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EXHIBIT
C
FORM
OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT
This
Non-Competition and Non-Solicitation Agreement (this “Agreement”)
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.
1
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 this Agreement or by
law
shall not prevent the concurrent or subsequent use of any other appropriate
remedy or remedies and shall not preclude recovery by the Parent of monetary
damages.
B. Governing
Law; Consent to Jurisdiction and Waiver of Jury Trial.
1. This
Agreement shall be governed by and construed in accordance with the internal
substantive laws and not the choice of law rules of the State of A.
2. Any
proceeding brought with respect to, arising out of or relating to this Agreement
must be brought in any court of competent jurisdiction in Maricopa County of
Arizona
and,
by
execution and delivery of this Agreement, each party (i) accepts, generally
and
unconditionally, and irrevocably submits to, the exclusive jurisdiction of
such
courts and any related appellate courts and irrevocably agrees to be bound
by
any judgment rendered thereby in connection with this Agreement and (ii) fully,
irrevocably and unconditionally waives any objection or defense it may now
or
hereafter have as to the venue of any such proceeding brought in such a court
or
that such court is an inconvenient forum. Each of the parties further agrees
that service of any notice, process, summons or other document to such party’s
respective address listed herein in one of the manners set forth in Section
3.E
below shall be deemed in every respect effective service of process in any
such
proceeding. Nothing herein shall affect the right of any Person to serve process
in any other manner permitted by applicable law.
