Document:

exhibit10.13.htm

    
      DEVELOPMENT
        AGREEMENT

      

      Sonic
        Industries LLC (“Sonic”), a
        Delaware limited liability company, and __________________ (the “Developer”), a
        ____________ ___________________, enter into this Development Agreement (this
        “Agreement”) as of the ____ day of __________, 2007.

      

      W
        I T
        N E S S E T H :

      

      Whereas,
        Sonic is developing a food
        service system (“Sonic System”) under which food is sold to the public from
        drive-in restaurants operated under the name “Sonic Drive-In”; and

      

      Whereas,
        Developer desires to obtain
        the right to select proposed sites on which to construct Sonic drive-ins,
        to
        submit the same to Sonic for its acceptance and, upon the acceptance of each
        proposed site by Sonic, to enter into a License Agreement with Sonic to
        construct, own and operate a Sonic drive-in upon such site (hereinafter
“Developmental Rights”) upon the terms and conditions set forth
        herein.

      

      Now,
        therefore, in consideration of the
        foregoing and of the covenants herein contained, the parties, intending to
        be
        legally bound, hereby agree as follows:

      

      1.           AREA
        EXCLUSIVITY AND CONSTRUCTION SCHEDULE

      

      (a)           Subject
        to the terms and conditions of this Agreement, Sonic hereby grants to the
        Developer through ___________________, 20__, the exclusive Developmental
        Rights
        for the cities of ___________, __________ (in accordance with their boundaries
        as of the date of this Agreement), all as generally shown on Exhibit A to
        this
        Agreement, less and except any protected radius previously granted by Sonic
        or
        its Affiliates and currently in effect within that area as it now exists
        or
        later increases or decreases through the operation or renewal of the terms
        of
        the applicable license agreement (the “Franchised Area”).  Sonic has
        and shall have the absolute right to approve the location of a Sonic drive-in
        restaurant in an area contiguous to the Franchised Area even though the
        protected radius of that drive-in restaurant would extend into the Franchised
        Area.

      

      (b)           Developer
        agrees to develop and to put In Operation at least ________ Sonic drive-in
        restaurants within the Franchised Area in accordance with the following
        development and performance schedule (the “Performance Schedule”):

      

      
        	
                Number
                  of

              	
                In
                  Operation

              
	
                Restaurants

              	
                On
                  or Before

              
	 	 
	
                __

              	
                ____________,
                  200_

              
	
                __

              	
                ____________,
                  200_

              
	
                __

              	
                ____________,
                  200_

              
	 	 

      

      

      (c)           For
        purposes of this Agreement, a restaurant shall be deemed to be “In Operation”
once a License Agreement (as hereinafter set forth) has been executed by
        Developer and Sonic, and the restaurant has opened to the public.  At
        the Developer’s written election, a Sonic drive-in restaurant or Non-traditional
        Location (as defined in Section 8(d)(iii) below) placed In Operation by someone
        other than the Developer pursuant to the provisions of Section 8(d) may count
        or
        not count as a restaurant placed In Operation for the purpose of the Performance
        Schedule.  If the Developer elects to have an acquired restaurant or
        Non-traditional Location count towards the Performance

      
        
          
          

        

        
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       Schedule,
        it may result in the earlier expiration of the Developer’s exclusive
        Developmental Rights under this Agreement.

      

      2.           TERM.  The
        term of this Agreement and all Developmental Rights granted hereunder shall
        expire on the date the last of the Sonic drive-in restaurants to be constructed
        pursuant to the Performance Schedule set forth in Section 1 hereof is opened
        for
        business, unless sooner terminated in accordance with the terms of this
        Agreement.

      

      3.           RENEWAL.                                This
        Agreement shall not be subject to renewal.

      

      4.           TIMELY
        PERFORMANCE.  Developer hereby acknowledges that its
        timely development of the Sonic drive-in restaurants in the Franchised Area
        in
        accordance with the Performance Schedule is of material importance to Sonic
        and
        Developer, and agrees, as a condition of the continuance of the rights granted
        hereunder, to develop and construct Sonic drive-in restaurants within the
        Franchised Area in accordance with the Performance Schedule, to operate such
        restaurants pursuant to the terms of the License Agreements and to maintain
        all
        such restaurants in operation continuously.

      

      5.           CONSIDERATION
        FOR EXCLUSIVE RIGHTS.  As consideration for this
        Agreement, Developer has paid, and Sonic has accepted the sum of $__________
        concurrently with the execution of this Development Agreement. This
        consideration for exclusive rights shall be credited to the required fee
        for
        each License Agreement signed per restaurant to be placed In Operation in
        accordance with the Performance Schedule.  Such credit shall
        be:

      

      (i)           in
        the amount of $10,000 for each License Agreement signed;

      

      (ii)           credited
        against the total franchise fee to be paid to Sonic; and

      

      (iii)           credited
        at the time the License Agreement for each restaurant is signed by Developer
        and
        Sonic.

      

      If
        the Developer elects to have a Sonic
        drive-in restaurant or Non-traditional Location opened by someone other than
        the
        Developer pursuant to Section 8(d) count towards the Performance Schedule,
        Sonic
        shall refund $10,000 to the Developer for each restaurant or Non-traditional
        Location placed In Operation.

      

      Except
        as set forth above, the fee
        required by this Section 5 is nonrefundable.

      
        
          
          

        

        
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      6.           SITE
        SELECTION

      

      (a)           Developer
        agrees to submit for evaluation by Sonic pursuant to Sonic’s site selection
        criteria, the information ordinarily required for each proposed site for
        a Sonic
        drive-in restaurant.  Sonic may review the site, conduct such other
        investigation of the proposed site it determines is necessary to properly
        evaluate the site, and, in Sonic’s sole discretion, either accept or reject the
        site by written notice to Developer.  Site acceptance shall be
        contingent upon, among other things, execution by Developer and Sonic of
        the
        License Agreement for said site as provided in Section 7
        hereof.  In the event Sonic does not accept or reject a site submitted
        in writing by Developer within 30 days of receipt of such written notice,
        such
        site shall be deemed to be approved by Sonic.

      

      (b)           Developer
        acknowledges that no officer, employee or agent of Sonic has any authority
        to
        approve or accept any proposed site except in writing and in accordance with
        Section 6(a) above, and any other representations, whether oral or written,
        shall be of no effect; Developer further acknowledges that Sonic’s acceptance of
        said site does not constitute any representation, warranty or guarantee by
        Sonic
        that said site will be a successful location for a Sonic drive-in
        restaurant.

      

      (c)           Sonic
        reserves the right to revoke any site approval after the Completion Date
        (as
        defined in Section 7(b) below) if a restaurant is not under construction
        at the
        site in accordance with a fully executed License Agreement for said
        site.

      

      7.           CONSTRUCTION
        AND ISSUANCE OF LICENSE AGREEMENT

      

      (a)           Upon
        receipt of Sonic’s written acceptance of a proposed site as set forth in Section
        6 hereof, Developer shall promptly take the necessary steps to acquire the
        site
        (by purchase, option to purchase, lease or sublease) and to otherwise obtain
        the
        rights to construct, maintain and operate a Sonic drive-in restaurant on
        the
        site.

      

      (b)           Within
        10 days of Sonic’s receipt of notice by Developer that Developer is ready to
        begin construction at the accepted site, Sonic shall execute and forward
        to
        Developer the License Agreement for said site if one has not been previously
        executed.  It is specifically agreed by Developer and Sonic that no License
        Agreement shall be effective until the same is executed by Sonic and Developer
        and a license fee is paid by Developer, and that Developer shall not begin
        construction work at the accepted site until Sonic has received the License
        Agreement executed by Developer and the license fee paid by
        Developer.  Developer shall, however, execute a License Agreement for
        an approved site on the earlier of (i) six months following approval of the
        site
        by Sonic, or (ii) the date construction is to begin (with the earlier of
        such
        dates referred to above as the “Completion Date”).

      

      (c)           Within
        30 days after the receipt of a License Agreement from Sonic for the accepted
        site, Developer shall execute said License Agreement in accordance with Sonic’s
        instructions and return the same along with the applicable license fee to
        Sonic.  The License Agreements for all drive-ins under the Performance
        Schedule shall be in the form attached hereto as Exhibit B.  In the
        event that Sonic does not receive the properly executed License

      
        
          
          

        

        
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       Agreement,
        with the appropriate number of copies, within said 30-day period, Sonic’s
        acceptance of the site as provided in Section 6 hereof shall be void and
        Developer shall have no rights with respect to said site.

      

      (d)           Upon
        receipt by Sonic of the executed License Agreement for said site, Developer
        shall commence construction of the Sonic drive-in restaurant at the site
        in
        accordance with the plans and specifications provided by Sonic and the terms
        of
        the License Agreement and this Agreement.

      

      8.           LIMITATION
        OF AGREEMENT.  Developer acknowledges and agrees
        that:

      

      (a)           This
        Agreement includes only the right to select sites for the construction of
        Sonic
        drive-in restaurants and to submit the same to Sonic for its approval in
        accordance with the terms of this Agreement.  This Agreement does not
        include the grant of a license by Sonic to Developer of any rights to use
        the
        Proprietary Marks, the Sonic System, or to open or operate any Sonic drive-in
        restaurants within the Franchised Area.  Developer shall obtain the
        license to use such additional rights at each Sonic drive-in restaurant upon
        the
        execution of each License Agreement by both Developer and Sonic and only
        in
        accordance with the terms of each License Agreement.

      

      (b)           The
        Developmental Rights granted hereunder are personal to Developer and cannot
        be
        sold, assigned, transferred or encumbered, in whole or in part, except as
        set
        forth in Section 14 hereof.

      

      (c)           The
        Developer shall have no right to use in its name the name “Sonic” or any other
        names or Proprietary Marks used by Sonic.

      

      (d)           Except
        as provided in Section 1 hereof, the Developmental Rights granted hereunder
        are
        nonexclusive, and Sonic retains the right, in its sole discretion:

      

      (i)  To
        acquire the assets or controlling ownership of an existing restaurant within
        the
        Franchised Area.  However, prior to converting an acquired restaurant
        to a Sonic drive-in restaurant or a Non-traditional Location, as defined
        below,
        within the Franchised Area, Sonic shall offer the Developer a right of first
        refusal to acquire the restaurant at a price equal to Sonic’s cost of acquiring
        the restaurant.  If the restaurant represents a part of an acquisition
        of multiple restaurants, Sonic shall make a reasonable allocation of its
        cost to
        acquire the restaurant.  The Developer must inform Sonic of its
        decision regarding the right of first refusal within 30 days after Sonic
        gives
        the Developer written notice of its intention to convert the restaurant to
        a
        Sonic drive-in restaurant or Non-traditional Location.  If the
        Developer chooses to exercise its right of first refusal, the Developer must
        execute Sonic’s then current form of license agreement for a Sonic drive-in
        restaurant or Non-traditional Location and pay the required license fee,
        as
        applicable, within 20 days after the Developer notifies Sonic of its
        decision.  The Developer thereafter shall convert the restaurant to a
        Sonic drive-in restaurant or Non-traditional Location pursuant to the terms
        of
        the applicable license agreement or Sonic shall have the right to repurchase
        the
        restaurant from the Developer at the same purchase price.  If the
        Developer does not exercise its right of first refusal, Sonic shall have
        the
        right, in its sole discretion, to own, operate and/or license other persons
        to
        operate the restaurant in any manner which it deems appropriate, including
        (without limitation) as a Sonic drive-in restaurant or Non-traditional
        Location.

      
        
          
          

        

        
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      (ii)  To
        develop, use and franchise the rights to any trade names, trademarks, service
        marks, trade symbols, emblems, signs, slogans, insignia or copyrights not
        designated by Sonic as Proprietary Marks, for use with similar or different
        franchise systems for the sale of the same, similar or different products
        or
        services other than in connection with the Sonic System at any location,
        on such
        terms and conditions as Sonic may deem advisable and without granting Developer
        any rights therein.

      

      (iii)  To
        own and/or operate and to license any other person to own and/or operate
        Non-traditional Locations within the Franchised Area.  The phrase
“Non-traditional Locations” shall mean food service facilities operating under
        one or more of the Proprietary Marks at locations featuring facilities other
        than free-standing buildings with canopies devoted solely to the operation
        of a
        Sonic drive-in restaurant and accessible to the general public by automobile
        from public thoroughfares.  Non-traditional Locations include (without
        limitation) (a) military bases and other governmental facilities; (b)
        universities and schools; (c) airports and other transportation facilities;
        (d)
        stadiums, arenas and other sports and entertainment venues; (e) amusement
        and
        theme parks; (f) cafeterias and food courts in shopping centers, shopping
        malls,
        office buildings, and industrial buildings; (g) hotels and convention centers;
        (h) hospitals and nursing facilities; and (i) museums, zoos and other public
        facilities.  The phrase “Proprietary Marks” shall mean the distinctive
        and characteristic trade names, trademarks, service marks, and trade dress
        which
        Sonic designates in writing or through usage from time to time as prescribed
        for
        use with the Sonic system, including (without limitation) the terms “Sonic,”
“Happy Eating,” and “America’s Favorite Drive-In”; signs; emblems; menu
        housings; designs; color schemes; standardized premises featuring characteristic
        exterior style, canopies, colors and design (including angled parking stalls
        equipped with menu housings, speakers and tray supports); interior furnishings;
        and equipment layout.  If the Developer is in compliance with this
        Agreement and Sonic elects to own, operate or license a Non-traditional Location
        within the Franchised Area, the Developer shall have a right of first refusal
        to
        license and operate the Non-traditional Location.  The Developer must
        notify Sonic in writing of its decision to license and operate the
        Non-traditional Location within 30 days after Sonic notifies the Developer
        of
        Sonic’s intention to own, operate and/or license the Non-traditional
        Location.  If the Developer chooses to exercise its right of first
        refusal, the Developer must enter into Sonic’s then current form of license
        agreement for a Non-traditional Location for the applicable jurisdiction
        and pay
        the required license fee within 30 days after the Developer notifies Sonic
        of
        its decision.  The Developer then must open the Non-traditional
        Location within the time period specified in the license agreement (if
        specified) or within 12 months after the date of the license agreement (if
        not
        specified).  If the Developer does not execute that agreement within
        the foregoing 30-day period or does not exercise its right of first refusal
        within the foregoing 30-day period, Sonic shall have the right to proceed
        with
        the ownership, operation and/or licensing of the Non-traditional Location
        as
        disclosed to the Developer.  If the owner or operator of a location
        proposed for a Non-traditional Location requires that it serve as the operator
        of the Non-traditional Location (such as a university, sports arenas, hotels,
        or
        other type of location listed above), Sonic shall have the right to proceed
        with
        the licensing of the Non-traditional Location to that owner or operator without
        first offering the Developer the right of first refusal provided for in this
        section.

      
        
          
          

        

        
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      (e)           Developer
        acknowledges that in the event that the Franchised Area is located in a
        Designated Market Area (“DMA”) that Sonic has identified as a “Developing
        Market” that Developer will be required to execute a Developing Market
        Advertising Addendum in the form attached hereto as Exhibit C to each of
        the
        License Agreements entered into for the Sonic drive-ins developed pursuant
        to
        this Agreement.  The Developing Market Advertising Addendum
        acknowledges that the Franchised Area is located in a Developing Market and
        that
        the provisions of Section 11.01(a) of the License Agreement relating to
        Developing Markets shall apply.  Such provisions require that the
        Developer contribute the amount required by the local advertising cooperative
        or
        5%, which ever is higher, of the “gross sales” of its drive-in (as defined in
        the License Agreement) to the local advertising cooperative; however, at
        any
        time Sonic may alternatively designate other uses for any portion of such
        Developing Market contribution if Sonic determines, in its sole discretion,
        that
        there is less need for advertising and a greater need for another
        use.

      

      (f)           Developer
        acknowledges that in the event that the Sonic drive-in restaurants to be
        placed
        In Operation pursuant to the terms of this Agreement represent the first
        three
        drive-ins to be developed by the Developer, that Developer will be required
        to
        execute a Special Training Addendum in the form attached hereto as Exhibit
        D to
        the License Agreements entered into for the first three drive-ins placed
        In
        Operation pursuant to this Agreement.  The Special Training Addendum
        requires that the Developer accept and pay the expenses of the Sonic A-Team,
        a
        special training team, in connection with the opening of Developer’s first three
        Sonic drive-in restaurants.

      

      (g)           Because
        complete and detailed uniformity under many varying conditions may not be
        possible or practical, Sonic specifically reserves the right and privilege,
        at
        its sole discretion and as it may deem in the best interests of all concerned
        in
        any specific instance, to vary any standards for any Developer based upon
        the
        peculiarities of a particular site or circumstance, density of population,
        business potential, population of trade area, existing business practices
        or any
        other condition which Sonic deems to be of importance to the successful
        operation of such Developer’s business.  Developer shall not be heard to
        complain on account of any variation from standard specifications and practices
        granted to any franchise owner and shall not be entitled to require Sonic
        to
        grant Developer a like or similar variation hereunder.

      

      (h)           Developer
        has sole responsibility for the performance of all obligations arising out
        of
        the operation of its business pursuant to this Agreement, including, but
        not
        limited to, the payment when due of any and all taxes levied or assessed
        by
        reason of such operation.

      

      (i)           In
        all public records, in its relationship with other persons, and in any offering
        circular, prospectus or similar document, Developer shall indicate clearly
        the
        independent ownership of Developer’s business and that the operations of said
        business are separate and distinct from the operation of Sonic’s
        business.

      

      (j)           Developer
        agrees to indemnify and hold harmless Sonic from any liability or damage
        Sonic
        may incur, including reasonable attorney fees, as a result of claims, demands,
        costs or judgments of any kind or nature by anyone whomsoever arising out
        of or
        otherwise connected with this Agreement, the Developmental Rights, the
        acquisition of any restaurant site or ownership, maintenance or operation
        of any
        Sonic drive-in restaurant by Developer.

      
        
          
          

        

        
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      (k)           Developer
        agrees to reside within the DMA of each restaurant placed In Operation pursuant
        to this Agreement for as long as the Developer remains the licensee on the
        license agreement for a restaurant placed In Operation.  If Developer
        consists of more than one person or is an entity, the restaurant’s operational
        manager shall be a substantial equity owner in Developer and shall reside
        within
        the DMA of each restaurant placed In Operation as long as the Developer remains
        the licensee on the license agreement for the restaurants placed In
        Operation.

      

      9.           SERVICES
        BY SONIC.  Sonic shall, at its expense, make available to
        Developer the following:

      

      (a)           The
        benefit of Sonic’s experience in the selection of Sonic drive-in restaurant
        sites through the use of Sonic’s Site Acceptance Form, site selection criteria
        and any related materials which Sonic may make available to new licensees
        from
        time to time, and such review thereof as Sonic may undertake as part of its
        evaluation of Developer’s request for site approvals.

      

      (b)           Such
        standard construction plans, specifications and layouts for the structure,
        equipment, decor and signs identified with Sonic drive-in restaurants as
        Sonic
        makes available to all new licensees from time to time.

      

      (c)           Review
        of Developer’s site plan and final construction plans and specifications for
        conformity to the construction standards and specifications of the Sonic
        System,
        upon Sonic’s receipt of Developer’s written request for approval
        thereof.

      

      (d)           Initial
        training in the Sonic System, including standards, methods, procedures and
        techniques will be provided for two persons per license agreement, who may
        be
        the Developer (if he is an individual); a person who has an interest in
        Developer (if Developer is a group of individuals, a corporation, a partnership
        or an unincorporated association or a similar entity), if requested to do
        so by
        Sonic; or a person who is actively involved in the management or operation
        of
        the business of Developer or the operation of any Sonic drive-in restaurant
        placed or to be placed In Operation under this Agreement.  Such
        training shall be at such time and places as Sonic may designate for its
        training program, in its discretion, and shall be subject to the terms of
        each
        License Agreement.

      

      (e)           Such
        periodic continuing individual or group advice, consultation and assistance,
        rendered by personal visit or telephone, or by newsletters or bulletins made
        available from time to time to all Developer’s of Sonic, as Sonic may deem
        necessary or appropriate.

      

      (f)           Such
        bulletins, brochures and reports as may from time to time be published by
        Sonic
        regarding its plans, policies, research, developments and
        activities.

      

      (g)           Such
        other resources and assistance as may hereafter be developed and offered
        by
        Sonic to its licensees.

      
        
          
          

        

        
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      10.           USE
        OF APPROVED SUPPLIERS, TRADE DRESS AND METHODS OF
        OPERATION.  The Developer immediately
        shall support the use and shall use the products and programs of the beverage
        syrup supplier approved by Sonic and used by a majority of all Sonic drive-in
        restaurants, to the exclusion of any other supplier of beverage
        syrup.  In addition, the Developer immediately shall use the
        Developer’s vote or votes in all advertising cooperatives in which the Developer
        participates to support the use of the advertising agency of record for the
        Sonic drive-in restaurant chain.  The Developer shall comply with the
        foregoing provisions not only for all Sonic drive-in restaurants licensed
        pursuant to the terms of the License Agreements issued under this Agreement
        but
        also (to the extent the Developer has the ability) for all other Sonic drive-in
        restaurants for which the Developer serves as a licensee.  With regard
        to any existing Sonic drive-in restaurants, the Developer shall use the
        Developer’s best efforts to accomplish the foregoing, including (in the event of
        any contracts in place prior to August 1, 1995) negotiating in good faith
        and
        assisting and supporting the agency of record or new supplier with the
        assumption, purchase or mutual termination of the contract.

      

      The
        Developer shall use all reasonable
        and appropriate efforts to abide by, follow, support and promote the approved
        trade dress, menu, point-of-sale system, procedures for the preparation and
        service of food and beverage products, marketing and purchasing programs,
        and
        methods of operation for Sonic drive-in restaurants as specified by Sonic
        from
        time to time in the Sonic Operations Manual or
        otherwise.  The approved trade dress shall include (without
        limitation) the existing signs, logotypes and trade dress of Sonic drive-in
        restaurants, as well as any modifications to the signs, logotypes and trade
        dress of the Developer’s restaurants by way of the required modification,
        renovation or retrofit of those restaurants.

      

      The
        terms of this Section 10 shall
        continue in effect during the term of this Agreement and any license agreement
        between the Developer and Sonic, and shall survive the expiration or termination
        of this Agreement.

      

      11.           DEFAULT;  TERMINATION

      

      (a)           The
        occurrence of any of the following events shall constitute a default under
        this
        Agreement:

      

      (i)           If
        Developer shall, in any respect, fail to meet the Performance Schedule, unless
        such failure is due to extraordinary events beyond the control of the Developer
        (such as acts of God, war and the like, but exclusive of matters involving
        the
        financial wherewithal of the Developer). 

      

      (ii)           If
        Developer shall use the Sonic System or Proprietary Marks, or any other names,
        marks, systems, insignia, symbols or rights which are the property of Sonic
        except pursuant to, and in accordance with, a valid and effective License
        Agreement. 

      

      (iii)           If
        Developer, or persons controlling, controlled by or under common control
        with
        Developer, shall have any interest, direct or indirect, in the ownership
        or
        operation of any quick or fast-service restaurant engaged in the sale of
        hamburgers or chili and related products within the Franchised Area or in
        any
        restaurant which looks like, copies or imitates Sonic drive-in restaurants
        or
        operates in a manner tending to have such effect other than in accordance
        with
        Section 16 of any License Agreement.

      
        
          
          

        

        
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      (iv)           If
        Developer shall fail to remit to Sonic any payments pursuant to this Agreement
        when the same are due.

      

      (v)           If
        Developer shall begin work upon any Sonic drive-in restaurant at any site
        unless
        all the conditions set forth in Section 7 hereof have been met.

      

      (vi)           If
        Developer shall purport to effect any assignment other than in accordance
        with
        Section 14 hereof.

      

      (vii)           Except
        as provided in Section 14(a) hereof, if Developer attempts to sell, assign,
        transfer or encumber this Agreement.

      

      (viii)                      If
        Developer makes, or has made, any misrepresentation to Sonic in connection
        with
        obtaining this Development Agreement, any site approval hereunder, or any
        License Agreement.

      

      (ix)           If
        Developer fails to obtain Sonic’s prior written approval or consent as expressly
        required by this Agreement.

      

      (x)           If
        Developer defaults in the performance of any other obligation under this
        Agreement.

      

      (xi)           If
        Developer defaults in the performance of any obligation under any License
        Agreement with Sonic or its Affiliates, regardless of whether or not said
        License Agreement is terminated as a result of such default.

      

      (xii)           If
        Developer, or any person controlling, controlled by or under common control
        with
        Developer, shall become insolvent by reason of inability to pay its debts
        as
        they mature; or if a receiver, permanent or temporary, of the business, assets
        or property of Developer or any such person, or any part thereof, is appointed
        by a court of competent authority; or if Developer or any such person requests
        the appointment of a receiver or makes a general assignment for the benefit
        of
        creditors or if a final judgment against Developer or any such person in
        the
        amount of $15,000 or more remains unsatisfied of record for 30 days or longer
        following the exhaustion of all appeals; or if the bank accounts, property
        or
        receivables of Developer or any such person are attached and such attachment
        proceedings are not dismissed within a 30-day period; or if execution is
        levied
        against the business or property of Developer or any such person or suit
        to
        foreclose any lien (excluding mechanic’s and materialman’s liens) or mortgage
        against any of the Sonic drive-in restaurants, the premises thereof or equipment
        thereon is instituted and not dismissed within 30 days.

      

      (xiii)                      If
        Developer, or any person controlling, controlled by, or under common control
        with Developer, shall be convicted under any law providing for criminal
        penalties (excluding misdemeanors).

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

      (b)           Upon
        occurrence of any of the events set forth in Section 11(a), Sonic may, without
        prejudice to any other rights or remedies contained in this Agreement or
        provided by law or equity, terminate this Agreement.  Such termination
        shall be effective 30 days after written notice (or such other notice as
        may be
        required by applicable state law) is given by Sonic to Developer of any of
        the
        events set forth in Subparagraphs (i) through (xi) of Section 11(a) if such
        defaults are not cured within such period.  Termination shall be
        effective immediately and without notice, however, upon occurrence of any
        of the
        events specified in Subparagraphs (xii) and (xiii) of Section 11(a), except
        where prohibited by state law.

      

      (c)           Upon
        termination of this Agreement for any reason, or upon expiration of the term
        hereof, Developer agrees as follows:

      

      (i)           To
        cease immediately any attempts to select or develop sites on which to construct
        Sonic drive-in restaurants, and

      

      (ii)           To
        cease immediately to hold itself out in any way as a Developer of Sonic or
        to do
        anything which would indicate any relationship between it and Sonic except
        to
        the extent permitted pursuant to Section 11(d).

      

      (d)           Termination
        of this Agreement shall not affect the rights of Developer to operate Sonic
        drive-in restaurants in accordance with the terms of any License Agreement
        with
        Sonic until and unless such License Agreements, or any of them, are terminated
        in accordance with their terms.

      

      If
        any of the provisions of this
        contract governing termination or nonrenewal are inconsistent with Oklahoma
        law,
        then the laws of the State of ______________ shall apply.

      

      12.           RESOLUTION
        OF DISPUTES.  The following provisions shall apply to any
        controversy between the Developer and Sonic (including an Affiliate of Sonic)
        and relating (a) to this Agreement (including any claim that any part of
        this
        Agreement is invalid, illegal or otherwise void or voidable), (b) to the
        parties’ business activities conducted as a result of this Agreement, or (c) the
        parties’ relationship or business dealings with one another generally, including
        all disputes and litigation pending or in existence as of the date of this
        Agreement.

      

      (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 in Oklahoma City, Oklahoma, 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:

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

      (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 Arbitrator.  The parties shall select arbitrator within 10 days
        after the filing of a demand and submission in accordance with the
        Rules.  If the parties fail to agree on the arbitrator within that
        10-day period or fail to agree to an extension of that period, the arbitration
        shall take place before an arbitrator selected in accordance the
        Rules.

      

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

      

      (iv)           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.

      

      (v)           Enforcement
        of Award.  The prevailing party shall have the right to enter the
        award of the arbitrator 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 arbitrator made prior to the
        award.  The award of the arbitrator shall not have any precedential or
        collateral estoppel effect on any other controversy involving Sonic or its
        Affiliates.

      

      (d)           Excluded
        Controversies.  At the election of Sonic or its Affiliate, the
        provisions of this Section 12 shall not apply to any controversies relating
        to
        any fee due Sonic or its Affiliate; any promissory note payments due Sonic
        or
        its Affiliate; or any trade payables due Sonic or its Affiliate as a result
        of
        the purchase of equipment, goods or supplies.  At the election of
        Sonic or its Affiliate, the provisions of this Section 12 also shall not
        apply
        to any controversies relating to the use and protection of the Proprietary
        Marks
        or the Sonic System, including (without limitation) Sonic’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.

      

      13.           DEVELOPER’S
        REPRESENTATIONS. Developer hereby represents
        and warrants to Sonic that the changes to this Agreement and the License
        Agreement (if any) from those terms originally offered to Developer occurred
        at
        the request of Developer and upon negotiation by Developer and
        Sonic.

      

      Developer
        hereby represents to Sonic
        that Developer is entering into this Agreement with the intention of complying
        with the terms and conditions and not for the purpose of resale of the
        Development Rights hereunder.  Therefore, Developer agrees that any
        attempt to assign this Agreement in whole or in part other than in accordance
        with Section 14 shall be deemed an event of default hereunder.

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      14.           ASSIGNMENT,
        CONDITIONS AND LIMITATIONS.

      

      (a)           Developer
        shall neither sell, assign, transfer nor encumber this Agreement, the
        Developmental Rights, or any other interest hereunder, nor suffer or permit
        any
        such assignment, transfer or encumbrance to occur by operation of law or
        otherwise, without the prior written consent of Franchisor.

      

      (b)           In
        the event of the death, disability or permanent incapacity of Developer,
        Sonic
        shall not unreasonably withhold its consent to the transfer of all of the
        interest of Developer to his spouse, heirs or relatives, by blood or marriage,
        whether such transfer is made by will or by operation of law, provided that
        the
        requirements of subsection (d) hereof have been met.  In the event
        that Developer’s heirs do not obtain the consent of Sonic as prescribed herein,
        the personal representative of Developer shall have a reasonable time to
        dispose
        of Developer’s interest hereunder, which disposition shall be subject to all the
        terms and conditions for transfers under this Agreement.

      

      (c)           Sonic
        shall not unreasonably withhold its consent to a transfer of this Agreement
        to a
        business entity that Developer owns and controls provided that the requirements
        of subsection (d) hereof have been met.

      

      (d)           Sonic
        may, in its sole discretion, require any or all of the following requirements
        to
        be met as a condition of its approval of any transfer:

      

      (i)           At
        least 30 days prior to any such proposed assignment, conveyance or transfer,
        Developer or Developer’s representative shall give written notice to Sonic of
        such proposed assignment, conveyance or transfer, setting forth the name
        of the
        person to whom the rights or obligations are to be granted, information related
        to the business background and creditworthiness of the assignee or transferee,
        and any other information which Sonic may ordinarily require to approve a
        franchisee.

      

      (ii)           Developer
        hereby represents and agrees that to the extent his assignee or transferee
        does
        not perform in accordance with this Agreement, Developer shall perform and
        insure that the obligations hereunder are accomplished.

      

      (iii)           Developer
        agrees that Sonic may determine to its satisfaction that any franchise or
        securities laws in the state of the transferee/assignee will be complied
        with in
        the event Developer transfers, conveys or assigns any interest
        herein.  In the event the regulatory authorities of such state require
        that any interest under this Agreement be registered with such authorities,
        Developer agrees to bear the expense of any such registration and provide
        the
        necessary information to Sonic to insure that any such applications or
        registrations with such regulatory authorities are filed in an accurate and
        complete manner.

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

      (e)           In
        the event Developer or its successor is a corporation or partnership or similar
        entity, it is agreed as follows:

      

      (i)           The
        Partnership Agreement, voting stock of or other ownership interest therein
        (“Securities”) shall reflect that the Securities are restricted by the terms of
        this Agreement.  Developer shall furnish Sonic at the time of
        execution of this Agreement or assignment to the corporation or partnership,
        an
        agreement executed by all stockholders or partners of the Developer, stating
        that no stockholder or partner will sell, assign or transfer voluntarily
        or by
        operation of law any Securities of the Developer to any person or entity
        without
        the written consent of Sonic.  All Securities issued by Developer will
        bear the following legend which shall be printed legibly and conspicuously
        on
        each stock certificate or other evidence of ownership interest:

      

      “The
        transfer of these securities is subject to the terms and conditions of a
        Development Agreement with Sonic Industries LLC dated ______________, and
        certain License Agreements executed thereunder.  Reference is made to said
        Development Agreement and to the restrictive provisions of the articles and
        bylaws of this corporation.”

      

      A
        stop transfer order shall be in
        effect against the transfer of any securities on the Developer’s records during
        the term of this agreement, unless the transferee is approved in accordance
        with
        subsection (c) above.

      

      (f)           Sonic’s
        consent to a transfer of Developer’s interest under subsection (b) is expressly
        conditioned upon the continuing personal guarantee of the obligations of
        Developer under this Agreement by all transferees and the execution by said
        transferees of personal guarantees of each License Agreement entered into
        pursuant to this Agreement.

      

      (g)           Developer
        acknowledges and agrees that the restrictions on transfer imposed herein
        are
        reasonable and are necessary to protect the Developmental Rights, the Sonic
        System and the Proprietary Marks, as well as Sonic’s excellent reputation and
        image, and are for the protection of Sonic, Developer and other licensees. 
Any assignment or transfer permitted by this section shall not be effective
        until Sonic receives a completely executed copy of all transfer documents,
        and
        consents in writing.

      

      (h)           This
        Agreement shall inure to the benefit of Sonic, its successors and assigns,
        and
        Sonic shall have the right to transfer or assign all or any part of its interest
        herein to any person or legal entity.

      

      15.           MULTIPLE
        PARTY DEVELOPER. If the Developer consists of
        more than one person or entity, each of those persons and/or entities shall
        have
        joint and several liability under this Agreement.  If the Developer
        consists of more than one person or entity, each of those persons and/or
        entities hereby irrevocably appoint __________________________________________
        as their lawful attorney-in-fact to execute all amendments to this Agreement,
        all License Agreements issued pursuant to this Agreement, all addenda and
        amendments to those License Agreements, and all other documents and instruments
        Sonic may request in connection with this Agreement.  The foregoing
        appointment shall constitute a power coupled with an interest and shall survive
        the death or incapacity of any of the foregoing persons.

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      

      16.           NOTICES

      

      For
        purposes of this section, “notice
        address” shall be:

      

      (a)           If
        to Sonic
        at:                         300
        Johnny Bench Drive

      Oklahoma
        City, Oklahoma
        73104

      Attention:  General
        Counsel

      

      (b)           If
        to Developer
        at:                 ______________________________

      ______________________________

      

      or
        at
        such other address as Sonic or Developer shall have specified by notice to
        the
        other party hereunder.  All notices hereunder shall be in writing and
        shall be duly given and deemed effective as follows:

      

      (i)           if
        by hand delivery to a notice address, notice shall be effective upon
        delivery,

      

      (ii)           if
        sent by receipted, overnight delivery service to a notice address, notice
        shall
        be effective the earlier of receipt by addressee or 24 hours from deposit
        with
        the delivery service, or

      

      (iii)           if
        by registered or certified, postage prepaid mail to a notice address, notice
        shall be effective upon receipt by addressee.

      

      17.           NO
        JOINT VENTURE. Nothing herein contained or
        done pursuant to this Agreement shall be deemed to constitute Developer as
        an
        agent, partner, or joint venturer of Sonic and neither party shall have the
        authority to act for the other in any manner to create obligations or debts
        which would be binding on the other; neither party shall be responsible for
        any
        obligations or expenses whatsoever of the other.

      

      18.           GOVERNING
        LAW.  This Agreement shall be deemed to
        have been made and entered into in the State of Oklahoma and all rights and
        obligations of the parties hereto shall be governed by and construed in
        accordance with the laws of the State of Oklahoma. Developer agrees that
        jurisdiction over Developer and venue exist and are proper and that venue
        shall
        exclusively be within the same federal judicial district where the corporate
        headquarters of Sonic are located and within any and all other courts, whether
        federal, state, or local, located within that district.  Developer
        waives any and all defenses and objections, and Developer agrees not to assert
        any defense or objection to jurisdiction over Developer and to venue as
        described hereinabove regarding any action, proceeding or litigation instituted
        by Sonic against Developer.  Sonic and Developer that any and all
        breaches of this agreement, including breaches occurring after termination,
        cancellation, or expiration of this agreement, shall be deemed to have occurred
        where the corporate headquarters of Sonic are located.

      

      19.           REMEDIES
        CUMULATIVE; WAIVER; CONSENTS. All rights and
        remedies of Sonic and of Developer enumerated in this Agreement shall be
        cumulative and, except as specifically contemplated otherwise by this Agreement,
        none shall exclude any other right or remedy allowed at law or in equity
        and
        said rights or remedies may be exercised and enforced
        concurrently.  No waiver by Sonic or by Developer of any covenant or
        condition or the breach of any covenant or condition of this Agreement to
        be
        kept or performed by the other party shall constitute a waiver by the waiving
        party of any subsequent breach or nonobservance on any other occasion of
        the
        same or any other covenant or condition of this Agreement.  Subsequent
        acceptance by Sonic of any payments due to it hereunder shall not be deemed
        to
        be a waiver by Sonic of any preceding breach by Developer of any terms,
        covenants or conditions of this Agreement.

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      

      Whenever
        this Agreement requires
        Sonic’s prior approval or consent, Developer shall make a timely written request
        to Sonic therefor, and such approval shall be obtained in
        writing.  Sonic will also consider granting, in its sole discretion,
        other reasonable requests individually submitted by Developer in writing
        for
        Sonic’s prior waiver of any obligation imposed by this
        Agreement.  Sonic makes no warranties or guarantees upon which
        Developer may rely, and assumes no liability or obligation to Developer,
        by
        providing any waiver, approval, consent, or suggestion to Developer in
        connection with this Agreement, or by reason of any neglect, delay or denial
        of
        any request therefor.  Unless otherwise consented to in writing, any
        waiver granted by Sonic shall be subject to Sonic’s continuing review, may
        subsequently be revoked for any reason if the violation remains outstanding
        effective upon Developer’s receipt of 20 days prior written notice, and shall be
        without prejudice to any other rights Sonic may have.

      

      20.           SEVERABILITY. If
        any provision of this Agreement or the application of any provision to any
        person or to any circumstances shall be determined to be invalid or
        unenforceable, then such determination shall not affect any other provision
        of
        this Agreement or the application of such provision to any other person or
        circumstance, all of which other provisions shall remain in full force and
        effect, and it is the intention of Sonic and Developer that if any provision
        of
        this Agreement is susceptible of two or more constructions, one of which
        would
        render the provision enforceable and the other or others of which would render
        the provision unenforceable, then the provision shall have the meaning which
        renders it enforceable.

      

      21.           ENTIRE
        AGREEMENT. This Agreement together with all
        License Agreements executed hereunder constitutes the entire agreement between
        Sonic and Developer in respect of the subject matter hereof, and this Agreement
        supersedes all prior and contemporaneous agreements between Sonic and Developer
        in connection with the subject matter of this Agreement.  No officer,
        employee or other servant or agent of Sonic or Developer is authorized to
        make
        any representation, warranty or other promise not contained in this
        Agreement.  No change, termination or attempted waiver of any of the
        provisions of this Agreement shall be binding upon Sonic or Developer unless
        in
        writing and signed by Sonic and Developer.

      

      22.           JOINT
        AND SEVERAL OBLIGATION. If the Developer
        consists of more than one person, their liability under this Agreement shall
        be
        deemed to be joint and several.

      

      23.           COUNTERPART;
        PARAGRAPH HEADINGS; PRONOUNS. This Agreement
        may be executed in any number of counterparts, each of which shall be deemed
        an
        original but all of which together shall constitute one and the same
        instrument.  The section headings in this Agreement are for
        convenience of reference only and shall not be deemed to alter or affect
        any
        provision thereof.  Each pronoun used herein shall be deemed to
        include the other number and genders.

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      

      24.           ACKNOWLEDGMENTS.                                                                Developer
        acknowledges that:

      

      (a)           It
        has conducted an independent investigation of the business contemplated by
        this
        Agreement and recognizes that it involves business risks making the success
        of
        the venture largely dependent upon the business abilities of
        Developer.  Sonic expressly disclaims the making of, and Developer
        acknowledges that it has not received or relied upon, any warranty or guarantee,
        express or implied, as to the potential volume, profits or success of the
        business venture contemplated by this Agreement, including without limitation
        any representation regarding the likelihood of further or timely development
        by
        Sonic Restaurants, Inc. or other developers in the Franchised Area.

      

      (b)           It
        has no knowledge of any representations by Sonic or its officers, directors,
        shareholders, employees, agents or servants about the business contemplated
        by
        this Agreement, that are contrary to the terms of this Agreement or the
        documents incorporated herein, and further represents to Sonic, as an inducement
        to its entry into this Agreement, that it has made no misrepresentations
        in
        obtaining this Agreement.

      

      (c)           It
        has received, read and understood this Agreement, the attachments hereto,
        including the License Agreement attached hereto as Exhibit B; Sonic has fully
        and adequately explained the provisions of each to its satisfaction; and
        Sonic
        has accorded it ample time and opportunity to consult with advisors of its
        own
        choosing about the potential benefits and risks of entering into this
        Agreement.

      

      (d)           It
        is aware of the fact that some present licensees of Sonic may operate under
        different forms of agreement and, consequently, that Sonic’s obligations and
        rights in respect to its various franchise owners may differ materially in
        certain circumstances.

      

      In
        witness of their agreement, the
        parties hereto have duly executed this Agreement as of the day and year first
        written above.

      

      Sonic:                                                                                     Sonic
        Industries LLC

      

      By:
        _________________________________

             (Vice)
        President

      Dated:
        _______________________,
        2007

      

      

      Developer:                                                                                            
        ____________________________________

      

      Dated:
        ______________________, 2007

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

        

      

      EXHIBIT
        A

      TO

      DEVELOPMENT
        AGREEMENT

      

      

      [Description
        of Reserved Area]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

      TO

      DEVELOPMENT
        AGREEMENT

      

      

      [#7
        Form
        of License Agreement]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        C

      TO

      DEVELOPMENT
        AGREEMENT

      

      

      [Developing
        Market Advertising Addendum to License Agreement]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      DEVELOPING
        MARKET ADVERTISING ADDENDUM TO LICENSE 

      AGREEMENT(PRIVATE)

      (CIF
        ______)

      

      Sonic
        Industries LLC (“Sonic”), a
        Delaware limited liability company, and ____________________ (the “Licensee”)
        hereby enter into this Addendum to License Agreement (this “Agreement”) as of
        this   _ day of  , 2007.

      

      Whereas,
        Sonic and the Licensee entered
        into that certain Development Agreement dated the __ day of ___________,
        2007
        (the “Development Agreement”) which provides that in the event the geographical
        area to be developed by Licensee (the “Franchised Area”) is in a Designated
        Market Area (“DMA”) that Sonic has identified as a “Developing Market” that
        Licensee will enter into this Agreement;

      

      Whereas,
        the Franchised Area is in a
        DMA identified by Sonic as a Developing Market;

      

      Now,
        therefore, in consideration of
        Sonic’s and the Licensee’s mutual covenants and agreements contained in this
        Agreement and as required by the Development Agreement, and for other good
        and
        valuable consideration which the parties hereby acknowledge, the parties
        agree
        as follows:

      

      1.  Developing
        Market Advertising.  The parties hereby add the following new
        Section 11.01(i) to the License Agreement:

      

      (i)           Licensee
        acknowledges that the Franchised Area is located in a Designated Market Area
        (“DMA”) that Sonic has identified as a “Developing Market” and that the
        provisions of Section 11.01(a) for Developing Markets shall apply.

      

      2.           Governing
        Law.  The internal laws of Oklahoma shall govern the terms and
        provisions of this Agreement.

      

      3.           Other
        Provisions.  Except to the extent modified by this Agreement, the terms
        and provisions of the License Agreement shall remain in full force and
        effect.

      

      Sonic:                                                                                     Sonic
        Industries LLC

      

      By:
        _________________________________

                                           
        (Vice) President

      

      Licensee:                                                                                               
        ___________________________________

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        D

      TO

      DEVELOPMENT
        AGREEMENT

      

      [Special
        Training Addendum to License Agreement]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SPECIAL
        TRAINING ADDENDUM TO LICENSE AGREEMENT(PRIVATE)

      (CIF
        ______)

      

      Sonic
        Industries LLC (“Sonic”), a
        Delaware limited liability company, and ____________________ (the “Licensee”)
        hereby enter into this Addendum to License Agreement (this “Agreement”) as of
        this   _ day of  , 2007.

      

      Whereas,
        Sonic and the Licensee entered
        into that certain Development Agreement dated the __ day of _______, 2007
        (the
“Development Agreement”) which provides that in the event the Licensee is
        developing its first three Sonic drive-ins, Developer will be required to
        accept
        and pay for the services of the Sonic A-Team, a special training team, and
        will
        enter into this Agreement;

      

      Whereas,
        the Licensee is developing its
        first three Sonic drive-ins;

      

      Now,
        therefore, in consideration of
        Sonic’s and the Licensee’s mutual covenants and agreements contained in this
        Agreement and as required by the Development Agreement, and for other good
        and
        valuable consideration which the parties hereby acknowledge, the parties
        agree
        as follows:

      

      1.  Special
        Training Program.  The parties hereby add the following new
        Section 6.04(c) to the License Agreement:

      

      “(c)           Licensee
        further acknowledges the importance of obtaining proper training of its
        employees during the development of its first drive-ins and agrees to accept
        and
        pay the expenses of the Sonic A-Team, a special training team, in connection
        with the opening of the Sonic Restaurant.”

      

      2.           Governing
        Law.  The internal laws of Oklahoma shall govern the terms and
        provisions of this Agreement.

      

      3.           Other
        Provisions.  Except to the extent modified by this Agreement, the terms
        and provisions of the License Agreement shall remain in full force and
        effect.

      

      Sonic:                                                                                     Sonic
        Industries LLC

      

      By:
        _________________________________

            (Vice)
        President

      

      Licensee:                                                                                                ___________________________________

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

                  

      

      

      SCHEDULE
        I

      

      

      Guaranty
        and Restriction Agreement

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      GUARANTY
        AND RESTRICTION AGREEMENT

      

      The
        undersigned (the “Guarantor”),
        Sonic Industries LLC (“Sonic”), and ___________ (the “Developer”), enter into
        this Guaranty and Restriction Agreement (this “Agreement”) as of the ____ day of
        __________, 2007.

       

                                                                                                                                                                                                   
        W I T N E S S E T H:

      

      Whereas,
        Sonic is entering into a
        Development Agreement (the “Development Agreement”) dated the same date as this
        Agreement with the Developer; and

      

      
        	
                               
                  Whereas, as a condition to entering into the Development Agreement,
                  Sonic
                  has asked that the Guarantor provide a personal guaranty of certain
                  obligations of the Developer set forth in the Development Agreement;
                  and

              

      

      

      
        	
                               
                  Whereas, Sonic also has asked that the Guarantor and the Developer
                  agree
                  to a restriction on the transfer of the equity interests in the
                  Developer;
                  and

              

      

      

      Whereas,
        the Guarantor is willing to
        give a personal guaranty as recited above in accordance with the terms and
        conditions of this Agreement.

      

      Now,
        therefore, in consideration of the
        mutual covenants set forth below and other good and valuable consideration,
        the
        receipt and sufficiency of which the parties hereby acknowledge, the parties
        agree as follows:

      

      1.           Personal
        Guaranty of all Obligations.  The Guarantor hereby guarantees the
        prompt and full payment and performance of the following obligations under
        the
        Development Agreement:

      

      (a)           All
        royalties due Sonic pursuant to the License Agreements entered into by and
        between the Developer and Sonic pursuant to the Development
        Agreement.

      

      (b)           All
        brand contribution fees to the Sonic Brand Fund pursuant to the License
        Agreements entered into by and between the Developer and Sonic pursuant to
        the
        Development Agreement.

      

      (c)           All
        contributions to approved advertising cooperatives pursuant to the License
        Agreements entered into by and between the Developer and Sonic pursuant to
        the
        Development Agreement.

      

      (d)           All
        other duties and financial obligations owing to Sonic or its affiliates by
        the
        Developer relating to the Development Agreement and the Sonic drive-in
        restaurants covered by the License Agreements, including any sign lease
        agreements, entered into by and between the Developer and Sonic pursuant
        to the
        License Agreements.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      (e)           The
        Guarantor hereby approves and agrees to be bound by all duties and financial
        obligations owing to Sonic or its affiliates by the Developer under
        all  existing and future amendments to the Development Agreement
        entered into by Developer and Sonic.

      

      2.           Nature
        of Guaranty.  This guaranty shall constitute an absolute,
        unconditional, irrevocable and continuing guaranty.  Sonic shall not
        have any obligation to take any action against any other person or entity
        for
        collection of any payments prior to making any demand for payment or bringing
        any action against the Guarantor.

      

      3.           Permitted
        Actions.  From time to time, Sonic shall have the right to take,
        permit or suffer to occur any “Permitted Action,” as defined below, without
        modifying, reducing, waiving, releasing, impairing or otherwise affecting
        the
        obligations of the Guarantor under this Agreement, without giving notice
        to the
        Guarantor or obtaining the Guarantor’s consent, without the necessity of any
        reservations of rights against the Guarantor, and without liability on the
        part
        of Sonic.  As used in this Section 3, the phrase “Permitted Action”
shall mean (a) an agreed amendment, extension of time or change in the manner
        or
        place of payment or performance of any financial obligation or duty under
        the
        Development Agreement or the License Agreements, (b) any waiver, leniency
        or
        indulgence by Sonic of any default under the provisions of the Development
        Agreement or the License Agreements and (c) any delay or failure by Sonic
        to
        exercise any right or remedy Sonic may have under the Development Agreement
        or
        the License Agreements.

      

      4.           Waiver
        of Notice of Acceptance.  The Guarantor acknowledges and waives
        notice of Sonic’s acceptance of the Guarantor’s guaranty pursuant to the terms
        of this Agreement.

      

      5.           Restrictions
        on Transfer.  The Developer shall not issue any additional shares
        of capital stock without the prior, written consent of Sonic.  The
        Guarantor shall not transfer, assign or pledge any of its shares of capital
        stock in the Developer to any person without the prior, written consent of
        Sonic.

      

      6.           Disputes.  Any
        dispute between the parties concerning this Agreement will be resolved in
        accordance with the arbitration provisions contained in the Development
        Agreement.

      

      7.           Attorneys’
        Fees, Costs and Expenses.  In any action brought by Sonic to
        enforce the obligations of the Guarantor, Sonic also shall have the right
        to
        collect its reasonable attorneys’ fees, court costs, and expenses incurred in
        the action.

      

      8.           Headings.  The
        headings used in this Agreement appear strictly for the parties’ convenience in
        identifying the provisions of this Agreement and shall not affect the
        construction or interpretation of the provisions of this Agreement.

      

      9.           Binding
        Effect.  This Agreement binds and inures to the benefit of the
        parties and their respective successors, legal representatives, heirs and
        permitted assigns.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      10.           Waiver.  The
        failure of a party to insist in any one or more instances on the performance
        of
        any term or condition of this Agreement shall not operate as a waiver of
        any
        future performance of that term or condition.

      

      11.           Governing
        Law.  Notwithstanding the place where the parties execute this
        Agreement, the internal laws of Oklahoma shall govern the construction of
        the
        terms and the application of the provisions of this Agreement.

      

      12.           Amendments.  No
        amendments to this Agreement shall become effective or binding on the parties,
        unless agreed to in writing by all of the parties.

      

      13.           Time.  Time
        constitutes an essential part of each and every part of this
        Agreement.

      

      14.           Notice.  Except
        as otherwise provided in this Agreement, when this Agreement makes provision
        for
        notice or concurrence of any kind, the sending party shall deliver or address
        the notice to the other party by certified mail, telecopy, or
        nationally-recognized overnight delivery service to the following address
        or
        telecopy number:

      

      Sonic:                                                                                    
        300 Johnny Bench Drive

      Oklahoma
        City, Oklahoma
        73104

      Attention:
        General
        Counsel

      Facsimile
        (405) 225-5973

      Guarantor:                                                                           _____________________________

                                                                                                                   
        _____________________________

      (___)
        ___-____

      

      Developer:                                                                           _____________________________

                                                                                                                   
        _____________________________

      (___)
        ___-____

      

      All
        notices pursuant to the provisions
        of this Agreement shall run from the date that the other party receives the
        notice or three business days after the party places the notice in the United
        States mail.  Each party may change the party’s address by giving
        written notice to the other parties.

      

      Executed
        and delivered as of the day
        and year first set forth above.

      

      Sonic:                                                                                     Sonic
        Industries LLC

      By:
        ________________________________

            (Vice)
        President

      

      Guarantor:                                                                                            
         ____________________________________

      

      Developer:                                                                                           
         ____________________________________

      By:
        _________________________________

             (Vice)
        Presidentexv10w47

 

Exhibit 10.47

RESTRICTED STOCK UNIT

AWARD AGREEMENT

     Pursuant to Section 8 of the 1990 Stock Incentive Plan (the “Plan”) of Schnitzer Steel
Industries, Inc., an Oregon corporation (the “Company”), on <<Date>> the Compensation
Committee of the Board of Directors of the Company authorized and granted to <<RSU
Participant>> (the “Recipient”) an award of restricted stock units with respect to the
Company’s Class A Common Stock (“Common Stock”), subject to the terms and conditions of this
agreement between the Company and the Recipient (this “Agreement”). By accepting this award, the
Recipient agrees to all of the terms and conditions of this Agreement.

     1.      Award and Terms of Restricted Stock Units. The Company awards to the Recipient under the
Plan «RSU_Amount» restricted stock units (the “Award”), subject to the restrictions, terms and
conditions set forth in this Agreement.

          (a)      Rights under Restricted Stock Units. A restricted stock unit (a “RSU”) obligates the
Company, upon vesting in accordance with this Agreement, to issue to the Recipient one share of
Common Stock for each RSU.  The number of shares of Common Stock issuable with respect to each RSU
is subject to adjustment as determined by the Board of Directors of the Company as to the number
and kind of shares of stock deliverable upon any merger, reorganization, consolidation,
recapitalization, stock dividend, spin-off or other change in the corporate structure affecting the
Common Stock generally.

          (b)      Vesting Date. The RSUs awarded under this Agreement shall initially be 100% unvested and
subject to forfeiture.  The Vesting Reference Date of this Award is <<Vesting Reference
Date>>. Subject to Sections 1(c), (d), (e) and (f), the RSUs shall vest in equal annual
installments over five years as follows:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	% of RSUs Vested
	Prior to Vesting Reference Date
	 	 	 	 	 	 	0	%
	First anniversary of the Vesting Reference Date
	 	 	 	 	 	 	20	%
	Second anniversary of the Vesting Reference Date
	 	 	 	 	 	 	40	%
	Third anniversary of the Vesting Reference Date
	 	 	 	 	 	 	60	%
	Fourth anniversary of the Vesting Reference Date
	 	 	 	 	 	 	80	%
	Fifth anniversary of the Vesting Reference Date
	 	 	 	 	 	 	100	%

          (c)      Acceleration on Death, Disability or Retirement. If the Recipient ceases to be an
employee of the Company or a parent or subsidiary of the Company by reason of the Recipient’s
death, disability or retirement, all outstanding but unvested RSUs shall become immediately vested.
The term “disability” means a medically determinable physical or mental condition of the Recipient
resulting from bodily injury, disease, or mental disorder which is likely to continue for the
remainder of the Recipient’s life and which renders the Recipient incapable of performing the job
assigned to the Recipient by the Company or any substantially equivalent replacement job. The term
“retirement” shall mean (i) normal retirement after reaching age 65, (ii) early retirement after
reaching age 55 and completing 10 years of service, or (iii) early retirement after completing 30
years of service without regard to age.

          (d)      Certain Transactions. Notwithstanding any provision in this Agreement, in the event of
dissolution of the Company or a merger, consolidation or plan of exchange affecting the Company,
the Compensation Committee of the Board of Directors (the “Compensation Committee”)

 

 

may, in its sole discretion and to the extent possible under the structure of the applicable
transaction, select one or a combination of the following alternatives for treating this Award of
RSUs:

               (i)      The Award shall remain in effect in accordance with its terms;

               (ii)      All or a portion of the RSUs shall, to the extent then still subject to the vesting
restrictions, be released from the vesting restrictions in connection with the closing of the
applicable transaction; or

               (iii)      The RSUs shall be converted into restricted stock units or restricted stock of one or
more of the corporations that are the surviving or acquiring corporations in the applicable
transaction. The amount and type of converted restricted stock units or restricted stock shall be
determined by the Company, taking into account the relative values of the companies involved in the
applicable transaction and the exchange rate, if any, used in determining shares of the surviving
corporation(s) to be held by holders of shares of the Company following the applicable transaction.
Unless otherwise determined by the Company, by action of the Compensation Committee, the converted
restricted stock units or restricted stock shall continue to be subject to the forfeiture
provisions applicable to the RSUs at the time of the applicable transaction.

          (e)      Special Acceleration in Certain Events. Notwithstanding any other provision in this
Agreement, upon a change in control of the Company, all outstanding but unvested RSUs shall become
immediately vested. The term “change in control of the Company” means the occurrence of any of the
following events:

               (i)      The consummation of:

               (A)      any consolidation, merger or plan of share exchange involving the Company (a
“Merger”) as a result of which the holders of outstanding securities of the Company
ordinarily having the right to vote for the election of directors (“Voting Securities”)
immediately prior to the Merger do not continue to hold at least 50% of the combined voting
power of the outstanding Voting Securities of the surviving corporation or a parent
corporation of the surviving corporation immediately after the Merger, disregarding any
Voting Securities issued to or retained by such holders in respect of securities of any
other party to the Merger; or

               (B)      any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of the Company;

               (ii)      At any time during a period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease
for any reason to constitute at least a majority thereof; provided, however, that the term
“Incumbent Director” shall also include each new director elected during such two-year period whose
nomination or election was approved by two-thirds of the Incumbent Directors then in office; or

               (iii)      Any person shall, as a result of a tender or exchange offer, open market purchases or
privately negotiated purchases from anyone other than the Company, have become the beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Securities representing 20% or more of the combined voting power of the then
outstanding Voting Securities. For purposes of this Section 1(e), the term “person” means and
includes any individual, corporation, partnership, group, association or other “person,” as such
term is used in Section 14(d) of the Securities Exchange Act of 1934, other than the Company or any
employee benefit plan sponsored by the Company.

2

 

Notwithstanding anything in this Section 1(e) to the contrary, unless otherwise determined by the
Board of Directors of the Company, no change in control of the Company shall be deemed to have
occurred for purposes of this Agreement if (1) the Recipient acquires (other than on the same basis
as all other holders of shares of Common Stock of the Company) an equity interest in an entity that
acquires the Company in a change in control of the Company otherwise described under subparagraph
(i) of this Section 1(e), or (2) the Recipient is part of a group that constitutes a person which
becomes a beneficial owner of Voting Securities in a transaction that otherwise would have resulted
in a change in control of the Company under subparagraph (iii) of this Section 1(e).

          (f)      Forfeiture of RSUs on Termination of Service. If the Recipient ceases to be an employee
of the Company or a parent or subsidiary of the Company for any reason that does not result in
acceleration of vesting pursuant to Section 1(c) or 1(d), the Recipient shall immediately forfeit
all outstanding but unvested RSUs awarded pursuant to this Agreement and the Recipient shall have
no right to receive the related Common Stock.

          (g)      Restrictions on Transfer. The Recipient may not sell, transfer, assign, pledge or
otherwise encumber or dispose of the RSUs subject to this Agreement. The Recipient may designate
beneficiaries to receive the shares of Common Stock underlying the RSUs subject to this Agreement
if the Recipient dies before delivery of the shares of Common Stock by so indicating on a form
supplied by the Company. If the Recipient fails to designate a beneficiary, such Common Stock will
be delivered to the person or persons establishing rights of ownership by will or under the laws of
descent and distribution.

          (h)      No Voting Rights; Dividends. The Recipient shall have no rights as a shareholder with
respect to the RSUs or the Common Stock underlying the RSUs until the underlying Common Stock is
issued to the Recipient. The Recipient will be entitled to receive any cash dividends declared on
the Common Stock underlying the RSUs after the RSUs have vested and the Common Stock has been
issued. The Company shall accrue and pay to the Recipient on the vesting of the RSUs an amount in
cash equal to dividends that would have been paid on the Common Stock underlying the RSUs after the
date of the issuance of the RSUs. No interest shall be paid by the Company on accrued amounts.

          (i)      Delivery Date for the Shares Underlying the RSU. As soon as practicable following a date
on which any RSUs vest, the Company will issue the Recipient the Common Stock underlying the then
vested RSUs in the form of uncertificated shares in book entry form. The shares of Common Stock
will be issued in the Recipient’s name or, in the event of the Recipient’s death, in the name of
either (i) the beneficiary designated by the Recipient on a form supplied by the Company or (ii) if
the Recipient has not designated a beneficiary, the person or persons establishing rights of
ownership by will or under the laws of descent and distribution.

          (j)      Taxes and Tax Withholding. The Recipient acknowledges and agrees that no election under
Section 83(b) of the Internal Revenue Code can or will be made with respect to the RSUs. The
Recipient acknowledges that, on each date that shares underlying the RSUs are issued to the
Recipient (the “Payment Date”), the Value (as defined below) on that date of the shares so issued
will be treated as ordinary compensation income for federal and state income and FICA tax purposes,
and that the Company will be required to withhold taxes on these income amounts. To satisfy the
required minimum withholding amount, the Company shall withhold from the shares otherwise issuable
the number of shares having a Value equal to the minimum withholding amount. For purposes of this
Section 6, the “Value” of a share shall be equal to the closing market price for the Common Stock
on the last trading day preceding the Payment Date. Alternatively, the Company may, at its option,
permit the Recipient to pay such withholding amount in cash under procedures established by the
Company.

3

 

          (k)      Not a Contract of Employment. Nothing in the Plan or this Agreement shall confer upon
Recipient any right to be continued in the employment of the Company or any parent or subsidiary of
the Company, or to interfere in any way with the right of the Company or any parent or subsidiary
by whom Recipient is employed to terminate Recipient’s employment at any time or for any reason,
with or without cause, or to decrease Recipient’s compensation or benefits.

     2.      Miscellaneous.

          (a)      Entire Agreement; Amendment. This Agreement and the Plan constitute the entire agreement
of the parties with regard to the subjects hereof.

          (b)      Interpretation of the Plan and the Agreement. The Compensation Committee shall have the
sole authority to interpret the provisions of this Agreement and the Plan and all determinations by
it shall be final and conclusive.

          (c)      Electronic Delivery. The Recipient consents to the electronic delivery of notices and any
prospectus and any other documents relating to this Award in lieu of mailing or other form of
delivery.

          (d)      Rights and Benefits. The rights and benefits of this Agreement shall inure to the benefit
of and be enforceable by the Company’s successors and assigns and, subject to the restrictions on
transfer of this Agreement, be binding upon the Recipient’s heirs, executors, administrators,
successors and assigns.

          (e)      Further Action. The parties agree to execute such instruments and to take such action as
may reasonably be necessary to carry out the intent of this Agreement.

          (f)      Governing Law. This Agreement and the Plan will be interpreted under the laws of the
state of Oregon, exclusive of choice of law rules.

	 	 	 	 	 
	 	 	SCHNITZER STEEL INDUSTRIES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Officer

 

4

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