At the moment Fred makes my eye contact it is an unintended give-away to the perp that someone else is present, and if my training holds and I don't freeze I would prepare for the moment that the perp would turn on me, and when he did turn towards me with his weapon swinging my way, I am afraid that I would be forced to shoot him ... instinctively forced to shoot him.
In my state (Michigan) I'm aware I'd probably be arrested, processed, and maybe have all my guns siezed from my house.
But I think that is what I'd end up doing in the scenario you depict.
I'm aware that I should probably take cover and wait it out, but that could be at the risk of seeing Fred killed or losing my life, or both. It is hard to realy say until you're are faced with it, and your scenario doesn't take it to the next few crucial moments....not knowing if the guy just wanted the cash, or if he was a nutty meth kook with no coordination of the trigger finger.......tough call but if I already had the weapon in my hand I'd prepare for Fred's eye contact to give me away.