(a)        The Licensee gives the Licensor written notice of the Licensee’s election to renew not less than six months nor more than 12 months prior to the end of the initial term.

        (b)        The Licensee is not, when notice is given, in material default of any provision of this Agreement or any amendment hereof or successor agreement hereto or in material default of any other agreement between the Licensee and the Licensor or the Licensor’s Affiliates involving any other license agreement and has substantially complied with the terms and conditions of this Agreement and all other such agreements, during the term thereof.

        (c)        All monetary obligations owed by the Licensee to the Licensor or the Licensor’s Affiliates from any source whatsoever (whether under this Agreement or otherwise) have been satisfied prior to renewal.

        (d)        The Licensee executes a license agreement containing the same terms and conditions as this Agreement, except that the license agreement shall provide for a term of up to five years and shall contain the then current royalty rate and the then current national and local advertising expenditure requirements for Non-Traditional License Agreements; provided, however, that in lieu of an initial license fee, the Licensee shall pay a renewal fee to the Licensor in the amount of 20% of the then current initial license fee for a Non-Traditional License Agreement.

        (e)        The Licensee performs such remodeling, repairs, replacements and redecorations as the Licensor may reasonably require to cause the restaurant equipment and

        (f)        The Licensor and the Licensee execute a general release of each other, in a form satisfactory to the Licensor, of any and all claims the Licensee may have against the Licensor and its Affiliates, including (without limitation) all claims arising under any federal, state or local law, rule or ordinance, but excluding (as to the Licensor) any claims against the Licensee for (a) unpaid moneys due the Licensor or its Affiliates, (b) a material breach of the provisions of this Agreement regarding the Proprietary Marks, or (c) the violation of the Licensor’s legal rights regarding the Proprietary Marks. The Licensor may waive the requirements of this paragraph (f) at the Licensor’s election.

        (g)        The Principal Licensee and/or the manager at the Licensee’s expense attend and satisfactorily complete such retraining program as the Licensor may require at its sole discretion. 

        (h)        The Licensee meets the remodeling requirements set forth in Section 6.02(d), below.

        (a)        The Licensee shall submit for evaluation by the Licensor the information the Licensor reasonably may require from time to time to evaluate a proposed site for a Non-Traditional Sonic. The Licensor shall review the submitted information, shall conduct any investigation of the proposed site the Licensor deems necessary or appropriate to evaluate the site, and shall accept or reject the site. The Licensor shall have the right to request any supplemental information it reasonably deems necessary or appropriate to evaluate the proposed site.

        (b)        Within 30 days after the Licensee’s submission of all initial and supplemental information requested by the Licensor regarding the proposed site, the Licensor shall give the Licensee written notice of its acceptance or rejection of the site. If the Licensor accepts the site, the written notice shall set forth any remaining conditions to that acceptance. If the Licensor rejects the site, the written notice shall set forth the primary reasons for the rejection. If the Licensor does not give the Licensee written notice of its rejection of the site within 30 days after the Licensee’s submission of all initial and supplemental information requested by the Licensor regarding the site, the Licensee may deem the Licensor as having approved the site. The Licensee acknowledges that no officer, employee or agent of the Licensor has any authority to approve any proposed site except in writing and in accordance with the provisions of this Section 6. Any other representations, written or oral, shall have no effect.

        (c)        The Licensee shall have sole responsibility for determining the location of the Non-Traditional Sonic and all aspects of the site selection, negotiation and development process, including (without limitation) the investigation and compliance with all applicable zoning, licensing, leasing and other requirements. Neither the Licensor nor any of its Affiliates shall have any responsibility, obligation or liability in connection with the Licensor’s efforts, assistance and/or advice in the selection and securing of a location for the License’s use, nor shall the Licensor have any liability for any consequences of the Licensee’s choice of a site or any aspect of the site selection, negotiation and development process. The Licensee acknowledges that the Licensor’s approval of a site does not constitute any representation, warranty or guaranty by the Licensor that the site will constitute a successful location for a Non-Traditional Sonic, and the Licensee waives and releases the Licensor and its Affiliates from any claims in that regard. The Licensee confirms that, in the absence of its agreement as set forth above, the Licensor would not become involved in any way in the site selection, negotiation or development process.

        (d)        In the event the Non-Traditional Sonic premises suffers some physical casualty, the minimum acceptable quality and appearance for the restored location will be that which existed just prior to the casualty, unless the Non-Traditional Sonic was below minimum acceptable standards for the Licensor at the time of casualty, in which event the Non-Traditional Sonic will be restored to a condition which meets the minimum acceptable standard according to the Licensor.  However, the Licensee agrees to make all reasonable effort to have the restored Non-Traditional Sonic reflect the then current image, design and specifications of Non-Traditional Sonics.  If the Non-Traditional Sonic is substantially destroyed by fire or other casualty, the Licensee may, with the written consent of the Licensor elect to terminate this agreement in lieu of the Licensee reconstructing the restaurant, provided that for a period of 18 months after said election, the Licensee shall not enter into, become landlord of or loan money to any restaurant business within a three-mile radius of the Non-Traditional Sonic which is similar in nature to or competitive with a Sonic drive-in restaurant, Non-Traditional Sonic, or considered a fast food establishment.

        (a)        The Licensee agrees to complete the construction of the Non-Traditional Sonic within a minimum of 365 days after the effective date of this Agreement. Unless the Licensee is remodeling an existing location, the Licensee shall construct the Non-Traditional Sonic in accordance with the site plan approved by the Licensor for such site and with the Licensor’s standard construction plans and specifications, if any (the “Sonic Plans and Specifications”), subject, however, to any alterations thereto that may be required by any applicable law, regulation or ordinance.  If alterations of any kind are required to be made to the site plan, as approved by the Licensor, or to the Sonic Plans and Specifications, if any, for any reason, such alterations must be approved by the Licensor in writing before any work is begun on the Non-Traditional Sonic. The Licensee shall submit the final site layout and construction plans for the Non-Traditional Sonic to the Licensor for its written approval.  Any costs including engineering and architectural fees incurred in obtaining approvals by the appropriate governmental authorities of the construction plans, specifications and layouts shall be paid by the Licensee.

        (b)        If the Licensee is remodeling an existing location, the Licensor shall have the right to inspect and approve all plans and specifications prior to the commencement of any work. The Licensee shall submit the final remodeling plans and specifications for the Non-Traditional Sonic to the Licensor for its written approval.  Nothing in this section shall be construed as an endorsement or guarantee of the conformity of such plans to applicable local, state or federal building or safety codes, or a guarantee that construction will be done in conformity with such approved plans.  In any event, the Licensee shall obtain written approval of such plans or written notice of the Licensor’s waiver of the rights reserved hereunder prior to the commencement of construction.

        (c)        The Licensee shall not deviate from the approved plans and specifications in any manner in the construction or remodeling of the restaurant without the prior written

        (d)        The Licensor may require the Licensee to undertake extensive remodeling and renovation and substantial modifications to its existing improvements necessary for the Licensee’s restaurant to conform with Licensor’s then existing system image. The Licensor may exercise the foregoing right at any time during the term of this Agreement, but may not require (1) the remodeling of the Non-Traditional Sonic more than once every five years or (2) the remodeling of a Non-Traditional Sonic built within the preceding three years, unless the required remodeling will not exceed 15% of the original cost of the improvements and equipment (as adjusted for increases in the consumer price index after the construction date of the Non-Traditional Location). If the Licensor exercises its right to require the Licensee to undertake extensive remodeling or renovation or substantial modification within two years of the end of the term of this Agreement, the Licensee may exercise any right to renew the term of this Agreement at that point in time in accordance with the applicable provisions of this Agreement, which renewal then shall take effect as of the expiration the then current term of this Agreement.

        (a)        The Licensee shall only install in and about the Non-Traditional Sonic such equipment, fixtures, furnishings and other personal property as are required and which strictly conform to the appearance, uniform standards and specifications of the Licensor existing from time to time, which shall be communicated to the Licensee in writing.  The Licensee may purchase the equipment from the Licensor if the Licensor at that time is offering such equipment for sale on a regular basis, but is not required by this or any other agreement to do so.

        (b)        In order to provide maximum exposure of the Sonic name and marks, Licensee shall prominently display and maintain at the Licensee’s own expense signage which complies with the specifications required by the Licensor from time to time and in such location as the Licensor may approve.  The Licensee shall not display any other sign or advertising at the Non-Traditional Sonic without the Licensor’s prior written approval.

        (c)        The Licensee may lease the required signage from the Licensor or may acquire or lease the signage from any other source approved by the Licensor.  The Licensee agrees to require in any lease agreement with the Licensor or other suppliers a clause giving

        (d)        The Licensee hereby agrees that it shall, upon the Licensor’s request, obtain from the landlord of the property at which the Non-Traditional Sonic is located, a landlord’s lien and waiver releasing all claims against any equipment or sign which belongs to the Licensor.

        (e)        If the Licensee is or becomes a lessee of the Non-Traditional Sonic premises, he shall provide the Licensor with a true and correct, complete copy of any such lease, and shall have included therein provisions, in form satisfactory to the Licensor, expressly permitting both the Licensee and the Licensor to take all actions and make all alterations referred to under Section 15.01(c) of this Agreement. Any such lease shall also require the lessor thereunder to give the Licensor reasonable notice of any contemplated termination and a reasonable time in which to take and make the above actions and alterations and provide that the Licensee has the unrestricted right to assign such lease to the Licensor.

        (a)        The Licensee acknowledges the importance of the quality of business operations among all restaurants in the Sonic System and, agrees that it will not allow any of its licensed establishments to be opened or operated without having at least one individual working full time at the Non-Traditional Sonic who has completed the Stage Career Development Program. If the trained individual ceases to work full time at the Non-Traditional Sonic for whatever reason, the Licensee shall have 120 days in which to replace the individual with a person who has completed the Stage Career Development Program.

        (b)        The Licensee shall pay all traveling expenses, living expenses, and any other personal expenses for themselves and their managers while enrolled in the training program. As part of the initial franchise fee paid pursuant to Section 5.01 of this Agreement, the Licensee shall have the right to have one principal and one manager of the Non-Traditional Sonic attend the Stage Career Development Program for no cost other than those set out in the preceding sentence. Any additional parties attending the Stage Career Development Program shall bear the cost, including any fees and tuition due for such training program.

        (a)        The Licensee acknowledges that every component of the Sonic System is important to the Licensor and to the operation of the Non-Traditional Sonic as a Non-Traditional Sonic, including a designated menu of food and beverage products; uniformity of food specifications, preparation methods; quality and appearance; and uniformity of facilities and service.

        (b)        The Licensor shall have the right to inspect the Non-Traditional Sonic at all reasonable times to ensure that the Licensee’s operation thereof is in compliance with the standards and policies of the Sonic System.  In the event that such inspection reveals any deficiency or unsatisfactory condition with respect to any aspect of the operation of the Non-Traditional Location, the Licensee shall, within 72 hours of the Licensee’s receipt of notice of such condition or such other time as the Licensor in its sole discretion may provide, correct or repair such deficiency or unsatisfactory condition if it is correctable or repairable within such time period, and, if not, shall within such time commence such correction or repair and thereafter diligently pursue same to completion. The preceding sentence notwithstanding, the Licensee shall take immediate action to correct or repair any deficiency or unsatisfactory condition which poses a risk to public health or safety. In the event the Licensee fails to comply with the foregoing obligations to correct and repair, the Licensor, upon 24 hours’ notice to the Licensee, shall have the right, without being guilty of trespass or tort, to forthwith make or cause to be made such corrections or repairs, and the expense thereof, including board, wages, lodging and transportation of the Licensor personnel, if utilized, shall be paid by the Licensee upon billing by the Licensor.  The foregoing shall be in addition to any other right or remedies the Licensor may have.

        (c)        The Licensee shall comply with the entire Sonic System as described in this Agreement and in the Sonic Operations Manual for a traditional Sonic drive-in restaurant, except to the extent that the Licensee cannot comply as a practical manner because of the physical layout and structure of the Non-Traditional Sonic. That compliance shall include (without limitation) the following:

        (i)        Operate the Non-Traditional Sonic in a clean, wholesome manner in compliance with prescribed standards of quality, service and cleanliness; comply with all business policies, practices and procedures imposed by the Licensor; and maintain the building, equipment and parking area in a good, clean, wholesome condition and repair, well lighted and in compliance with designated standards as may be prescribed from time to time by the Licensor.

        (ii)        Purchase and install kitchen fixtures, lighting and other equipment and signs in accordance with the equipment specifications and layout initially designated by the Licensor.

         (iii)        The Licensee shall not, without the prior written consent of the Licensor (a) make any building design conversion or (b) make any alterations, conversions or additions to the location.

         (iv)        Make repairs or replacements required because of damage, wear and tear or in order to maintain the Non-Traditional Sonic in good condition and in conformity with blueprints and plans.

        (v)        Operate the Non-Traditional Sonic everyday of the year (except Easter, Thanksgiving and Christmas), and at least 10 hours per day or such other hours as may from time to time be reasonably prescribed by

        (vi)        Cause all employees of the Licensee, while working in the Non-Traditional Sonic, to (a) wear uniforms of such color, design and other specifications as the Licensor may designate from time to time, (b) present a neat and clean appearance, and (c) render competent and courteous service to the Licensee’s customers.

        (vii)        All menu items which the Licensor may deem appropriate to take full advantage of the potential market and achieve standardization in the Sonic System will be served, and no items which are not authorized and approved in writing by the Licensor will be served.

        (viii)        In the dispensing and sale of food products (a) use only containers, cartons, bags, napkins and other paper goods and packaging bearing the approved trademarks and which meet the Sonic System specifications and quality standards; (b) use only those flavorings, garnishments and food and beverage ingredients which meet the Sonic System specifications and quality standards, which Licensor may designate from time to time; and (c) employ only those methods of food handling, preparation and serving which the Licensor may designate from time to time.

        (ix)        Make prompt payment in accordance with the terms of invoices rendered to the Licensee including, but not limited to, the purchase of fixtures, equipment and food and paper supplies.

        (x)        At the Licensee’s expense, comply with all federal, state and local laws, ordinances and regulations affecting the operation of the Non-Traditional Sonic.

        (xi)        The Licensee shall not install any electronic games or other games of chance at the Non-Traditional Sonic without the express prior written consent of the Licensor.

        (xii)        Furnish the Licensor with current changes in home addresses and telephone number of its owners and manager and, upon the Licensor’s

        (xiii)        The Licensee shall notify the Licensor’s Director of Corporate Communications or, if not available, the most senior executive officer of the Licensor as soon as possible and, in any event, within 12 hours after the occurrence at the Non-Traditional Sonic of any event which could have an adverse impact on the Non-Traditional Sonic and/or the Sonic System, including (without limitation) the death or serious bodily injury of any employee or customer for any reason or the risk of infection by a contagious disease.

        (a)        The Licensor may require the Licensee (i) to purchase food, beverages, signs and equipment which meet the specifications established by the Licensor; (ii) to participate in the Licensor’s approved purchasing cooperative for the area in which the Non-Traditional Sonic is located; and (iii) to retain and utilize exclusively the marketing and advertising services of the Licensor approved advertising agency of record. In addition, the Licensee immediately shall use the Licensee’s vote or votes in all advertising cooperatives in which the Licensee participates to support the use of the advertising agency of record for the Sonic restaurant chain.

        (b)        The Licensor may require the Licensee to support the use of and to use the products and programs of the cola syrup supplier approved by the Licensor and used by a majority of all Sonic drive restaurants and Non-Traditional Sonics, to the exclusion of any other supplier of cola syrup.

        (c)        The Licensor may require the Licensee to comply with the foregoing provisions not only for the Non-Traditional Sonic, but also (to the extent the Licensee exercises Control) for all other Sonic drive-in restaurants and Non-Traditional Sonics for which the Licensee serves as a licensee.

        (d)        The Licensor hereby explicitly retains the exclusive right to consider, review or approve any and all distributors which may hold, sell or distribute Sonic-labeled goods or products, except that the Licensor shall not withhold unreasonably its approval of a supplier approved for use by a duly constituted purchasing cooperative.

        (e)        The terms of this Section 6.06 shall continue in effect for as long as the Licensee serves as a licensee for a Sonic drive-in restaurant or Non-Traditional Sonic and shall survive the expiration or termination of this Agreement.

        (f)        If at least 95% of all Sonic drive-in restaurants and Non-Traditional Sonics are in compliance with paragraphs (a) and (b) of Section 6.06, the Licensor periodically

        (a)        The Licensee shall use only the Proprietary Marks designated by the Licensor and shall use them only in the manner authorized and permitted by the Licensor.

        (b)        The Licensee shall use the Proprietary Marks only for the operation of the Non-Traditional Sonic.

        (c)        During the term of this agreement and any renewal hereof, the Licensee shall identify itself as the owner of the Non-Traditional Sonic in conjunction with any use of the Proprietary Marks, including, but not limited to, invoices, order forms, receipts, and contracts, as well as at such conspicuous locations on the premises of the Non-Traditional Sonic as the Licensor shall designate in writing.  The identification shall be in the form which specifies the Licensee’s name, followed by the term “Licensed Franchisee of Sonic Industries Inc.” or such other identification as shall be approved by the Licensor.

        (d)        The Licensee’s rights to use the Proprietary Marks is limited to such uses as are authorized under this Agreement, and any unauthorized use thereof shall constitute an infringement of the Licensor’s rights.

        (e)        The Licensee shall not use the Proprietary Marks to incur any obligation or indebtedness on behalf of the Licensor.

        (f)        The Licensee shall not use the Proprietary Marks as part of its corporate or other legal name if not already in existence prior to the effective date of this agreement.

        (g)        The Licensee shall comply with the Licensor’s instructions in filing and maintaining the requisite trade name or fictitious name registrations, and shall execute any documents deemed necessary by the Licensor or its counsel to obtain protection for the Proprietary Marks or to maintain their continued validity and enforceability.

        (h)        In the event that litigation involving the Proprietary Marks is instituted or threatened against the Licensee, the Licensee shall promptly notify the Licensor and shall cooperate fully in defending or settling such litigation.

        (a)        As between the parties hereto, the Licensor has the exclusive right and interest in and to the Proprietary Marks and the goodwill associated with and symbolized by them, and any and all use thereof by the Licensee inures to the benefit of the Licensor.

        (b)        The Proprietary Marks are valid and serve to identify the Sonic System and those who are licensed under the Sonic System.

        (c)        The Licensee shall not directly or indirectly contest the validity or the ownership of the Proprietary Marks.

        (d)        The Licensee’s use of the Proprietary Marks pursuant to this agreement does not give the Licensee any ownership interest or other interest in or to the Proprietary Marks, except the nonexclusive license granted herein.

        (e)        Any and all goodwill arising from the Licensee’s use of the Proprietary Marks in its licensed operations under the Sonic System shall inure solely and exclusively to the Licensor’s benefit, 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 the Licensee’s use of the Sonic System or the Proprietary Marks.

        (f)        The right and license of the Proprietary Marks granted hereunder to the Licensee is nonexclusive except as provided in subsection 2.01(a) of this Agreement, and the Licensor thus has and retains the right among others:

        (i)        To grant other licenses for the Proprietary Marks, in addition to those licenses already granted to existing licensees.

        (ii)        To use the Proprietary Marks in connection with selling products and services.

        (iii)        To develop and establish other systems for the same or similar Proprietary Marks, or any other proprietary marks, and grant licenses or franchises thereto without providing any rights therein to the Licensee.

        (g)        The Licensor reserves the right to substitute different Proprietary Marks for use in identifying the Sonic System and the businesses operating thereunder if the Licensor’s currently owned Proprietary Marks no longer can be used.

        (a)        shall not use the Confidential Information in any other business or capacity, or for the benefit of any other Person or entity;

        (b)        shall maintain the absolute confidentiality of the Confidential Information, and shall not disclose or divulge the Confidential Information to any unauthorized Person or entity, during and after the term of this Agreement;

        (c)        shall not make unauthorized copies of any portion of the Confidential Information disclosed in printed, audio or video form (except in connection with instruction of employees in the operation of the Non-Traditional Sonic); and

        (d)        shall adopt and implement all procedures prescribed from time to time by the Licensor to prevent unauthorized use or disclosure of the Confidential Information, including, without limitation, restrictions on disclosure thereof to employees of the Non-Traditional Sonic and the use of nondisclosure and non-competition clauses in employment agreements with employees (including all owners, shareholders and partners of the Licensee) who have access to the Confidential Information.

        (a)        information, processes or techniques which are or become generally known in the food service industry, other than through disclosure (whether deliberate or inadvertent) by the Licensee; and

        (b)        disclosure of the Confidential Information in judicial or administrative proceedings to the extent that the Licensee is legally compelled to disclose such information, provided the Licensee shall have used its best efforts, and shall have afforded the Licensor the opportunity, to obtain an appropriate protective order or other assurance satisfactory to the Licensor of confidential treatment for the information required to be so disclosed.

        (a)        In the event the Non-Traditional Sonic lies within a DMA for which a Licensor-approved advertising cooperative has been formed, the Licensee shall contribute to such advertising cooperative an amount required by such advertising cooperative on a schedule required by such advertising cooperative, provided that such contributions shall occur no less often than each calendar quarter and shall be of an amount not less than 3.25% of the Licensee’s Gross Sales from the operation of the Non-Traditional Sonic during each partial or full calendar month.

        (b)        In the event there exists no Licensor-approved advertising cooperative in the DMA in which the Non-Traditional Sonic is located, during each calendar quarter of the term of this agreement, the Licensee shall spend for approved advertising and promotion of the Non-Traditional Sonic (including, but not limited to, television time, radio time, newspaper display space, distributed promotional materials, but not including any amount spent on sign rent, paper products, candy or other foods which evidence the Licensor’s trademarks or color patterns and the like) an amount equal to but not less than 3.25% of Licensee’s Gross Sales from the operation of the Non-Traditional Sonic during each partial or full calendar month.

        (c)        For purposes of determining the amount which the Licensee is required to spend pursuant to Sections 11.01(a), 11.01(b) and 5.03, above, for each calendar quarter which is the subject of review, the parties hereto agree that the first two months of such calendar quarter and last month of the preceding calendar quarter shall be used in determining the Gross Sales of the Non-Traditional Sonic to determine the expenditures required hereunder. For example, to determine the expenditures required for January, February and March, the parties hereto agree that they will look to December, January, and

        (d)        All advertising by the Licensee in any medium which utilizes the Proprietary Marks or refers in any way to the Non-Traditional Sonic shall be conducted in a dignified manner and shall conform to such standards and requirements as the Licensor may specify from time to time in writing.  The Licensee shall submit to the Licensor (in accordance with the notice provisions contained herein), for the Licensor’s prior approval (except with respect to prices to be charged), samples of all advertising and promotional plans and materials that the Licensee desires to use, that use the Proprietary Marks or refer to the Non-Traditional Sonic and that have not been prepared or previously approved by the Licensor.  If written disapproval thereof is not received by the Licensee within 15 days after the date of receipt by the Licensor of such materials, the Licensor shall be deemed to have given the required approval.  Upon notice from the Licensor, the Licensee shall discontinue and/or remove any objectionable advertising material, whether or not same was previously approved by the Licensor.  If said materials are not discontinued and/or removed within five days after notice, the Licensor or its authorized agents, may, at any time, enter upon the Licensee’s premises, or elsewhere, and remove any objectionable signs or advertising media and may keep or destroy such signs or other media without paying therefore, and without being guilty of trespass or other tort.

        (e)        The Licensor may offer from time to time to provide, upon terms subject to the discretion of the Licensor, approved local advertising and promotional plans and materials, including, without limitation, newspaper display space, distributed promotional materials.

        (f)        The Licensor or its designee shall maintain and administer an advertising fund for the System as follows:

        (i)        As provided in Subsection 5.03 of this Agreement, the Licensee shall pay an advertising contribution fee to the Sonic Advertising Fund, which shall be administered by the Licensor, and shall be deposited in a separate bank account denoted as the Sonic Advertising Fund (the “Fund”). 

        (ii)        The Licensor shall direct all advertising programs with sole discretion over the creative concepts, materials, and media used in such programs.  The Fund is intended to maximize general public recognition and acceptance of the Proprietary Marks for the benefit of the Sonic System and the Licensee acknowledges that the Licensor and its designees undertake no obligation in administering the Fund to make expenditures for the Licensee which are equivalent or proportionate to the Licensee’s contribution, and

        (iii)        The Fund and all earnings thereof shall be used exclusively to meet any and all costs of maintaining, administering, directing and preparing advertising (including, without limitation, the cost of preparing and conducting television, radio, magazine and newspaper advertising campaigns and other public relations activities; employing advertising agencies to assist therein; and providing promotional brochures and other marketing materials to licensees in the Sonic System).  All sums paid by licensees to the Fund shall be maintained in a separate account from the other funds of the Licensor. The Fund shall pay the Licensor monthly an amount equal to 15% of the Fund’s receipts during the preceding month, but not to exceed the Licensor’s actual administrative costs and overhead, if any, as the Licensor may incur in activities reasonably related to the administration or direction of the Fund and advertising programs for the licensees and the Sonic System, including without limitation, conducting market research, preparing marketing and advertising materials, and collecting and accounting for assessments for the Fund. The Fund and its earnings shall not inure to the benefit of the Licensor.

        (iv)        All materials produced by the Fund shall be made available to all licensees without cost on a regular basis, excluding distribution costs.  This subparagraph (iv) of paragraph (f) of Section 11.01 shall not preclude the Licensor from offering other materials not produced by the Fund upon terms subject to the discretion of the Licensor.  (See paragraph (e) of this Section 11.01.)

        (v)        The Fund is not an asset of the Licensor, and an independent certified public accountant designated by the Licensor shall review the operation of the Fund annually, and the report shall be made available to the Licensee upon request. Notwithstanding the foregoing, the body approved and designated by the Licensor as the body to consult with regarding the Licensor’s maintenance and administration of the Fund (such as the current Franchise Advisory Council or its successor) may designate the independent public accountant to conduct the required review of the operation of the Fund, if requested in writing at least 30 but not more than 60 days prior to the end of each fiscal year.

        (vi)        It is anticipated that most contributions to the Fund shall be expended for advertising and/or promotional purposes during the year within which the contributions are made.  If, however, excess amounts remain in the Fund at the end of such year, all expenditures in the following year(s)

        (vii)        Although the Licensor intends the Fund to be of perpetual duration, the Licensor maintains the right to terminate the Fund.  Such Fund shall not be terminated, however, until all monies in the Fund have been expended for advertising and promotional purposes as aforesaid.

        (g)        On at least a quarterly basis, the Licensor shall consult with the body approved and designated by Sonic (such as the current Franchise Advisory Council or its successor) regarding the Licensor’s maintenance and administration of the Fund and shall report to that body on the Fund’s operation.

        (a)        The Licensee shall maintain statutory worker’s compensation insurance and employer’s liability insurance having a minimum limit of liability of the greater of $500,000 or the minimum amount otherwise required by applicable state law. The Licensor shall accept participation in the Texas Sonic Employee Accident Program (“TSEAP”) or in the non-subscriber program for Sonic drive-in restaurants and Non-Traditional Sonics located in Texas as long as Texas law does not require statutory worker’s compensation insurance.

        (b)        The Licensee shall maintain commercial general liability insurance, including bodily injury, property damage, products, personal and advertising injury coverage on an occurrence policy form having a minimum per occurrence and general aggregate limits of at least $1,000,000 per location.

        (c)        The Licensee shall maintain non-owned automobile liability insurance having a minimum limit of $1,000,000. The automobile policy also shall provide coverage for owned automobiles if owned or leased in the name of the Licensee.

        (d)        The Licensor shall have the right to require the Licensee to increase the insurance specified above by giving the Licensee 60 days’ written notice in accordance with

        (a)        The Licensee’s corporation shall be newly organized, and its charter shall provide that its activities are confined exclusively to operating Sonic drive-in restaurants and/or Non-Traditional Sonics.

        (b)        The Licensee and the Licensee’s corporation shall maintain stop transfer instructions against the transfer on the Licensee’s corporation’s records of any securities with any voting rights subject to the restrictions of Section 13 of this Agreement, and shall issue no securities upon the face of which the following printed legend does not legibly and conspicuously appear. 

        (c)        At any time upon the Licensor’s request, the Licensee and the Licensee’s corporation shall furnish company with a list of all shareholders having an interest in the Licensee’s corporation, the percentage interest of such shareholder and a list of all officers and directors in such form as the Licensor may require.

        (d)        The corporate name of the Licensee’s corporation shall not include any of the Proprietary Marks granted by this Agreement.  The Licensee and the Licensee’s corporation shall not use any ▇▇▇▇ nor any name deceptively similar thereto in a public or private offering of its securities, except to reflect the Licensee’s corporation’s franchise relationship with the Licensor.  Any prospectus or registration the Licensee or the Licensee’s corporation would propose to use in such a public or private offering shall be submitted to the Licensor within a reasonable time prior to the effective date thereof for the

        (e)        Articles of incorporation, bylaws and all other documents governing the Licensee’s corporation shall be forwarded to the Licensor for approval.  The articles of incorporation, bylaws and other organization and governing documents shall recite that the issuance and transfer of any interest in the Licensee’s corporation are restricted by the terms of Section 13 of this Agreement.

        (f)        Each shareholder of the Licensee’s corporation shall personally guarantee performance under this Agreement and shall be personally bound by the terms of this Agreement.

        (g)        Any breach of this Agreement by the Licensee’s corporation shall be deemed a breach of this agreement by each shareholder of the Licensee’s corporation and each shareholder shall be personally and fully liable and obligated by any and all such breaches.

        (h)        The Licensee and the Licensee’s corporation shall submit to the Licensor, prior to any assignment under this Section 13, a shareholders agreement executed by the board of directors and ratified by all shareholders, which states that, except as may be permitted by Section 13 of this Agreement, no shares of stock or other interest in the Licensee’s corporation shall be issued, transferred, or assigned to any Person or entity without the Licensor’s prior written consent.

        (i)        Each and every shareholder of the Licensee’s corporation or any party owning a security issued by, or owning any legal or equitable interest in the Licensee’s corporation or in any security convertible to a legal or equitable interest in the Licensee’s corporation shall meet those same standards of approval as an individual licensee shall be required to meet prior to being included as a licensee on a standard license agreement with the Licensor.

        (a)        In addition to any assignments or contingent assignments contemplated by the terms of Sections 13.02 and 13.03 of this Agreement, the Licensee shall not sell, transfer or assign this Agreement to any Person or Persons without the Licensor’s prior written consent.  Such consent shall not be unreasonably withheld.

        (b)        In determining whether to grant or to withhold such consent, the following requirements must be met by the Licensee:

        (i)        All of the Licensee’s accrued monetary obligations shall have been satisfied whether due under this agreement or otherwise.

        (ii)        The Licensor and the Licensee execute a general release of each other, in a form satisfactory to the Licensor, of any and all claims the Licensee may have against the Licensor and its Affiliates, including (without limitation) all claims arising under any federal, state or local law, rule or ordinance, but excluding (as to the Licensor) any claims against the Licensee for (a) unpaid moneys due the Licensor or its Affiliates, (b) a material breach of the provisions of this Agreement regarding the Proprietary Marks, or (c) the violation of the Licensor’s legal rights regarding the Proprietary Marks. The Licensor may waive the requirements of this subparagraph (ii) at the Licensor’s election.

        (iii)        The Licensee shall not be in material breach of this agreement or any other agreement between the Licensor and the Licensee.

        (iv)        Assignee (or the assignee’s management, as the case may be) shall at the Licensor’s sole discretion, enroll in and successfully complete such training programs as the Licensor shall at that time designate according to Section 6.04 of this Agreement.

        (v)        The Licensor shall consider of each prospective transferee, by way of illustration, the following:  (a) work experience and aptitude, (b) financial background, (c) character, (d) ability to personally devote full time and best efforts to managing the Non-Traditional Sonic, (e) residence in the locality of the Non-Traditional Sonic, (f) equity interest in the Non-Traditional Sonic, (g) conflicting interests and (h) such other criteria and conditions as the Licensor shall apply in the case of an application for a new license to operate a Non-Traditional Sonic.  The Licensor’s consent shall also be conditioned each upon such transferee’s execution of an agreement by which the transferee personally assumes full and unconditional liability for and agrees to perform from the date of such transfer all obligations, covenants and agreements contained in this Agreement to the same extent as if the transferee had been an original party to this Agreement.

        (a)        If the Licensee or any Person or entity with an interest in the Licensee has received and desires to accept any bona fide offer to purchase all or any part of the Licensee’s interest in this Agreement or in the Licensee and the transfer of such interest would (1) result in a change of Control of the Licensee or of this Agreement or (2) constitute a transfer of interest held by a Controlling Person of the Licensee or of this Agreement, the Licensee or such Person shall notify the Licensor in writing of each such offer, with such notice including the name and address of the proposed purchaser, the amount and terms of the proposed purchase price, a copy of the proposed purchase contract

        (b)        The election by the Licensor not to exercise its right of first refusal as to any offer shall not affect its right of first refusal as to any subsequent offer.

        (c)        Any sale or attempted sale effected without first giving the Licensor the right of first refusal described above shall be void and of no force and effect.

        (d)        If the Licensor does not accept the offer to purchase the Non-Traditional Sonic, the Licensee may conclude the sale to the purchaser who made the offer so long as the terms and conditions of such sale are identical to those originally offered to the Licensor; provided, however, that the Licensor’s approval of the assignee be first obtained, which consent shall not be unreasonably withheld upon compliance with the conditions on assignment imposed by this agreement.

        (e)        The provisions of this Section 13.05 shall not apply to any proposed transfers to members of the Licensee’s immediate family. For the purposes of this Section 13.05, a member of the Licensee’s immediate family shall mean the Licensee’s spouse and children (by birth or adoption). In addition, the provisions of this Section 13.05 shall not apply to any proposed transfers to Persons who already own an interest (directly or indirectly) in this Agreement or the Licensee as long as the transfer will not result in a change in Control of this Agreement or the Licensee.

        (a)        The Licensee shall become insolvent.

        (b)        The Licensee, either personally, through an equity owner, or through the Licensee’s attorney, shall give oral or written notice to the Licensor of the Licensee’s intent to file a voluntary petition under any bankruptcy law.

        (c)        A final judgment aggregating in excess of $5,000 against the Non-Traditional Sonic or property connected with the Non-Traditional Sonic which remains unpaid for 30 days.

        (d)        Suit to foreclose any lien against any assets of the Non-Traditional Sonic is instituted against the Licensee and (i) is not dismissed within 30 days, (ii) such lien is not contested and challenged through the applicable administrative agencies or courts, or (iii) a bond is not posted (if such remedy is available) to delay any such foreclosure and guarantee performance.

        (e)        The assets of the Non-Traditional Sonic are sold after being levied thereupon by sheriff, marshal or a constable.

        (f)        Transfer of this Agreement, in whole or in part, is effected in any manner inconsistent with Section 13.

        (a)        If the Licensee ceases to operate the Non-Traditional Sonic or otherwise abandons the Non-Traditional Sonic (other than closure permitted pursuant to Section 6.05(c)(v) of this Agreement) or forfeits the legal right to do or transact business at the location licensed by this Agreement. However, a default under this Agreement shall not occur and the Licensee shall have the right to terminate this Agreement upon written notice to the Licensor after the Licensee loses its lease or other legal right to conduct business at the location of the Non-Traditional Sonic if and only if the loss of the Licensee’s lease or legal right to conduct business did not result from the Licensee’s breach of its obligations or failure to exercise any contractual or legal rights available to it.

        (b)        If the Licensee is convicted of a felony, a crime involving moral turpitude, or any other crime or offense that is reasonably likely, in the sole opinion of the Licensor, to adversely affect the Sonic System, the Proprietary Marks, the goodwill associated therewith or the Licensor’s rights therein.

        (c)        If the Licensee misuses or makes any unauthorized use of any of the Proprietary Marks or any other identifying characteristic of the Sonic System or otherwise materially impairs the goodwill associated therewith or the Licensor’s rights in the Sonic System and the Licensee cannot cure the default within 30 days.

        (d)        If the Licensee improperly discloses trade secrets or confidential information and the Licensee cannot cure the default within 30 days.

        (e)        If continued operation of the Non-Traditional Sonic might endanger public health or safety.

        (f)        If the Licensee knowingly or through gross negligence maintains false books or records or knowingly or through gross negligence submits any false report to the Licensor.

        (a)        If the Licensee fails to pay any past due amounts owed to the Licensor after the Licensor has mailed the Licensee two or more statements at least 20 days apart.

        (b)        If the Licensee fails to promptly pay, or repeatedly delays the prompt payment of undisputed invoices from his suppliers or in the remittance of rent and property tax as required in the Licensee’s lease.

        (c)        If the Licensee fails to maintain and operate the Non-Traditional Sonic in a good, clean, and wholesome manner or otherwise is not in compliance with the standards prescribed by the Sonic System.

        (d)        If the Licensee attempts to assign or transfer any interest in this agreement in violation of Section 13 of this Agreement.

        (e)        If the Licensee denies the Licensor the right to inspect the Non-Traditional Sonic at reasonable times, which includes the right to photograph the interior and exterior of the Non-Traditional Sonic in its entirety.

        (f)        If the Licensee fails, refuses, or neglects to obtain the Licensor’s prior written approval or consent as required by this Agreement.

        (g)        If the Licensee acquires any interest in another business in violation of Section 16 of this Agreement.

        (h)        If the Licensee fails, refuses or neglects to provide the Licensor with the Licensee’s home address and home telephone number.

        (i)        If the Licensee breaches any other requirement set forth in this Agreement.

        (j)        If the Licensee, upon the destruction of the Non-Traditional Sonic, fails to rebuild the franchised premises and resume operation within a reasonable time (cessation of the business from a franchised premises shall not constitute default of this Agreement if caused by condemnation, expiration of a location lease pursuant to its terms at execution or when failure to rebuild following destruction of the franchised premises is prohibited by law or the location lease).

        (a)        Negotiation. The parties first shall use their best efforts to discuss and negotiate a resolution of the controversy.

        (b)        Mediation. If the efforts to negotiate a resolution do not succeed, the parties shall submit the controversy to mediation by a mediation firm agreeable to the parties or by the American Arbitration Association, if the parties cannot agree.

        (c)        Arbitration. If the efforts to negotiate and mediate a resolution do not succeed, the parties shall resolve the controversy by final and binding arbitration in accordance with the Rules for Commercial Arbitration (the “Rules”) of the American Arbitration Association in effect at the time of the execution of this Agreement and pursuant to the following additional provisions:

        (i)        Applicable Law. The Federal Arbitration Act (the “Federal Act”), as supplemented by the Oklahoma Arbitration Act (to the extent not inconsistent with the Federal Act), shall apply to the arbitration.

        (ii)        Selection of Arbitrators. The parties shall select three arbitrators within 10 days after the filing of a demand and submission in accordance with the Rules. If the parties fail to agree on three arbitrators within that 10-day period or fail to agree to an extension of that period, the arbitration shall take place before three arbitrators selected in accordance the Rules. At least one of the arbitrators shall constitute an individual selected by Sonic (or its Affiliate) who has experience with franchise law or franchise relations. A decision or award by a majority of the arbitrators shall constitute the decision or award of the arbitrators.

        (iii)        Location of Arbitration. The arbitration shall take place in Oklahoma City, Oklahoma, and the arbitrators shall issue any award at the place of arbitration. The arbitrators may conduct hearings and meetings at any other place agreeable to the parties or, upon the motion of a party, determined by the arbitrators as necessary to obtain significant testimony or evidence.

        (iv)        Discovery. The arbitrators shall have the power to authorize all forms of discovery (including depositions, interrogatories and document production) upon the showing of (a) a specific need for the discovery, (b) that the discovery likely will lead to material evidence needed to resolve the controversy, and (c) that the scope, timing and cost of the discovery is not excessive.

        (v)        Authority of Arbitrators. The arbitrators shall not have the power (a) to alter, modify, amend, add to, or subtract from any term or provision of this Agreement; (b) to rule upon or grant any extension, renewal or continuance of this Agreement; (c) to award damages or other remedies expressly prohibited by this Agreement; or (d) to grant interim injunctive relief prior to the award.

        (vi)        Scope of Proceeding. The parties shall conduct any arbitration proceeding and resolve any controversy on an individual basis only and not on a class-wide, multiple-party, or similar basis.

        (vii)        Enforcement of Award. The prevailing party shall have the right to enter the award of the arbitrators in any court having jurisdiction over one or more of the parties or their assets. The parties specifically waive any right they may have to apply to any court for relief from the provisions of this Agreement or from any decision of the arbitrators made prior to the

        (d)        Excluded Controversies. At the election of the Licensor or its Affiliate, the provisions of this Section 14.04 shall not apply to any controversies relating to any fee due the Licensor or its Affiliate; any promissory note payments due the Licensor or its Affiliate; or any trade payables due the Licensor or its Affiliate as a result of the purchase of equipment, goods or supplies. The provisions of this Section 14.04 also shall not apply to any controversies relating to the use and protection of the Proprietary Marks or the Sonic System, including (without limitation) the Licensor’s right to apply to any court of competent jurisdiction for appropriate injunctive relief for the infringement of the Proprietary Marks or the Sonic System.

        (e)        Attorneys’ Fees and Costs. The prevailing party to the arbitration shall have the right to an award of its reasonable attorneys’ fees and costs incurred after the filing of the demand and submission, including a portion of the direct costs of any in-house legal staff reasonably allocable to the time devoted to the arbitration.

        (a)        The Licensee, upon any termination, cancellation or expiration of this Agreement, shall promptly pay to the Licensor and the Licensor’s subsidiaries any and all sums owed to them.  In the event of termination for any breach by the Licensee, such sums shall include all damages, costs and expenses, including reasonable attorneys’ fees, incurred by the Licensor as a result of the breach, which obligation shall give rise to and remain, until paid in full, a lien in favor of the Licensor against any and all of the assets of the Non-Traditional Sonic owned by the Licensee at the time of default.

        (b)        Upon termination, cancellation or expiration of this Agreement for any reason, all of Licensee’s rights under this Agreement shall terminate. The Licensee shall not thereafter use or adopt any trade secrets disclosed to the Licensee under this Agreement or any paper goods, emblems, signs, displays, table ordering stations, or other property on

        (c)        Upon termination, cancellation or expiration of this Agreement, unless otherwise directed in writing by the Licensor, the Licensee shall change the exterior and interior design and the decor of said premises, including, but not limited to, changing the color scheme, and shall make or cause to be made such changes in signs and structures (excluding major structural changes) as the Licensor shall reasonably direct so as to effectively distinguish the same from its former appearance and from any other Non-Traditional Sonic or Sonic drive-in restaurant. If the Licensee fails or refuses to comply with this provision, the Licensor shall have the right to enter upon the premises where said business is being conducted without being guilty of trespass or any other tort for the purpose of making or causing to be made such changes at the expense of the Licensee, which expense the Licensee agrees to pay on demand.

        (d)        Upon termination, cancellation or expiration of this Agreement, in the event the Licensee is the owner of any signage containing or incorporating any of the Proprietary Marks, the Licensor shall have an irrevocable option to purchase the signage for its fair market value. In any event, the Licensee shall not thereafter use any signage displaying the Licensor’s name or Proprietary Marks or which primarily display the colors used in any other such sign at any other Non-Traditional Sonic or Sonic drive-in restaurant. See Section 15.04 for determining fair market value.  Any agent, servant or employee of the Licensor may remove the signage or any objectionable signs or advertising from the Non-Traditional Sonic without being guilty of trespass or other tort, and the Licensee shall be liable for the Licensor’s costs plus attorneys’ fees for any interference therewith.

        (e)        Upon termination, cancellation or expiration of this Agreement, the Licensee shall cease to hold the Licensee out in any way as a licensee of the Licensor or to do anything which would indicate any relationship between the Licensee and the Licensor.

        (f)        The covenants set forth in paragraphs (a), (b), (c), (d) and (e) of this Section 15.01 shall survive the termination, cancellation or expiration of this Agreement.

        (g)        All rights, claims and indebtedness which may accrue to the Licensor prior to termination, cancellation or expiration of this Agreement shall survive termination, cancellation or expiration and be enforceable by the Licensor.

        (h)        The Licensee shall complete all such modifications within 30 days after this Agreement has been terminated or canceled or has expired. The Licensee and the Licensor

        (a)        Upon termination, cancellation or expiration of this Agreement, the Licensor shall have the right and option to purchase all or any patented, special or unique Non-Traditional Sonic equipment, table order stations, menu housings, signs, menus and supplies of the Licensee at their fair market value. See Section 15.04 for determining fair market value.  Such right or option of the Licensor shall be exercised as provided in paragraph (b) of this Section 15.02. If the Licensor elects to exercise any option to purchase provided in this Agreement, it shall have the right to set off all amounts due from the Licensee to the Licensor and one-half of the cost of any appraisals against any payment therefor.

        (b)        In the case of termination by expiration, the Licensor shall exercise the Licensor’s option contained in this Section 15.02 by giving the Licensee written notice at least 30 days prior to expiration.  In the case of termination for any other reason, the Licensor shall exercise its option by giving the Licensee written notice within 30 days after termination.

        (c)        The Licensor’s option hereunder is without prejudice to the Licensor’s rights under any security agreement held by the Licensor or with respect to which the Licensor may have a guarantor’s or surety’s subrogation interest.  If the Licensor exercises this option, the Licensor may pay any debt which the Licensee owes to the Licensor and shall remit any balance of the purchase price to the Licensee.  There shall be no allowance for goodwill.

        (a)        Upon termination, cancellation or expiration of this Agreement, if the Licensee desires to sell the Licensee’s unbroken inventory packages of approved imprinted

        (b)        If the Licensee desires to sell such items to the Licensor, the Licensee shall, not later than 10 days after termination, cancellation or expiration of this Agreement, give the Licensor 10 days written notice of the Licensee’s election and, at the expiration of the 10-day notice period, deliver such items at the Licensee’s expense with an itemized inventory to the nearest Sonic drive-in restaurant or Non-Traditional Sonic owned by the Licensor or other unit designated by the Licensor. The Licensor agrees to pay the Licensee or credit the Licensee’s account within seven days after said delivery.

        (a)        During the term of this License, Licensee shall not directly or indirectly through one or more intermediaries (i) engage in, (ii) acquire any financial or beneficial interest (including interests in corporations, partnerships, trusts, unincorporated associations or joint ventures) in, (iii) loan money to or (iv) become landlord of any restaurant business which has a menu similar to that of a Non-Traditional or traditional Sonic (such as hamburgers, hot dogs, onion rings, and similar items customarily sold by Non-Traditional or traditional Sonics) or which has an appearance similar to that of a Non-Traditional or traditional Sonic (such as color pattern or other items that are customarily used by a Non-Traditional or traditional Sonic).

        (b)        Licensee shall not, for a period of eighteen (18) months after termination of this License for any reason, directly or indirectly through one or more intermediaries (i) engage in, (ii) acquire any financial or beneficial interest (including interests in corporations, partnerships, trusts, unincorporated associations or joint ventures) in, (iii) loan money to or (iv) become a landlord of any restaurant business which has a menu similar to that of a Non-Traditional or traditional Sonic (such as hamburgers, hot dogs, onion rings, and similar items customarily sold by Non-Traditional or traditional Sonics) or which has an appearance similar to that of a Non-Traditional or traditional Sonic (such as color pattern or other items that are customarily used by a Non-Traditional or traditional Sonic), and which (i) is within a three (3) mile radius of the Non-Traditional Sonic formerly licensed by this agreement, (ii) is within a twenty (20) mile radius of a Non-Traditional Sonic or Sonic

        (c)        The Licensee shall not appropriate, use or duplicate the Sonic System, or any portion of the Sonic System, for use at any other restaurant business.

        (d)        During the term of this Agreement, the Licensee (1) shall use the Licensee’s best efforts to promote the business of the Non-Traditional Sonic and (2) shall not engage in any other business or activity that might detract from, interfere with, or be detrimental to the Sonic System or the Licensee’s full and timely performance under this Agreement.

        (e)        The parties agree that each of the foregoing covenants shall be construed as independent of any covenant or provision of this Agreement.  If all or any portion of a covenant in this Section 16 is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which the Licensor is a party, the Licensee 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 Section 16.

        (f)        The Licensee expressly agrees that the existence of any claims the Licensee may have against the Licensor, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by the Licensor of the covenants in this Section 16.

        (g)        The Licensee acknowledges that the Licensee’s violation of the terms of this Section 16 would result in irreparable injury to the Licensor for which no adequate remedy at law is available, and the Licensee accordingly consents to the ex parte issuance of restraining orders, temporary and permanent injunctions and cease and desist orders prohibiting any conduct by the Licensee in violation of the terms of this Section 16.

        (h)        The Licensee shall utilize at the Non-Traditional Sonic a cash register previously approved by the Licensor, which such cash register shall at all times during the term of this Agreement have a non-alterable grand total function so that each item entered in such register and each day’s totals may not be altered once entered.

        (a)        Purpose. The certificate of incorporation of the Licensee, if incorporated after August 31, 1994, shall provide that the purpose of the corporation shall consist only in the development, ownership, operation and maintenance of Sonic drive-in restaurants and/or Non-Traditional Sonics.

        (b)        Transfer Restrictions. The certificate of incorporation of the Licensee shall provide that the Licensee shall not issue any additional capital stock of the Licensee and that no stockholder may transfer, assign or pledge any issued capital stock of the Licensee without the prior, written consent of the Licensor, and each stock certificate issued to evidence the capital stock of the Licensee shall contain a legend disclosing the foregoing restriction. The Licensor shall not withhold its consent to the issuance of additional capital stock or a transfer, assignment or pledge without a reasonable basis. In giving its consent, the Licensor shall have the right (but not the obligation) to impose one or more reasonable conditions, including (without limitation) the requirement that the recipient of the capital stock execute an agreement substantially similar to the Guaranty and Restriction Agreement attached as Attachment I to this Agreement.

        (c)        Stockholder Guaranty. Each stockholder of the Licensee shall execute the Guaranty and Restriction Agreement attached as Attachment I to this Agreement.

        (d)        Documents. Prior to the Licensor’s execution of this Agreement, the Licensee shall deliver to the Licensor photocopies of its certificate of incorporation and issued stock certificates reflecting compliance with the provisions of this Section 22.01.

        (a)        Purpose. The partnership agreement and certificate of limited partnership (if applicable) of the Licensee, if formed after August 31, 1994, shall provide that the purpose of the partnership shall consist only in the development, ownership, operation and maintenance of Sonic drive-in restaurants and/or Non-Traditional Sonics.

        (b)        Transfer Restrictions. The partnership agreement and certificate of limited partnership (if applicable) of the Licensee shall provide that the Licensee shall not issue any additional partnership interests in the Licensee and that no partner may transfer, assign or pledge a partnership interest in the Licensee without the prior, written consent of the Licensor. The Licensor shall not withhold its consent to the issuance of additional partnership interests or a transfer, assignment or pledge without a reasonable basis. In giving its consent, the Licensor shall have the right (but not the obligation) to impose one or more reasonable conditions, including (without limitation) the requirement that the recipient of the partnership interest execute an agreement substantially similar to the Guaranty and Restriction Agreement attached as Attachment I to this Agreement.

        (c)        Partner Guaranty. Each partner of the Licensee shall execute the Guaranty and Restriction Agreement appearing as Attachment I to this Agreement.

        (d)        Documents. Prior to the Licensor’s execution of this Agreement, the Licensee shall deliver to the Licensor photocopies of its partnership agreement and

        (a)        Purpose. The articles of organization and operating agreement of the Licensee, if organized after August 31, 1994, shall provide that the purpose of the limited liability company shall consist only in the development, ownership, operation and maintenance of Sonic drive-in restaurants and/or Non-Traditional Sonics.

        (b)        Transfer Restrictions. The articles of organization and operating agreement of the Licensee shall provide that the Licensee shall not issue any additional membership interests in the Licensee and that no member may transfer, assign or pledge any membership interests in the Licensee without the prior, written consent of the Licensor. The Licensor shall not withhold its consent to the issuance of additional membership interests or a transfer, assignment or pledge without a reasonable basis. In giving its consent, the Licensor shall have the right (but not the obligation) to impose one or more reasonable conditions, including (without limitation) the requirement that the recipient of the membership interest execute an agreement substantially similar to the Guaranty and Restriction Agreement attached as Attachment I to this Agreement.

        (c)        Member Guaranty. Each member of the Licensee shall execute the Guaranty and Restriction Agreement appearing as Attachment I to this Agreement.

        (d)        Documents. Prior to the Licensor’s execution of this Agreement, the Licensee shall deliver to the Licensor photocopies of its articles of organization and operating agreement reflecting compliance with the provisions of this Section 22.03.

        (a)        All royalties due Sonic pursuant to the License Agreement.

        (b)        All advertising contribution fees to the Sonic Advertising Fund pursuant to the License Agreement.

        (c)        All contributions to approved advertising cooperatives pursuant to the License Agreement.

        (d)        Any other miscellaneous obligations owing to Sonic or its Affiliates relating to the Non-Traditional Sonic covered by the License Agreement.