FORM OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT
EXHIBIT
C
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
Xxxx
X.
Xxxxxxx
(“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.
2
3. Each
of
the Parent and Stockholder hereby further expressly waives its or his respective
rights to a jury trial of any claim or cause of action based upon or arising
out
of this Agreement or any transaction contemplated by this Agreement or any
other
dealings between them relating to the subject matter of this Agreement. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that related to the subject matter of this
transaction, including without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. The Parent and
Stockholder further warrant and represent that each has reviewed this waiver
with its legal counsel; and that each voluntarily waives its jury trial rights
following consultation with legal counsel. This waiver is irrevocable and may
only be modified in amendments, renewals, supplements or modifications to this
Agreement, and any other transaction documents. In the event of litigation,
this
Agreement may be filed as a written consent to trial (without a jury) by the
court.
C. Acknowledgment.
STOCKHOLDER HAS READ AND UNDERSTANDS THIS ARTICLE 2, WHICH DISCUSSES REMEDIES,
CONFLICT RESOLUTION AND WAIVER OF JURY TRIAL. STOCKHOLDER UNDERSTANDS THAT
BY
SIGNING THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT, THE SELLING
STOCKHOLDER AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT, OR THE
INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION
THEREOF TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES OF AMERICA AND STATE
OF ARIZONA COURTS LOCATED IN THE COUNTY OF MARICOPA, AND THAT THIS CLAUSE
CONSTITUTES A WAIVER OF STOCKHOLDER’S RIGHT TO A JURY TRIAL.
ARTICLE
3
MISCELLANEOUS
A. Entire
Agreement.
This
Agreement (and the agreements referenced herein), between the Parent, the
Company and Stockholder embodies the entire agreement and understanding of
the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements and understandings between the parties with respect to
the
subject matter hereof.
B. Amendment
and Modification.
This
Agreement may be amended or modified only by written agreement of the parties
hereto.
C. Waiver.
Any
failure of Stockholder to comply with any of its obligations or agreements
herein contained may be waived only in writing by the Parent. Any failure of
the
Parent to comply with any of its obligations or agreements herein contained
may
be waived only in writing by Stockholder. No waiver of any breach, failure,
right or remedy contained in or granted by the provisions of the Agreement
shall
constitute a continuing waiver of a subsequent or other breach, failure, right
or remedy unless the writing so specifies.
3
D. Representations
and Warranties.
Each
party represents and warrants that this Agreement is a legal, valid and binding
obligation, enforceable against the party in accordance with its terms to the
fullest extent permitted under applicable federal, state or local law.
E. Notices.
All
notices and other communications hereunder shall be in writing and shall be:
(a)
sent by facsimile transmission (effective when receipt is acknowledged unless
sent on a non-Business Day or after 5:00 p.m. on any Business Day, in which
event notice shall be deemed received on the next Business Day); (b) personally
delivered (effective upon personal delivery); or (c) sent by a nationally
recognized commercial overnight delivery service with provisions for a receipt,
delivery charges prepaid (effective upon receipt); and shall be addressed to
the
Parties, as follows:
1.
If to
the Parent or the Company, to:
0000
Xxxxxxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxxxxxxx X. Xxxxxx
Telephone:
000-000-0000
Facsimile:
000-000-0000
With
a
copy to:
Xxxxxx
X.
Xxxxxxx, Xx., Esq.
Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP.
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
2.
If to
Stockholder, to:
_____________________
_____________________
_____________________
Attention:
Xxxx X. Xxxxxxx
Telephone:
000-000-0000
Facsimile:
000-000-0000
With
a
copy to:
Xxxxxxx
& Xxxxx, P.A.
Third
Floor Camelback Esplanade II
0000
Xxxx
Xxxxxxxxx Xxxx
Xxxxxxx,
XX 00000-0000
Attention:
Xxxxxxxxx Xxxxxx, Esq.
Telephone:
000-000-0000
Facsimile:
000-000-0000
4
Any
Party
may change its address by giving notice to the other Parties of a new address
in
accordance with the foregoing provisions. For a period of 3 years after the
Closing Date, upon any change of any contact information for Stockholder,
Stockholder will provide the Parent with such change so that during such period,
the Parent is at all times in possession of the mailing address, telephone
number and facsimile number at which Stockholder can be reached.
F. Necessity
of Restrictions.
The
parties acknowledge and agree that the covenants and agreements contained in
this Agreement have been negotiated in good faith by the parties, and are
reasonable and are not more restrictive or broader than necessary to protect
the
interests of the Parent and the Business, and would not achieve their intended
purpose if they were on different terms or for periods of time shorter than
the
periods of time provided herein or applied in more restrictive geographical
areas than are provided herein. Each party further acknowledges that the Parent
would not enter into the Merger Agreement (and consummate the transactions
contemplated thereby) in the absence of the covenants and agreements contained
in this Agreement and that such covenants and agreements are essential to
protect the Business.
G. Severability.
Any
provision of this Agreement which is invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability, without affecting in any way
the remaining provisions hereof in such jurisdiction or rendering that or any
other provision of this Agreement invalid, illegal or unenforceable in any
other
jurisdiction. In furtherance of and not in limitation to the foregoing, should
the duration or geographical extent of, or business activities covered by any
provision of this Agreement be in excess of that which is valid and enforceable
under applicable law, then such provisions shall be construed to cover only
that
duration, extent or activities which may be valid and enforceable. To the extent
any provision of this Agreement shall be declared invalid or unenforceable
for
any reason by any Governmental Entity in any jurisdiction, this Agreement (or
provision thereof) shall remain valid and enforceable in each other jurisdiction
where it applies. Stockholder acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement shall be given the
construction which renders its provisions valid and enforceable to the maximum
extent (not exceeding its express terms) possible under applicable
law.
H. Binding
Effect; Benefits.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns; nothing in this
Agreement, express or implied, is intended to confer on any Person other than
the parties and their respective successors and permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.
I. Assignability.
No party
may assign, delegate, or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of each other party
hereto except that the Parent may sell, transfer or assign, in whole or from
time to time in part, to one or more of its Affiliates, all or a portion of
the
shares of the Common Stock of the Surviving Corporation, but no such sale,
transfer or assignment shall relieve the Parent of its obligations hereunder.
Any purported violation of this Section 3.I. shall be void.
5
J. Independent
Review and Advice.
Stockholder represents and warrants that the Stockholder has carefully read
this
Agreement; that Stockholder executes this Agreement with full knowledge of
the
contents of this Agreement, the legal consequences thereof, and any and all
rights which each party may have with respect to one another; that Stockholder
has had the opportunity to receive independent legal advice with respect to
the
matters set forth in this Agreement and with respect to the rights and asserted
rights arising out of such matters, and that Stockholder is entering into this
Agreement of Stockholder’s own free will. Stockholder expressly agrees that
there are no exceptions contrary to the Agreement and no usage of trade or
regular practice in the industry shall be used to modify the Agreement. Any
rule
of construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in interpreting this Agreement. The parties
agree
that this Agreement shall not be construed for or against either party in any
interpretation thereof.
K. Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this Agreement.
L. Counterparts.
This
Agreement may be executed in any number of counterparts (including by facsimile
signature), each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
[Signature
page follows.]
6
IN
WITNESS WHEREOF, the parties have executed this Non-Competition and
Non-Solicitation Agreement effective as of the date first written
above.
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OREGANO’S
PIZZA BISTRO, INC.
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Name:
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Title:
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Name:
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Title:
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STOCKHOLDER
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Signature
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Print
Name
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Address:
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Signature Page to the Non-Competition and Non-Solicitation Agreement
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