EXHIBIT C
FORM OF NON-COMPETITION AND NON-SOLICITATION
AGREEMENT
This
Non-Competition and Non-Solicitation Agreement (this
“
Agreemen t”)
is made and entered into this -______ day of _________, 2008 by and
among Oregano’s Pizza Bistro, Inc., an Arizona corporation
(the “
Company ”),
Restaurant Acquisition Partners, Inc., a Delaware corporation
(“
Parent ”)
and Mark
S. Russell (“
Stockholder ”).
RECITALS
A.
Pursuant to the Agreement and Plan of Merger dated as of
June__
,
2008 (the “
Merger Agreement ”),
by and among Parent, Oregano’s Acquisition, Inc., an Arizona
Corporation and a wholly-owned subsidiary of Parent,
Oregano’s Holdings LLC, a Delaware LLC, Stockholder and the
Company, the Company will become a wholly-owned subsidiary at the
Effective Time.
B.
From and after the Closing Date, the Company will be engaged,
directly or indirectly, in the business of owning, operating and
franchising full service, casual, Pizza Bistro restaurants
featuring a moderately priced menu specializing in Chicago-style
thin crust and stuffed pizzas, and unique recipes for pastas,
sandwiches and salads in facilities designed to evoke the character
of Old Town Chicago in Arizona (the “
Business ”).
C.
The parties acknowledge that the relevant market for the Business
is in the West and Midwest United States and that there exists
intense competition amongst full-service casual dining
restaurants.
D.
Stockholder is a key employee and a stockholder of the Company, and
has detailed knowledge of the Company’s confidential and
proprietary information of the Company.
E.
Stockholder has a material economic interest in the consummation of
the transactions contemplated by the Merger Agreement and, in order
to induce the Parent to consummate these transactions, Stockholder
has agreed to enter into this Agreement.
F.
In order to protect goodwill, trade secrets and other confidential
and proprietary information related to the Business, the Parent and
Stockholder have agreed that the Parent’s obligation to
consummate the transactions contemplated by the Merger Agreement is
subject to the condition, among others, that Stockholder shall have
entered into this Agreement.
G.
Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Merger Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual
covenants and agreements hereinafter set forth, Stockholder
and the Parent, intending to be legally bound, hereby agree as
follows:
ARTICLE
1
NON-COMPETITION
A.
Acknowledgement .
The parties acknowledge and agree that (a) Stockholder has
significant knowledge and information concerning the Company, which
shall be purchased by Parent pursuant to the Merger Agreement,
(b) Stockholder
has, directly or indirectly, received substantial benefit from the
transaction contemplated by the Merger Agreement
and (c) the Company is presently doing business in Arizona, and
expects to expand throughout the West and Midwest. (collectively,
the “
Covered Area ”).
B.
Non-Competition .
In
order to protect the Company’s Business including, without
limitation, the goodwill of the Company’s Business which is
being acquired by the Parent pursuant to the Merger Agreement; and
as an inducement for the Parent and Merger Sub to enter into the
Merger Agreement and as a condition precedent to the consummation
of the transactions contemplated therein, Stockholder
agrees that for a period of three (3) years, commencing on the
Closing Date (the “
Non-Compete Period ”),
Stockholder shall not anywhere in the Covered Area, directly or
indirectly, without the express prior written consent of the
Parent, engage in any business or activity, whether in
Stockholder’s capacity as an employee, consultant, partner,
principal, agent, representative, equity holder of any Person
(other than the Parent or its Affiliates) or in any other
individual, corporate or representative capacity (without
limitation by specific enumeration of the foregoing), own or render
any services or provide any advice to any business, activity or
Person involving the Business, if Stockholder knows or reasonably
should know that such business, activity or Person engages in the
Business. Notwithstanding the foregoing, Stockholder may (a) render
any services as an employee or consultant to any subsidiary,
division or other business unit of a corporation engaged in the
Business as long as (i) such subsidiary, division or other business
unit is not engaged in the Business and (ii) Stockholder does not
engage in any business or activity or render any services or
provide any advice involving the Business, (b) own or render
services to restaurants that are not engaged in the Business,
including “fine dining concepts” and (c) own, directly
or indirectly, up to one percent (1%) of any class of
“publicly-traded securities” of any Person which owns
or operates a business involving the Business. For the purposes of
this Section 1.B, “publicly-traded securities” shall
mean securities that are traded on a national securities exchange
of the United States or any European Union member country or listed
on the NASDAQ Global Market.
C.
No Interference with the Business; Non-Solicitation
.
Additionally, in order to protect the Company’s Business
including, without limitation, the goodwill of the Company which is
being acquired by the Parent pursuant to the Merger Agreement; and
as a further an inducement for the Parent and Merger Sub to enter
into the Merger Agreement and as a condition precedent to the
consummation of the transactions contemplated therein, Stockholder
agrees that during the Non-Compete Period, at any time or for any
reason, Stockholder shall not, directly or indirectly, (a) with
respect to the Business, solicit or divert any business or clients
or customers made known to Stockholder during his employment or
consulting relationship (such relationship, the “
Service Provider Relationship ”)
with the Company or the Parent away from the Parent and/or its
Affiliates; (b) induce customers, clients, suppliers, agents or
other Persons under contract or otherwise associated or doing
business with the Parent and/or its Affiliates made known to
employee during his Service Provider Relationship with the Company
or the Parent, to reduce or alter any such association or business
with the Parent and/or its Affiliates; and/or (c) knowingly solicit
any Person in the employment of the Parent and/or its Affiliates
(other than via a general advertisement or other solicitation not
addressed specifically to such Person)to (i) terminate such
employment, and/or (ii) accept employment, or enter into any
consulting arrangement, with any Person other than the Parent
and/or its Affiliates. For purposes of this Agreement,
“
Affiliate ”
shall mean any Person under common control with the Parent within
the meaning of Sections 414(b), (c), (m) and (o) of the United
States Internal Revenue Code of 1986, and the regulations issued
thereunder, including the Company.
ARTICLE
2
REMEDIES
AND CONFLICT RESOLUTION
A.
Remedies .
(1)
The
parties to this Agreement agree that (i) if Stockholder
materially breaches Article 1 of this Agreement, the damage to
the Parent may be substantial, although difficult to
ascertain, and money damages will not afford the Parent an
adequate remedy, and (ii) if Stockholder is in material breach
of any provision of this Agreement, or threatens a breach of
Article 1 of this Agreement, the Parent shall be entitled, in
addition to all other rights and remedies as may be provided
by law, to seek specific performance and injunctive and other
equitable relief to prevent or restrain a breach of any
provision of this Agreement, notwithstanding Section 2.B of
this Agreement.
(2)
All
of the remedies expressly provided for in this Agreement are
cumulative of any and all other remedies that the Parent might
have at law or in equity. In addition to the remedies provided
for in this Agreement, the Parent shall be entitled to avail
itself of all such other remedies as might now or hereafter
exist at law or in equity for compensation and for the
specific enforcement of the covenants and agreements of
Stockholder
contained
herein. Resort to any remedy provided for in th
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