comes to occupy a position which would, upon designation by Licensor, qualify him as a Principal, Developer shall notify Licensor within five (5) days after any such change and, upon designation of such person by Licensor as a Principal, or as a Controlling Principal, as the case may be, such person shall execute such documents and instruments (including, as applicable, this Agreement) as may be required by Licensor to be executed by others in such positions. (h) If Developer is a corporation, Developer shall maintain stop-transfer instructions against the transfer on its records of any of its equity and voting securities and each certificate representing an equity or voting security of the corporation shall have conspicuously endorsed upon it a statement, in a form satisfactory to Licensor, that it is held subject to all restrictions imposed upon assignments by this Agreement; provided, however, that the requirements of this Section VI(A)(1)(h) shall not apply to the transfer of equity securities of a Publicly-Held Entity that is otherwise approved to be the Operator. If Developer is a limited liability company, its operating agreement shall provide that ownership of an interest in the limited liability company is held subject to all restrictions imposed upon assignments by this Agreement. If Developer is a partnership, its written partnership agreement shall provide that ownership of an interest in the partnership is held subject to all restrictions imposed upon assignments by this Agreement. (i) Developer and each of the Controlling Principals Principal have provided Licensor with the most recent financial statements of Developer and each of the Controlling PrincipalsPrincipal. Developer shall provide an annual balance sheet, income statement, statement of shareholders' equity and statement of cash flows in the form prescribed by Licensor (which may be unaudited, unless otherwise requested or required by Licensor) within one hundred twenty (120) days after Developer's fiscal year end. Such financial statements present fairly the financial position of Developer and each of the Controlling PrincipalsPrincipal, as applicable, at the dates indicated therein and with respect to Developer, the results of its operations, cash flow and owners' equity for the years then ended. Developer agrees that it shall maintain at all times during the term of this Agreement, sufficient working capital to fulfill its obligations under this Agreement. Each of the financial statements mentioned above shall be certified as true, complete and correct by Developer's treasurer or chief financial officer (or by the applicable Controlling Principal, as appropriate) and shall have been prepared in conformity with accounting principles generally accepted accounting principles in the United States of America and consistently applied to all applicable periods involved. Developer's treasurer or chief financial officer shall deliver to Licensor, simultaneously with the financial statements mentioned above, a certificate certifying that Developer is not in default of any of Developer's financial covenants or monetary obligations with any of Developer's lenders or financing sources. No material liabilities, adverse claims, commitments or obligations of any nature exist as of the date of this Agreement, whether accrued, unliquidated, absolute, contingent or otherwise, which are not reflected as liabilities on the financial statements of Developer or such Controlling Principals Principal or otherwise appropriately disclosed in the notes thereto. (j) Each of the PrincipalsPrincipal, except the Controlling PrincipalsPrincipal, shall execute and bind themselves to the confidentiality and non-competition covenants set forth in the Confidentiality and Non-Compete Agreement attached hereto as Attachment C to this Agreement (see Sections IX(B)(2) and IX(I)). The Controlling Principals Principal shall jointly and severally guarantee Developer's performance of all of Developer's obligations (including, but not limited to, the payment of fees), covenants and agreements described in this Agreement pursuant to the terms and conditions of the guaranty attached hereto as Attachment E, and do otherwise bind themselves to the terms of this Agreement as stated herein. (k) Developer and the Controlling Principals Principal acknowledge and agree, jointly and severally, that the representations, warranties, covenants and agreements set forth above in Section VI(A)(l)(a)-(j) are continuing obligations of Developer and the Controlling PrincipalsPrincipal, as applicable. Developer and each Controlling Principal will cooperate with Licensor in any efforts made by Licensor to verify compliance with such representations, warranties, covenants and agreements. (2) Upon the execution of this Agreement, Developer shall designate and retain an individual to serve as Operating Principal of Developer ("Operating Principal"). If Developer is an individual, Developer shall perform all obligations of Operating Principal. Operating Principal shall, during the entire period he serves as such, meet the following qualifications: (a) Operating Principal may, at Operating Principal's option, and, subject to the approval of Licensor, designate an individual to perform the duties and obligations of Operating Principal described herein; provided, however that Operating Principal shall ensure that such designee meets all the requirements for an Operating Principal outlined below, below and conducts and fulfills all of the Operating Principal's obligations in accordance with the terms of this Agreement; provided, further, Operating Principal shall remain fully responsible for any such performance. (b) Operating Principal must maintain a direct or indirect ownership interest in the Developer reasonably satisfactory to Licensor. Except as may otherwise be provided in this Agreement, Operating Principal's interest in Developer shall be and shall remain free of any pledge, mortgage, hypothecation, lien, charge, encumbrance, voting agreement, proxy, security interest or purchase right or options. (c) Developer and Operating Principal (or his designee, as applicable) shall devote their full time and best efforts to the supervision and conduct of the business contemplated by this Agreement. Operating Principal shall execute this Agreement as one of the a Controlling PrincipalsPrincipal, and shall be individually, jointly and severally with the Developer and the other Controlling PrincipalsPrincipal, bound by all obligations of Developer, the Operating Principal and the Controlling Principals Principal hereunder. (d) Operating Principal (or his designee, as applicable) shall meet Licensor's standards and criteria for such individual (including, but not limited to, educational, financial and operational experience criteria prescribed by Licensor), as set forth in the Manuals (as defined in the Operating Agreement) or as otherwise communicated by Licensor to Operator from time to time. (e) If during the term of this Agreement Operating Principal (or any designee) is not able to continue to serve in the capacity of Operating Principal or no longer qualifies to act as such in accordance with this Section, Developer shall notify Licensor within ten (10) days and shall designate a replacement within sixty (60) days after Operating Principal (or any designee) ceases to serve or be so qualified, such replacement being subject to the same qualifications and restrictions listed above. Developer shall provide for interim management of the activities contemplated under this Agreement until such replacement is so designated, such interim management is to be conducted in accordance with this Agreement.