EXECUTION
            COPY
 

      

    

    
      

    

    
      

    

     

    AGREEMENT
      AND PLAN OF MERGER

     

    BY
      AND
      AMONG

     

    RESTAURANT
      ACQUISITION PARTNERS, INC.,

     

    OREGANO’S
      ACQUISITION, INC.,

     

    OREGANO’S
      HOLDINGS LLC,

     

    OREGANO’S
      PIZZA BISTRO, INC.

     

    AND

     

    MARK
      S.
      RUSSELL,

     

    THE
      SOLE
      SHAREHOLDER OF OREGANO’S PIZZA BISTRO, INC.

     

     

    DATED
      AS
      OF JUNE 19, 2008

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    
      	 	 	
              Page

            
	 	 	 
	
              ARTICLE
                I

            
	 	 	 
	
              THE
                TRANSACTION

            
	 
	
              Section
                1.1

            	
              The
                First Merger

            	
              2

            
	
              Section
                1.2

            	
              Effective
                Time; Closing

            	
              2

            
	
              Section
                1.3

            	
              Effects
                of the First Merger

            	
              2

            
	
              Section
                1.4

            	
              Effect
                on Capital Stock

            	
              3

            
	 	
              (a)
                Company Common Stock

            	
              3

            
	 	
              (e)
                Capital Stock of Merger Sub

            	
              4

            
	 	
              (f)
                Cancellation of Treasury and Parent-Owned Stock

            	
              4

            
	 	
              (g)
                Cancellation and Retirement of Company Common Stock

            	
              
                5

              

            
	 	 	
               

            
	
              Section
                1.5

            	
              Surrender
                of Certificates

            	
              
                5

              

            
	 	
              (b)
                Exchange Procedures

            	
              5

            
	 	
              (c)
                Transfers of Ownership

            	
              5

            
	 	 	
               

            
	
              Section
                1.6

            	
              No
                Further Ownership Rights in Company Stock

            	
              5

            
	
              Section
                1.7

            	
              Lost,
                Stolen or Destroyed Certificates

            	
              6

            
	
              Section
                1.8

            	
              No
                Liability

            	
              6

            
	
              Section
                1.9

            	
              Required
                Withholding

            	
              6

            
	
              Section
                1.10

            	
              Taking
                of Necessary Action; Further Action

            	
              6

            
	
              Section
                1.11

            	
              [Reserved]

            	
              7

            
	
              Section
                1.12

            	
              [Reserved]

            	
              7

            
	
              Section
                1.13

            	
              No
                Fractional Shares of Parent Common Stock, Rounding of Cash
                Amounts

            	
              7

            
	
              Section
                1.14

            	
              Holdback
                Shares

            	
              7

            
	
              Section
                1.15

            	
              Rule
                145

            	
              7

            
	
              Section
                1.16

            	
              Shareholder
                Matters

            	
              7

            
	
              Section
                1.17

            	
              The
                Second Merger

            	
              8

            


    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    
      	
              ARTICLE
                II

            
	 	 	 
	
              MERGER
                CONSIDERATION ADJUSTMENTS

            
	 
	
              Section
                2.1

            	
              Preparation
                of the Company’s Statement

            	
              9

            
	
              Section
                2.2

            	
              Preliminary
                Closing Statement

            	
              10

            
	
              Section
                2.3

            	
              Review
                of Statement

            	
              10

            
	
              Section
                2.4

            	
              Disputes;
                Final Closing Statement

            	
              11

            
	
              Section
                2.5

            	
              Closing
                Statement Adjustments

            	
              11

            
	
              Section
                2.6

            	
              Payment
                of Total Holdback Shares

            	
              12

            
	
              Section
                2.7

            	
              Restaurant
                Earn-Out Amount

            	
              12

            


    

     

    
      	
              ARTICLE
                III

            
	 	 	 
	
              REPRESENTATIONS
                AND WARRANTIES OF RUSSELL AND THE COMPANY

            
	 
	
              Section
                3.1

            	
              Organization
                and Qualification

            	
              13

            
	
              Section
                3.2

            	
              No
                Subsidiaries

            	
              14

            
	
              Section
                3.3

            	
              Capitalization

            	
              14

            
	
              Section
                3.4

            	
              Authority
                Relative to this Agreement

            	
              15

            
	
              Section
                3.5

            	
              No
                Conflict; Required Filings and Consents

            	
              16

            
	
              Section
                3.6

            	
              Compliance

            	
              16

            
	
              Section
                3.7

            	
              Financial
                Statements

            	
              17

            
	
              Section
                3.8

            	
              No
                Undisclosed Liabilities

            	
              17

            
	
              Section
                3.9

            	
              Absence
                of Certain Changes or Events

            	
              18

            
	
              Section
                3.10

            	
              Litigation

            	
              18

            
	
              Section
                3.11

            	
              Employee
                Benefit Plans and Compensation.

            	
              19

            
	
              Section
                3.12

            	
              Employees

            	
              21

            
	
              Section
                3.13

            	
              Restrictions
                on Business Activities

            	
              22

            
	
              Section
                3.14

            	
              Personal
                Property

            	
              22

            
	
              Section
                3.15

            	
              Real
                Property

            	
              22

            
	
              Section
                3.16

            	
              Title
                to Assets; Condition of Assets

            	
              23

            
	
              Section
                3.17

            	
              Tax
                Matters

            	
              23

            


    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    
      	
              Section
                3.18

            	
              Environmental
                Matters

            	
              24

            
	
              Section
                3.19

            	
              Brokers
                and Finders

            	
              25

            
	
              Section
                3.20

            	
              Intellectual
                Property

            	
              25

            
	
              Section
                3.21

            	
              Agreements,
                Contracts and Commitments

            	
              27

            
	
              Section
                3.22

            	
              Insurance

            	
              29

            
	
              Section
                3.23

            	
              Affiliate
                Interests

            	
              30

            
	
              Section
                3.24

            	
              Board
                Approval

            	
              30

            
	
              Section
                3.25

            	
              Shareholder
                Approval

            	
              30

            
	
              Section
                3.26

            	
              Proxy
                Statement

            	
              30

            
	
              Section
                3.27

            	
              [Reserved]

            	
              31

            
	
              Section
                3.28

            	
              Distributors,
                Suppliers and Customers

            	
              31

            
	
              Section
                3.29

            	
              Product
                Liabilities

            	
              31

            
	
              Section
                3.30

            	
              No
                Other Agreements to Purchase

            	
              31

            
	
              Section
                3.31

            	
              Representations
                and Warranties Complete

            	
              31

            
	
              Section
                3.32

            	
              Bank
                Accounts

            	
              32

            
	
              Section
                3.33

            	
              Powers
                of Attorney

            	
              32

            
	
              Section
                3.34

            	
              Total
                Indebtedness

            	
              32

            


    

     

    
      	
              ARTICLE
                IV

            
	 	 	 
	
              REPRESENTATIONS
                AND WARRANTIES OF PARENT, MERGER SUB AND OREGANO LLC

            
	 
	
              Section
                4.1

            	
              Organization
                and Qualification

            	
              31

            
	
              Section
                4.2

            	
              Authority
                Relative to this Agreement

            	
              32

            
	
              Section
                4.3

            	
              No
                Conflict; Required Filings and Consents

            	
              32

            
	
              Section
                4.4

            	
              Compliance

            	
              33

            
	
              Section
                4.5

            	
              SEC
                Filings; Financial Statements

            	
              33

            
	
              Section
                4.6

            	
              Litigation

            	
              33

            
	
              Section
                4.7

            	
              Brokers
                and Finders

            	
              33

            
	
              Section
                4.8

            	
              Trust
                Fund

            	
              34

            


    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    
      	
              ARTICLE
                V

            
	 	 	 
	
              CONDUCT
                PRIOR TO THE EFFECTIVE TIME

            
	 
	
              Section
                5.1

            	
              Conduct
                of Business by Company

            	
              35

            


    

     

    
      	
              ARTICLE
                VI

            
	 	 	 
	
              ADDITIONAL
                AGREEMENTS

            
	 
	
              Section
                6.1

            	
              Proxy
                Statement; Parent Stockholders’ Meeting

            	
              39

            
	
              Section
                6.2

            	
              Certain
                Matters

            	
              40

            
	
              Section
                6.3

            	
              Other
                Actions

            	
              40

            
	
              Section
                6.4

            	
              Required
                Information

            	
              41

            
	
              Section
                6.5

            	
              Confidentiality;
                Access to Information

            	
              41

            
	 	
              (a)
                Confidentiality

            	
              41

            
	 	
              (b)
                Access to Information

            	
              42

            
	
              Section
                6.6

            	
              Public
                Disclosure

            	
              42

            
	
              Section
                6.7

            	
              Commercially
                Reasonable Efforts

            	
              43

            
	
              Section
                6.8

            	
              No
                Securities Transactions

            	
              43

            
	
              Section
                6.9

            	
              Certain
                Claims

            	
              43

            
	
              Section
                6.10

            	
              No
                Solicitation

            	
              44

            
	
              Section
                6.11

            	
              Benefit
                Arrangements

            	
              44

            
	
              Section
                6.12

            	
              Company
                Actions

            	
              44

            
	
              Section
                6.13

            	
              Fees
                and Expenses

            	
              44

            
	
              Section
                6.14

            	
              Stock
                Incentive Plan

            	
              45

            
	
              Section
                6.15

            	
              Tax
                Matters

            	
              45

            
	
              Section
                6.16

            	
              Shareholder
                Approval

            	
              46

            
	
              Section
                6.17

            	
              No
                Claim Against Trust Fund

            	
              46

            
	
              Section
                6.18

            	
              Parent
                Common Stock Lockup

            	
              47

            
	
              Section
                6.19

            	
              Audited
                Financials

            	
              47

            
	
              Section
                6.20

            	
              Company
                Liabilities

            	
              47

            


    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    
      	
              ARTICLE
                VII

            
	 	 	 
	
              CONDITIONS
                TO THE FIRST MERGER

            
	 
	
              Section
                7.1

            	
              Conditions
                to Obligations of Each Party to Effect the First Merger

            	
              47

            
	 	
              (a)
                Regulatory Consent

            	
              48

            
	 	
              (b)
                No Order

            	
              48

            
	 	
              (c)
                Governmental Restrictions

            	
              48

            
	 	
              (d)
                Parent Stockholder Approval

            	
              48

            
	
              Section
                7.2

            	
              Additional
                Conditions to Obligations of Russell and the Company

            	
              48

            
	 	 	 
	 	
              (a)
                Representations and Warranties

            	
              48

            
	 	
              (b)
                Agreements and Covenants

            	
              48

            
	 	
              (c)
                Real Estate Purchase Agreement

            	
              49

            
	 	
              (d)
                Registration Rights Agreement

            	
              49

            
	 	 	 
	
              Section
                7.3

            	
              Additional
                Conditions to the Obligations of the Parent and Merger Sub

            	
              49

            
	 	
              (a)
                Representations and Warranties

            	
              49

            
	 	
              (b)
                Agreements and Covenants

            	
              49

            
	 	
              (c)
                [Reserved]

            	
              49

            
	
               

            	
              
                (d)
                  Consents

              

            	
              49

            
	 	
              (e)
                Material Adverse Effect

            	
              49

            
	 	
              (f)
                Financial Statements

            	
              49

            
	 	
              (g)
                Resignations

            	
              50

            
	 	
              (h)
                Shareholder Approval

            	
              50

            
	 	
              (i)
                Shareholder List

            	
              50

            
	 	
              (j)
                Non-Competition Agreement

            	
              50

            
	 	
              (k)
                Parent Common Stock

            	
              50

            
	 	
              (l)
                GE Financing

            	
              50

            
	 	
              (m)
                Pay-off Letters

            	
              50

            
	 	
              (n)
                Charter Documents

            	
              50

            
	 	
              (o)
                Evidence of Termination of Certain Agreements

            	
              50

            
	 	
              (p)
                Real Estate Purchase Agreement

            	
              50

            
	 	
              (q)
                Transferred Property

            	
              51

            
	 	
              (r)
                Estoppel Certificates

            	
              51

            
	 	
              (s)
                Tax Audits

            	
              51

            


    

     

    
      	
              ARTICLE
                VIII

            
	 	 	 
	
              INDEMNIFICATION

            
	 
	
              Section
                8.1

            	
              Indemnification

            	
              51

            
	 	
              (a)
                Indemnification by the Company Stockholders

            	
              51

            
	 	
              (b)
                Indemnification by the Parent

            	
              52

            
	 	
              (c)
                Certain Limitations

            	
              53

            
	 	
              (d)
                Survival Generally

            	
              54

            
	 	
              (e)
                Tax Survival

            	
              54

            
	 	
              (f)
                Employee Benefits Survival

            	
              54

            
	 	
              (g)
                [Reserved]

            	
              54

            
	 	
              (h)
                Other Survival

            	
              54

            
	 	
              (i)
                Claims for indemnification

            	
              55

            
	 	
              (j)
                Notice and Opportunity to Defend

            	
              55

            
	 	 	 
	
              Section
                8.2

            	
              Offset
                Rights.

            	
              56

            
	
              Section
                8.3

            	
              Resolution
                of Claims

            	
              56

            


    

     

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

    
      	
              ARTICLE
                IX

            
	 	 	 
	
              CLOSING
                AND TERMINATION

            
	 
	
              Section
                9.1

            	
              Closing

            	
              57

            
	
              Section
                9.2

            	
              Closing
                Deliverables

            	
              57

            
	
              Section
                9.3

            	
              Termination

            	
              58

            
	
              Section
                9.4

            	
              Effect
                of Termination

            	
              59

            


    

     

    
      	
              ARTICLE
                X

            
	 	 	 
	
              DEFINED
                TERMS

            


    

     

    
      	
              ARTICLE
                XI

            
	 	 	 
	
              GENERAL
                PROVISIONS

            
	 
	
              Section
                11.1

            	
              Notices

            	
              62

            
	
              Section
                11.2

            	
              Interpretation

            	
              63

            
	
              Section
                11.3

            	
              Governing
                Law; Consent to Jurisdiction and Waiver of Jury Trial

            	
              68

            
	
              Section
                11.4

            	
              Counterparts;
                Facsimile Signatures

            	
              69

            
	
              Section
                11.5

            	
              Entire
                Agreement; Third Party Beneficiaries

            	
              69

            
	
              Section
                11.6

            	
              Severability

            	
              69

            
	
              Section
                11.7

            	
              Assignment

            	
              70

            
	
              Section
                11.8

            	
              Amendment

            	
              70

            
	
              Section
                11.9

            	
              Extension;
                Waiver

            	
              70

            
	
              Section
                11.10

            	
              Specific
                Performance

            	
              70

            
	
              Section
                11.11

            	
              No
                Strict Construction

            	
              70

            


    

    


    
      
        
        

      

      
        vi

        
          

        

      

      
        
        

      

    


    SCHEDULES
      


    


    
      	
              Schedule
                1.15 

            	 	
              Parent
                Common Stock Issued to Affiliates

            
	
              Schedule
                3.1(b)

            	 	
              Organization
                and Qualification; Jurisdictions

            
	
              Schedule
                3.3(b)

            	 	
              Capitalization
                - Company Obligations

            
	
              Schedule
                3.3(c)

            	 	
              Capitalization:
                Registration Rights; Voting Plans; Proxies; Agreements

            
	
              Schedule
                3.3(d)

            	 	
              Capitalization:
                Sale and Transfer Rights

            
	
              Schedule
                3.5(a)

            	 	
              Required
                Governmental Filings

            
	
              Schedule
                3.6(a)

            	 	
              Compliance
                with Legal Requirements

            
	
              Schedule
                3.6(b)

            	 	
              Permits

            
	
              Schedule
                3.7(d)

            	 	
              Company
                Financial Statements

            
	
              Schedule
                3.8

            	 	
              Undisclosed
                Liabilities of the Company

            
	
              Schedule
                3.9

            	 	
              Certain
                Changes or Events on the Company

            
	
              Schedule
                3.10(a)

            	 	
              Litigation
                - Company Proceedings

            
	
              Schedule
                3.10(b)

            	 	
              Litigation
                - Russell

            
	
              Schedule
                3.11(a)

            	 	
              Employee
                Benefits - Employee Compensation and Benefit Plans

            
	
              Schedule
                3.11(j)

            	 	
              Employee
                Benefit Plans: Severance Pay; Violations

            
	
              Schedule
                3.12(i)

            	 	
              Employees
                - Employee Compensation

            
	
              Schedule
                3.12(ii)

            	 	
              Employees
                - Long Term Disability Leave; Extended Leave of Absence; Workers’
                Compensation

            
	
              Schedule
                3.12(iii)

            	 	
              Company
                Employment Practices - Legal Proceedings and Labor
                Disputes

            
	
              Schedule
                3.13

            	 	
              Restrictions
                on Company Business Activities

            
	
              Schedule
                3.14(a)

            	 	
              Personal
                Property-Liens

            
	
              Schedule
                3.14(b)

            	 	
              Personal
                Property

            
	
              Schedule
                3.15(a)(i)

            	 	
              Real
                Property - Leased / Occupied by Third Party

            
	
              Schedule
                3.15(a)(ii)

            	 	
              Real
                Property - Defaults

            
	
              Schedule
                3.15(b)

            	 	
              Real
                Property - Flood Plains

            
	
              Schedule
                3.15(c)

            	 	
              Real
                Property - Restrictions

            
	
              Schedule
                3.17(a)

            	 	
              Tax
                Matters - Tax Returns

            
	
              Schedule
                3.17(b)

            	 	
              Tax
                Matters - Tax Proceedings

            
	
              Schedule
                3.17(c)

            	 	
              Tax
                Matters - Tax Audits

            
	
              Schedule
                3.17(d)

            	 	
              Tax
                Matters - Tax Payments

            
	
              Schedule
                3.17(e)

            	 	
              Tax
                matters - Tax Agreements

            
	
              Schedule
                3.18(a)

            	 	
              Environmental
                Matters

            
	
              Schedule
                3.19

            	 	
              Brokers’
                and Finders’ Fees - Company

            
	
              Schedule
                3.20(a)

            	 	
              Company
                Intellectual Property and Company Product- Proceedings

            
	
              Schedule
                3.20(b)

            	 	
              Company
                Intellectual Property - Liens and Encumbrances

            
	
              Schedule
                3.21(a)

            	 	
              Material
                Company Contracts

            
	
              Schedule
                3.21(c)

            	 	
              Material
                Company Contracts - Violations; Defaults; Amendments

            
	
              Schedule
                3.21(d)

            	 	
              Material
                Company Contracts - Third Party Waivers or
                Consents

            


    

     

    
      
        
        

      

      
        vii

        
          

        

      

      
        
        

      

    

    
      	
              Schedule
                3.22

            	 	
              Company
                Insurance Policies

            
	
              Schedule
                3.23(a)

            	 	
              Affiliate
                Arrangements

            
	
              Schedule
                3.23(b)

            	 	
              Employee
                Interests in Company Property

            
	
              Schedule
                3.28

            	 	
              Distributors,
                Suppliers and Customers

            
	
              Schedule
                3.29

            	 	
              Product
                Liabilities

            
	
              Schedule
                3.32

            	 	
              Bank
                Accounts

            
	
              Schedule
                3.33

            	 	
              Power
                of Attorney

            
	
              Schedule
                3.34

            	 	
              Total
                Indebtedness

            
	
              Schedule
                4.3(a)

            	 	
              Required
                Filings and Consents

            
	
              Schedule
                4.6

            	 	
              Litigation
                - Parent Proceedings

            
	
              Schedule
                5.1

            	 	
              Conduct
                of Business by the Company

            
	
              Schedule
                6.2

            	 	
              Transferred
                Assets

            
	
              Schedule
                6.9

            	 	
              Certain
                Claims

            
	
              Schedule
                7.3(g)

            	 	
              Resignations

            
	
              Schedule
                7.3(o)

            	 	
              Termination
                of Certain Agreements

            
	
              Schedule
                8.1(a)(ix)

            	 	
              Oral
                Arrangements

            
	
              Schedule
                9.2(a)(i)

            	 	
              Company
                Common Stock 

            
	
              Schedule
                11.2(b)

            	 	
              Non-recurring
                Expenses

            
	
              Schedule
                11.2(c)

            	 	
              Agreed
                Allocation Statement of Merger Consideration 

            
	
              Schedule
                11.2(p)(i)

            	 	
              Knowledge
                - Individuals of the Company

            
	
              Schedule
                11.2(p)(ii)

            	 	
              Knowledge
                - Individuals of the Parent

            


    


    
      
        
        

      

      
        viii

        
          

        

      

      
        
        

      

    

     

    EXHIBITS

    


    
      	
              Exhibit
                A

            	
              FIRPTA
                Certificate

            
	
              Exhibit
                B

            	
              Form
                of Registration Rights Agreement

            
	
              Exhibit
                C

            	
              Non-Competition
                Agreement

            


    

     

    
      
        
        

      

      
        ix

        
          

        

      

      
        
        

      

    

    
      


      EXECUTION
        COPY

      


      AGREEMENT
        AND PLAN OF MERGER

       

      THIS
        AGREEMENT AND PLAN OF MERGER (this “Agreement”)
        is made
        and entered into as of June 19, 2008, by and among Restaurant Acquisition
        Partners, Inc., a Delaware corporation (“Parent”),
        Oregano’s Acquisition, Inc., an Arizona corporation and a wholly-owned
        subsidiary of the Parent (“Merger
        Sub”),
        Oregano’s Holdings LLC, a Delaware limited liability company with the Parent as
        its sole member (“Oregano
        LLC”),
        Oregano’s Pizza Bistro, Inc., an Arizona corporation (the “Company”)
        and the
        sole shareholder of the Company, Mark S. Russell (“Russell”).
        Capitalized terms used in this Agreement are defined or otherwise referenced
        in
        Article X of this Agreement.

       

      RECITALS

       

      WHEREAS,
        the Parent and the Company desire that Parent combine its business with the
        businesses operated by the Company through (i) the merger of Merger Sub with
        and
        into the Company, with the Company as the surviving corporation (the
“First
        Merger”),
        as
        more fully provided in this Agreement and in accordance with the Arizona
        Business Corporation Act (Arizona Revised Statutes Sections 10-120, et al.),
        as
        amended (the “ABCA”);
        and
        (ii) immediately following the First Merger, the merger of the Company with
        and
        into Oregano LLC, with Oregano LLC as the surviving limited liability company
        (the “Second
        Merger”),
        as
        more fully provided in this Agreement and in accordance with the Delaware
        Limited Liability Company Act (the “DLLCA”)
        and
        the ABCA;

       

      WHEREAS,
        the board of directors of each of the Company, the Parent and Merger Sub
        and the
        board of managers of Oregano LLC have determined that the First Merger and
        the
        Second Merger, taken together, upon the terms and subject to the conditions
        set
        forth in this Agreement are advisable, fair to and in the best interests
        of
        their respective stockholders and member, as the case may be;

       

      WHEREAS,
        Russell owns 100% of the issued and outstanding shares of Company Common
        Stock,
        constituting all of the capital stock of the Company;

       

      WHEREAS,
        Russell, possessing all voting rights necessary for the Shareholder Approval
        has
        approved this Agreement and the Transaction (as defined below), subject to
        the
        conditions set forth herein, pursuant to a written consent in lieu of a meeting
        of even date herewith (the “Shareholder
        Consent”);

       

      WHEREAS,
        for federal income tax purposes, it is intended that the First Merger and
        the
        Second Merger shall be treated as a single integrated transaction (collectively,
        the “Transaction”)
        and
        shall qualify as a “reorganization” within the meaning of Section 368(a)(1)(A)
        of the Internal Revenue Code of 1986, as amended (the “Code”),
        and
        the regulations promulgated thereunder, and that this Agreement will be,
        and is,
        adopted as a plan of reorganization; 

       

      


      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      


      WHEREAS,
        concurrently with the execution of this Agreement, and as a condition and
        inducement to the Parent; Oregano LLC; and Merger Sub’s willingness to enter
        into this Agreement, Russell is entering into a non-competition and
        non-solicitation agreement with the Parent substantially in the form set
        forth
        on Exhibit
        C
        to this
        Agreement (each, a “Non-Competition
        Agreement”
and,
        collectively, the “Non-Competition
        Agreements”);
        and

       

      WHEREAS,
        concurrently with the execution and delivery of this Agreement and as a
        condition and further inducement to the Parent’s willingness to enter into this
        Agreement, Russell has delivered to the Parent an executed copy of the Real
        Estate Purchase Agreement.

       

      NOW,
        THEREFORE, in consideration of the premises, representations and warranties
        and
        mutual agreements herein contained, the parties agree as follows:

       

      ARTICLE
        I 

       

      THE
        TRANSACTION

       

      Section
        1.1 The
        First Merger.
        Upon
        the terms and subject to the conditions set forth in this Agreement, and
        in
        accordance with the provisions of the ABCA, Merger Sub shall be merged with
        and
        into the Company at the Effective Time. As a result of the First Merger,
        subject
        to Section 1.17, the separate existence of Merger Sub shall cease, and the
        Company shall continue as the surviving corporation under the laws of the
        State
        of Arizona and shall continue under the name “Oregano Pizza Bistro, Inc.” as a
        wholly owned subsidiary of the Parent (the Company as a surviving corporation
        in
        the First Merger is sometimes referred to in this Agreement as the “First Surviving
        Corporation”). 

       

      Section
        1.2 Effective
        Time; Closing.
        At the
        Closing, the parties shall file with the Corporation Commission of the State
        of
        Arizona a certificate of merger in such form as required and executed in
        accordance with the relevant provisions of the ABCA (the “Certificate
        of Merger”)
        and
        shall make all other filings or recordings required under the ABCA, if any.
        The
        First Merger shall become effective at such time as the Certificate of Merger
        is
        duly filed with the Corporation Commission of the State of Arizona, or at
        such
        other time as is permissible in accordance with the ABCA and as the Parent
        and
        the Company shall agree and as specified in the Certificate of Merger (the
        time
        the First Merger becomes effective being the “Effective
        Time”).

       

      Section
        1.3 Effects
        of the First Merger.
        At the
        Effective Time:

       

      (a) The
        separate existence of Merger Sub shall cease and Merger Sub shall be merged
        with
        and into the Company with the Company continuing as the surviving corporation.
        At the Effective Time, and without any further action on the part of Merger
        Sub
        or the Company, the certificate of incorporation and bylaws of Merger Sub
        as in
        effect at the Effective Time shall be the articles of incorporation and bylaws
        of the First Surviving Corporation following the First Merger, in each case,
        until thereafter changed or amended as provided therein or by Legal Requirements
        and until the Second Merger becomes effective, except that (i) the name of
        the
        corporation set forth therein shall be changed to the name of the Company
        and
        (ii) the identity of the incorporator shall be deleted. The directors of
        Merger
        Sub at the Effective Time shall be the directors of the First Surviving
        Corporation following the First Merger and until the earlier of their
        resignation or removal or until their respective successors are duly elected
        and
        qualified, as may be the case, and until the Second Merger becomes effective.
        The officers of the Company immediately prior to the Effective Time shall
        be the
        officers of the First Surviving Corporation until their respective successors
        are duly elected and qualified and until the Second Merger becomes
        effective.

       

      


      
        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

      

      


      (b) The
        First
        Merger shall have all the effects set forth in the appropriate provisions
        of the
        ABCA and as set forth in this Agreement.

       

      Section
        1.4 Effect
        on Capital Stock.
        Subject
        to the terms and conditions of this Agreement, at the Effective Time, by
        virtue
        of the First Merger and this Agreement and without any action on the part
        of
        Merger Sub, the Company or the holders of any of the capital stock of the
        Company, and subject to Sections 1.4(b), 1.4(c) and 1.4(d), the following
        shall
        occur: 

       

      (a) Company
        Common Stock.
        Each
        share of Company Common Stock outstanding immediately prior to the Effective
        Time (excluding shares to be canceled pursuant to Section 1.4(f)) will as
        of the
        Closing Date be automatically converted into the right to receive a pro rata
        portion of the Total Merger Consideration subject to Section 1.14 and Article
        II
        hereof.

       

      (b) As
        used
        in this Agreement, the term “Preliminary
        Cash Merger Consideration”
shall
        mean an amount determined by subtracting the Estimated Cash Deduction Amount
        from Closing Cash. The term “Closing
        Cash”
shall
        mean the greater of (A) the amount that is the lesser of (i) $8,500,000 and
        (ii)
        the product obtained by multiplying the Gross Preliminary Closing Merger
        Consideration by 0.52 and (B) the Estimated Cash Deduction Amount; 

       

      (c) As
        used
        in this Agreement, the term “Preliminary
        Closing Merger
        Consideration”
shall
        be an amount equal to (A) the sum of (i) 6.5 multiplied by the Estimated
        Closing
        Adjusted EBITDA, plus
        (ii) the
        amount, if any, by which the Estimated Closing Working Capital exceeds the
        Benchmark Working Capital, plus
        (iii)
        the
        Estimated Closing New Restaurant Investment Amount (such sum the “Gross
        Preliminary Closing Merger Consideration”),
        minus
        (B) the
        sum of (x) the Estimated Total Indebtedness and (y) the
        amount, if any, by which the Benchmark Working Capital exceeds the Estimated
        Closing Working Capital
        (such
        sum the “Estimated
        Cash Deduction Amount”). 

       

      


      
        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

      

      


      (d) As
        used
        in this Agreement, the term “Preliminary
        Parent Stock Consideration”
shall
        mean an amount of shares of Parent Common Stock determined by (A) subtracting
        the Preliminary Cash Merger Consideration from the Preliminary Closing Merger
        Consideration and dividing the difference by (B) the average daily closing
        price
        of a share of Parent Common Stock quoted on the Over-the-Counter Bulletin
        Board
        for the five trading days ending on the second Business Day prior to the
        first
        public announcement pertaining to this Agreement; provided,
        however,
        if the
        Estimated Cash Deduction Amount exceeds $8,500,000 (such excess the
“Negative
        Cash Merger Consideration Amount”),
        then
        a portion of the Preliminary Parent Stock Consideration with a value equal
        to
        the Negative Cash Merger Consideration Amount (the “Reallocated
        Stock”)
        shall
        be (x) deducted from the Preliminary Parent Stock Consideration and (y) applied
        to the payment of the Purchase Price (as defined in the Real Estate Purchase
        Agreement), with the balance of such Purchase Price (as defined in the Real
        Estate Purchase Agreement) paid in cash. For the purpose of determining the
        value of Parent Common Stock pursuant to this Section 1.4(d), a share of
        Parent
        Common Stock shall be valued at the average daily closing price of a share
        of
        Parent Common Stock quoted on the Over-the-Counter Bulletin Board for the
        five
        trading days ending on the second Business Day prior to the first public
        announcement pertaining to this Agreement;

       

      The
        Parties acknowledge and agree that the Preliminary Closing Merger Consideration
        shall be payable (a) with respect to the Preliminary Cash Merger Consideration,
        if any, in immediately available funds and (b) with respect to the Preliminary
        Parent Stock Consideration, in shares of Parent Common Stock; provided,
        however,
        that
        the Total Holdback Shares shall be withheld from the Preliminary Parent Stock
        Consideration by the Parent (on behalf of the Shareholder), as described
        in
        Section 1.14. 

       

      Prior
        to
        the Closing, for the purpose of determining the allocation of the Preliminary
        Closing Merger Consideration, the Company shall provide to the Parent all
        necessary documentation to calculate the Agreed Allocation Statement of Merger
        Consideration. The Agreed Allocation of Merger Consideration shall set forth:
        (i) the Shareholder’s name; (ii) the Shareholder’s address; (iii) the
        Preliminary Cash Merger Consideration, if any; (iv) the Negative Cash Merger
        Consideration Amount, if any; (v) the Preliminary Closing Merger Consideration;
        (vi) the Preliminary Parent Stock Consideration; (vii) the Total Holdback
        Shares; and (viii) Russell’s percentage interest in the Company Common
        Stock.

       

      (e) Capital
        Stock of Merger Sub.
        Each
        share of common stock, par value $0.01 per share, of Merger Sub (the
“Merger
        Sub Common Stock”)
        issued
        and outstanding immediately prior to the Effective Time shall be converted
        into
        one (1) validly issued, fully paid and nonassessable share of common stock
        of
        the First Surviving Corporation. Each certificate evidencing ownership of
        shares
        of Merger Sub Common Stock shall evidence ownership of such shares of common
        stock of the First Surviving Corporation.

       

      (f) Cancellation
        of Treasury and Parent-Owned Stock.
        Each
        share of Company Common Stock held by the Company or owned by Merger Sub,
        the
        Parent or any direct or indirect wholly-owned subsidiary of the Company or
        of
        the Parent immediately prior to the Effective Time shall be canceled and
        extinguished without any conversion or payment in respect thereof.

       

      


      
        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

      


      (g) Cancellation
        and Retirement of Company Common Stock.
        As of
        the Effective Time, all shares of Company Common Stock issued and outstanding
        immediately prior to the Effective Time shall no longer be outstanding and
        shall
        automatically be canceled and retired and shall cease to exist, and each
        holder
        of a certificate representing any such shares of Company Common Stock shall,
        to
        the extent such certificate represents such shares, cease to have any rights
        with respect thereto, except the right to receive the Closing Merger
        Consideration, as adjusted, allocable to the shares represented by such
        certificate set forth above to be paid in consideration therefor, without
        interest, upon surrender of such certificate in accordance with Section
        1.5.

       

      Section
        1.5 Surrender
        of Certificates.
        (a)
Payment
        at Closing.
        As of
        the Effective Time, the Parent shall pay the Preliminary Closing Merger
        Consideration to Russell in accordance with Section 2.1(b). 

       

      (b) Exchange
        Procedures.
        Upon
        the
        surrender of a certificate or certificates (each “Certificate”)
        representing Company Common Stock for cancellation to the Parent duly completed
        and validly executed, the holder of such Certificate(s) shall be entitled
        to
        receive in exchange therefor the consideration set forth in Section 1.4(a)
        allocable to the shares formerly represented by such Certificate(s), and
        the
        Certificate(s) so surrendered shall be canceled. Until surrendered as
        contemplated by this Section 1.5, each Certificate for shares of Company
        Common
        Stock shall be deemed at any time after the Effective Time to represent only
        the
        right to receive upon such surrender the Total Merger Consideration allocable
        to
        the shares formerly represented by such Certificate pursuant to Section 1.4.
        No
        interest shall
        be paid
        or shall
        accrue
        on any amount payable as the Total Merger Consideration subject
        to Section 1.14 and Article II hereof. 

       

      If
        any
        portion of the Total Merger Consideration is to be issued in the name of
        a
        person other than the person in whose name the Certificate surrendered in
        exchange therefor is registered, it shall be a condition to the issuance
        of such
        Total Merger Consideration that (i) the Certificate so surrendered shall be
        transferable, and shall be properly assigned, endorsed or accompanied by
        appropriate stock powers, (ii) such transfer shall otherwise be proper,
        (iii) the person requesting such transfer shall pay to the Parent any
        transfer or other Taxes payable by reason of the foregoing or establish to
        the
        satisfaction of the Parent that such Taxes have been paid or are not required
        to
        be paid and (iv) if payable in Parent Common Stock, the person requesting
        such a
        transfer shall deliver an opinion of counsel to the effect that such transfer
        is
        exempt from the requirements of the Securities Act and applicable federal
        securities laws. 

       

      (c) Transfers
        of Ownership.
        As
        of the
        date of this Agreement, the stock transfer books of the Company shall be
        closed
        and there shall thereafter be no further registration of transfers of Company
        Common Stock outstanding immediately prior to the Effective Time on the records
        of Company.

       

      Section
        1.6 No
        Further Ownership Rights in Company Stock.
        The
        Total
        Merger Consideration
        paid
        upon the surrender for exchange of Certificates representing shares of stock
        in
        accordance with the terms of this Article I shall be deemed to have been
        paid in
        full satisfaction of all rights pertaining to the shares of Company Common
        Stock
        represented by such certificates.

       

      


      
        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

      

      


      Section
        1.7 Lost,
        Stolen or Destroyed Certificates.
        In the
        event any Certificate shall have been lost, stolen or destroyed, Russell
        shall
        notify the Parent and, upon the making of an affidavit (including customary
        indemnification) of that fact by the Person claiming such Certificate to
        be
        lost, stolen or destroyed, and the receipt by the Parent of such affidavit
        and
        other documents as the Parent may reasonably request, the Parent shall deliver
        to the holder of such Certificate in exchange for such lost, stolen or destroyed
        Certificate, the applicable Total Merger Consideration, as adjusted, in respect
        of the shares formerly represented by such Certificate in accordance with
        the
        terms and conditions of this Agreement; provided,
        however,
        that,
        as a condition precedent to the issuance of such consideration, the owner
        of
        such lost, stolen or destroyed Certificates shall indemnify the Parent against
        any claim that may be made against the Parent or the First Surviving Corporation
        with respect to the Certificates alleged to have been lost, stolen or
        destroyed.

       

      Section
        1.8 No
        Liability.
        Notwithstanding anything to the contrary contained herein, none of the Parent,
        Merger Sub, Oregano LLC, the First Surviving Corporation or any party hereto
        shall be liable to any Person in respect of any payment of the Total Merger
        Consideration properly delivered to a public official pursuant to any applicable
        abandoned property, escheat or similar law. If any Certificate representing
        shares of Company Common Stock shall not have been surrendered immediately
        prior
        to the date on which any of the Total Merger Consideration would otherwise
        escheat to or become the property of any Government Entity, any such amount
        of
        Total Merger Consideration shall, to the extent permitted by Legal Requirements,
        become the property of the Parent, free and clear of all claims of or interest
        of any Person previously entitled thereto.

       

      Section
        1.9 Required
        Withholding.
        Each of
        the Parent, Merger Sub, and the First Surviving Corporation shall be entitled
        to
        deduct and withhold from any consideration payable or otherwise deliverable
        pursuant to this Agreement to any holder or former holder of Company Common
        Stock such amounts as are required to be deducted or withheld therefrom under
        the Code, or under any provision of state, local or foreign tax law or under
        any
        other applicable Legal Requirement. To the extent such amounts are so deducted
        or withheld, such amounts shall be treated for all purposes under this Agreement
        as having been paid to the person to whom such amounts would otherwise have
        been
        paid.

       

      Section
        1.10 Taking
        of Necessary Action; Further Action.
        If, at
        any time after the Effective Time, the First Surviving Corporation shall
        consider or be advised that any further deeds, assignments or assurances
        in law
        or any other acts are necessary or desirable to (a) vest, perfect or confirm,
        of
        record or otherwise, in the First Surviving Corporation its right, title
        or
        interest in, to or under any of the property, rights, privileges, powers
        and
        franchises of the Company or (b) otherwise carry out the provisions of this
        Agreement, the Company and its officers and directors shall be deemed to
        have
        granted to the First Surviving Corporation an irrevocable power of attorney
        to
        execute and deliver all such deeds, assignments or assurances in law and
        to take
        all acts necessary, proper or desirable to vest, perfect or confirm title
        to and
        possession of such property, rights, privileges, powers and franchises in
        the
        First Surviving Corporation and otherwise to carry out the provisions of
        this
        Agreement, and the officers and directors of the First Surviving Corporation
        are
        authorized in the name of the Company or otherwise to take any and all such
        action.

       

      


      
        
          
            
            

          

          
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      Section
        1.11 [Reserved]

       

      Section
        1.12 [Reserved]

       

      Section
        1.13 No
        Fractional Shares of Parent Common Stock, Rounding of Cash
        Amounts.
        Notwithstanding any other provision of this Agreement, no fractional shares
        of
        Parent Common Stock shall be issuable by the Parent upon the conversion of
        shares of Company Common Stock in the First Merger pursuant to Section 1.4(a)
        hereof. In lieu of such issuance, the total number of shares of Parent Common
        Stock issuable to each holder of Company Common Stock shall be rounded to
        the
        closest whole number of shares of Parent Common Stock. The total amount of
        Preliminary Cash Merger Consideration payable as part of the Total Merger
        Consideration to each holder of Company Common Stock will be rounded to the
        nearest penny.

       

      Section
        1.14 Holdback
        Shares.
         
        To
        secure the indemnification obligations of Russell set forth in Article VIII
        hereof, at the Closing, the Total Holdback Shares shall be withheld by the
        Parent (on behalf of Russell) to be held during the period commencing on
        the
        Closing Date and ending on the Final Holdback Payment Date. Such shares shall
        be
        distributed to Russell in accordance with, and subject to the limitations
        of,
        Section 2.6. 

       

      Section
        1.15 Rule
        145.
        All
        shares of Parent Common Stock issued pursuant to this Agreement to affiliates
        of
        the Company identified on Schedule
        1.15
        attached
        hereto will be subject to certain resale restrictions under Rule 145 promulgated
        under the Securities Act and all certificates representing such shares shall
        bear the appropriate legend. 

       

      Section
        1.16 Shareholder
        Matters.
        (a) By
        his execution of this Agreement, Russell in his capacity as the sole shareholder
        of the Company, hereby approves and adopts this Agreement and authorizes
        the
        Company, its directors and officers to take all actions necessary for the
        consummation of the First Merger and the other transactions contemplated
        hereby
        pursuant to the terms of this Agreement (including the exhibits and Schedules
        to
        this Agreement). Such execution shall be deemed to be action taken by the
        irrevocable written consent of the Shareholder for the purposes of Section
        10-1103 of the ABCA. The Shareholder also confirms that he is not entitled
        to
        any appraisal, dissenters’ or similar rights pursuant to any Legal
        Requirements.

       

      (b)
        Russell represents and warrants as follows: (i) all Parent Common Stock to
        be
        acquired by Russell pursuant to this Agreement will be acquired for investment
        only and not with a view to or intention of or in connection with any resale
        or
        distribution of such Parent Common Stock or any interest therein; (ii) Russell
        understands that he must bear the economic risk of the investment in the
        Parent
        Common Stock, which will be “restricted securities” under applicable federal
        securities laws and that the Securities Act provides in substance that Russell
        may dispose of such shares only pursuant to an effective registration statement
        under the Securities Act or an exemption from registration if available;
        (iii)
        Russell shall furnish any additional information about Russell reasonably
        requested by the Parent to assure the compliance of this transaction with
        applicable federal and state securities laws; (iv) Russell has had both the
        opportunity to ask questions and receive answers from the officers and directors
        of the Parent and all person’s acting on the Parent’s behalf concerning the
        business and operations of the Parent and to obtain any additional information
        to the extent the Parent possesses or may possess such information or can
        acquire it without unreasonable effort or expense necessary to verify the
        accuracy of such information; (v) Russell has had access to the Parent SEC
        Reports filed prior to the date of this Agreement; (vi) Russell is an
“accredited investor” (as defined in rule 501(a) under the Securities Act) and
        has such knowledge, skill and experience in business, financial and investment
        matters so that he is capable of evaluating the merits and risks of an
        investment in the Parent Common Stock pursuant to the transactions contemplated
        by this Agreement or to the extent that Russell has deemed it appropriate
        to do
        so, he has relied upon appropriate professional advice regarding the tax,
        legal
        and financial merits and consequences of an investment in the Parent Common
        Stock pursuant to the transactions contemplated by this Agreement and (vii)
        Russell understands the certificates representing the Parent Common Stock
        to be
        issued pursuant to the transactions contemplated under this Agreement shall
        bear
        legends to the effect that the Parent Common Stock shall not be transferred
        except upon compliance with the registration requirements of the Securities
        Act
        (or an exemption therefrom) and the provisions of this Agreement.

       

      


      
        
          
            
            

          

          
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      Section
        1.17 The
        Second Merger.
        (a)
        Immediately following the First Merger, the Parent shall cause the First
        Surviving Corporation to merge into Oregano LLC and the separate corporate
        existence of the First Surviving Corporation shall cease and Oregano LLC
        shall
        continue as the surviving limited liability company. Oregano LLC, in its
        capacity as the limited liability company surviving the Second Merger, is
        sometimes referred to in this Agreement as the “Surviving
        LLC”.
         There
        shall be no conditions to the completion of the Second Merger other than
        the
        completion of the First Merger. The Parent shall cause the Second Merger
        to be
        consummated by filing with the Delaware Secretary of State and the Corporation
        Commission of the State of Arizona, as the case may be, a certificate of
        merger
        in such form as required by and executed in accordance with the applicable
        provisions of the DLLCA and ABCA (the “Second
        Certificate of Merger”) and
        shall
        make all other filings or recordings required under the DLLCA and ABCA, if
        any.
        The Second Merger shall become effective when the Second Certificate of Merger
        has been filed with the Delaware Secretary of State which shall be filed
        immediately after the Effective Time (the “Second
        Effective Time”).
        From
        and after the Second Effective Time, the Second Merger shall have the effects
        set forth in the applicable provisions of the DLLCA and ABCA. Without limiting
        the generality of the foregoing, at the Second Effective Time, except as
        otherwise provided in this Agreement, all the property, rights, privileges,
        powers and franchises of the First Surviving Corporation and Oregano LLC
        shall
        vest in the Surviving LLC, and all debts, liabilities and duties of the First
        Surviving Corporation and Oregano LLC shall become the debts, liabilities
        and
        duties of the Surviving LLC. At the Second Effective Time, (i) the certificate
        of formation of Oregano LLC in effect immediately prior to the Second Effective
        Time shall be the certificate of formation of the Surviving LLC and (ii)
        the
        limited liability agreement of Oregano LLC in effect immediately prior to
        the
        Second Effective Time shall be the limited liability agreement of the Surviving
        LLC, in each case, until thereafter amended in accordance with the DLLCA
        and
        this Agreement and as provided in such certificate of formation or limited
        liability agreement. From and after the Second Effective Time, the officers
        and
        the directors of the First Surviving Corporation shall be the officers and
        the
        managers of the Surviving LLC (as applicable), in each case, until their
        respective successors are duly elected and qualified in accordance with the
        certificate of formation and limited liability agreement of the Surviving
        LLC.
        If, at any time after the Second Effective Time, the Surviving LLC shall
        consider or be advised that any further deeds, assignments or assurances
        in law
        or any other acts are necessary or desirable to (x) vest, perfect or confirm,
        of
        record or otherwise, in the Surviving LLC its right, title or interest in,
        to or
        under any of the property, rights, privileges, powers and franchises of the
        First Surviving Corporation or the Company or (y) otherwise carry out the
        provisions of this Agreement, the First Surviving Corporation and its officers
        and directors shall be deemed to have granted to the Surviving LLC an
        irrevocable power of attorney to execute and deliver all such deeds, assignments
        or assurances in law and to take all acts necessary, proper or desirable
        to
        vest, perfect or confirm title to and possession of such property, rights,
        privileges, powers and franchises in the Surviving LLC and otherwise to carry
        out the provisions of this Agreement, and the officers and managers of the
        Surviving LLC are authorized in the name of the First Surviving Corporation
        or
        otherwise to take any and all such action.

       

      


      
        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

      

       

      (b)
        At
        the Second Effective Time, by virtue of the Second Merger and without any
        action
        on the part of the holder thereof, each issued and outstanding share of common
        stock, par value $0.001 per share, of the First Surviving Corporation issued
        and
        outstanding immediately prior to the Effective Time shall be converted into
        and
        shall constitute the only membership interests of the Surviving LLC.


      


      ARTICLE
        II 

       

      MERGER
        CONSIDERATION ADJUSTMENTS

       

      Section
        2.1 Preparation
        of the Company’s Statement.
        (a) Not
        more than five (5) Business Days and not less than three (3) Business Days
        prior
        to the Closing, the chief financial officer of the Company shall deliver
        to the
        Parent a good faith estimate of (i) the Closing Working Capital (“Estimated
        Closing Working Capital”);
        (ii)
        the Total Indebtedness (the “Estimated
        Total Indebtedness”),
        including a list of each such obligee of such Total Indebtedness (each a
        “Company
        Debt Obligee”)
        and
        wire instructions for the repayment thereof; (iii) the Closing New Restaurant
        Investment Amount (the “Estimated
        Closing New Restaurant Investment Amount”)
        and
        (iv) the Closing Adjusted EBITDA (the “Estimated
        Closing Adjusted EBITDA”),
        and
        provide Russell and the Parent with a statement setting forth such amounts
        (the
“Company’s
        Statement”).
          

       

      


      
        
          
            
            

          

          
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      (b) Payment
        of the Preliminary Closing Merger Consideration.
        On the
        Closing Date, the Parent shall pay the Preliminary Closing Merger Consideration
        as follows:

       

      (i)
        Parent shall deliver to Russell the Preliminary Closing Merger Consideration
        payable as follows: (A) an amount equal to the Preliminary Cash Merger
        Consideration (which shall be delivered by check or wire transfer); provided,
        however,
        that
        payment of the Preliminary Cash Merger Consideration shall be subject to
        the
        Agreed Allocation Statement of Merger Consideration and (B) a stock certificate
        representing the Preliminary Closing Stock Consideration; and

       

      (ii)
        Parent shall deliver to each of the Company Debt Obligees, the amounts owed
        to
        each of the Company Debt Obligees for satisfaction of all outstanding
        obligations under the Estimated Total Indebtedness. 

       

      (c) Acknowledgements
        with respect to the Payment of the Preliminary Closing Merger
        Consideration.
        

       

      (i)
        The
        Company and Russell hereby acknowledge and agree that payment by the Parent
        to
        Russell pursuant to Section 2.1(b)(i) satisfies the Parent’s obligations to make
        the applicable payments described in this Section 2.1(b)(i) and that following
        such payment the Parent and the Company shall have no further liability to
        Russell to make any additional payments under this Section
        2.1(b)(i).

       

      Section
        2.2 Preliminary
        Closing Statement.
        (a)
        Within sixty (60) days after the Closing Date, the Parent shall prepare and
        deliver to Russell a statement of each of the Closing Working Capital, the
        Total
        Indebtedness, the Closing New Restaurant Investment Amount and the Closing
        Adjusted EBITDA (the “Preliminary
        Closing Statement”).

       

      (b) The
        Preliminary Closing Statement shall be prepared in accordance with the
        Accounting Principles.

       

      Section
        2.3 Review
        of Statement.
        Russell
        and his independent certified public accountants may review the Preliminary
        Closing Statement.
        The
        Parent shall make available to Russell and his representatives, as reasonably
        requested by Russell, all books, records and other documents within its
        possession relating to the Preliminary Closing Statement reasonably deemed
        necessary by Russell in reviewing the Preliminary Closing Statement.
        The
        Preliminary Closing Statement
        and the
        calculations of (i) the Total Indebtedness; (ii) the Closing New Restaurant
        Investment Amount; (iii) the Closing Adjusted EBITDA; and (iv) the Closing
        Working Capital contained therein,
        shall be
        binding and conclusive upon, and deemed accepted by, Russell unless Russell
        shall have notified the Parent
        in
        writing within thirty (30) days after receipt of the Preliminary Closing
        Statement of any objections thereto (a “Dispute
        Notice”).
        A
        Dispute Notice shall specify in reasonable detail the items of the Preliminary
        Closing Statement which are being disputed, and a summary of the reasons
        for
        such dispute.

       

      


      
        
          
            
            

          

          
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      Section
        2.4 Disputes;
        Final Closing Statement.
        (a) At
        the request of the Parent or Russell,
        any
        dispute between the parties relating to the Preliminary Closing Statement
        which
        cannot be resolved by them in good faith within thirty (30) days after receipt
        of the Dispute Notice shall be referred to the Disputes Auditor for decision.
        The parties agree that they shall require the Disputes Auditor to render
        its
        decision within thirty (30) days after referral of the dispute to the Disputes
        Auditor for decision pursuant hereto. The Disputes Auditor’s decision shall be
        set forth in a written statement delivered to the Parent and
        Russell,
        and
        shall be final, conclusive and binding upon all parties, and shall constitute
        an
        arbitral award upon which a judgment may be entered by any court of competent
        jurisdiction. 

       

      (b) Before
        referring a matter to the Disputes Auditor, the parties shall agree
        on
        procedures to be followed by the Disputes Auditor (including procedures for
        presentation of evidence). If the parties are unable to agree upon procedures
        before the end of thirty (30) days after receipt of the Dispute Notice, the
        Disputes Auditor shall establish procedures giving due regard to the intention
        of the parties to resolve disputes as quickly, efficiently and inexpensively
        as
        possible; the Disputes Auditor’s procedures may be, but need not be, those
        proposed by either the Parent or Russell;
        provided,
        however,
        that
        the Disputes Auditor shall act as an expert, and not as an arbitrator, to
        determine, based solely on presentations and materials submitted by the Parent
        and Russell,
        and not
        by independent review, only those issues in dispute between the parties
        regarding the Preliminary Closing Statement and the Disputes Auditor shall
        in
        all cases use the Accounting Principles in resolving any dispute. The parties
        shall, as promptly as practicable, submit evidence in accordance with the
        procedures agreed upon or established by the Disputes Auditor, and the Disputes
        Auditor shall decide the dispute in accordance therewith as promptly as
        practicable. The fee of the Disputes Auditor for, and relating to, the making
        of
        any such decision shall, in any event, be borne equally by the Parent and
        Russell.

       

      (c) The
        Preliminary Closing Statement shall become final and binding on the parties
        upon
        the earliest of (i) if no Dispute Notice has been given, the expiration of
        the
        period within which Russell
        may
        notify the Parent of any objections to the Preliminary Closing Statement
        pursuant to Section 2.3; (ii) agreement by Russell
        and the
        Parent that such Preliminary Closing Statement, together with any modifications
        thereto agreed by Russell
        and the
        Parent, shall be final and binding and (iii) the date on which the Disputes
        Auditor shall issue its decision with respect to any dispute relating to
        the
        Preliminary Closing Statement. The Preliminary Closing Statement when final
        and
        binding on both parties, is herein referred to as the “Final
        Closing Statement”.

       

      Section
        2.5 Closing
        Statement Adjustments.
        (a) The
        Preliminary Closing Merger Consideration shall be (i) increased (any such
        increase, the “Shareholder
        Adjustment Amount”)
        by (w)
        the amount, if any, by which the Working Capital of the Company as reflected
        on
        the Final Closing Statement (the “Final
        Working Capital”),
        exceeds the Estimated Closing Working Capital, (x) the amount, if any, by
        which
        the Estimated Total Indebtedness exceeds the Total Indebtedness as reflected
        on
        the Final Closing Statement (the “Final
        Total Indebtedness”)
        and
        (y) the amount, if any by which the Closing New Restaurant Investment Amount
        as
        reflected on the Final Closing Statement (the “Final
        New Restaurant Investment Amount”),
        exceeds the Estimated New Restaurant Investment Amount and (z) the amount,
        if
        any, by which 6.5 times the Closing Adjusted EBITDA as reflected on the Final
        Closing Statement, exceeds 6.5 times the Estimated Closing Adjusted EBITDA,
        and
        (ii) decreased (any such decrease, the “Parent
        Adjustment Amount”)
        by (w)
        the amount, if any, by which the Final Total Indebtedness exceeds the Estimated
        Total Indebtedness, (x) the amount, if any, by which the Estimated Closing
        Working Capital exceeds the Final Working Capital, (y) the amount, if any,
        by
        which the Estimated New Restaurant Investment Amount exceeds the Final New
        Restaurant Investment Amount and (z) the amount, if any, by which 6.5 times
        the
        Estimated Closing Adjusted EBITDA, exceeds 6.5 times the Closing Adjusted
        EBITDA
        as reflected on the Final Closing Statement. The
        Preliminary Closing Merger Consideration as it may be adjusted post-Closing
        pursuant to this Section 2.5 is referred to as “Closing
        Merger Consideration”.

       

      


      
        
          
            
            

          

          
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      (b) Subject
        to Article VIII, if the Shareholder Adjustment Amount exceeds the Parent
        Adjustment Amount, the Parent shall deliver a portion of the Total Holdback
        Shares, if any, in an amount equal to such excess, within five (5) Business
        Days
        after the Preliminary Closing Statement has become final and binding on Russell
        and the Parent pursuant to Section 2.4 (the “Initial
        Holdback Payment Date”),
        to
        Russell (less the First Holdback Reserve). If
        the
        Parent Adjustment Amount exceeds the Shareholder Adjustment Amount, Russell
        shall immediately pay an amount equal to such excess from either the Preliminary
        Closing Stock Consideration or the Preliminary Cash Merger Consideration
        (at the
        option of Russell). Any adjustment hereunder shall be an adjustment to the
        Total
        Merger Consideration for tax purposes. For the avoidance of doubt, (i) none
        of
        the Total Holdback Shares withheld by the Parent pursuant to this Section
        2.5
        shall continue to constitute any portion of the Total Holdback Shares in
        accordance with this Agreement; (ii) Russell will no longer be entitled to
        receive as a portion of the Total Merger Consideration that portion of the
        Total
        Holdback Shares used to pay any amount owed to the Parent pursuant to this
        Section 2.5 or used to satisfy any Losses of the Parent Indemnified Persons
        and
        (iii) in no event shall the Parent’s recourse pursuant to this Section 2.5 be
        limited to the Total Holdback Shares. 

       

      For
        the
        purposes of determining the aggregate number of the Total Holdback Shares
        that
        may be delivered or withheld by the Parent pursuant to Section 2.5 and Section
        2.6, the Total Holdback Shares shall be valued at the average daily closing
        price of a share of Parent Common Stock quoted on the Over-the-Counter Bulletin
        Board for the five trading days ending on the second Business Day prior to
        the
        first public announcement pertaining to this Agreement. 

       

      Section
        2.6 Payment
        of Total Holdback Shares.
        Subject
        to Article VIII, within five (5) Business Days following the later of (i)
        final
        determination of all claims to which the Second Holdback Reserve relates
        and
        (ii) the Final Holdback Payment Date, the Parent shall deliver or caused
        to be
        delivered
        to
        Russell the Remaining Holdback Shares.

       

      Section
        2.7 Restaurant
        Earn-Out Amount.
        (a) As
        additional consideration for the Company Common Stock and as part of the
        Total
        Merger Consideration, Russell may be entitled to the Restaurant Earn-Out
        Amount,
        if any, as described in this Section 2.7, from the Parent after the Closing
        Date, subject, however, to all terms and conditions of this Section 2.7.
        Notwithstanding anything contained in this Section 2.7 or elsewhere in this
        Agreement to the contrary, in the event that Russell is no longer an employee
        of
        the Surviving LLC upon completion of the Restaurant Milestone, then no
        Restaurant Earn-Out Amount shall be payable.

       

      


      
        
          
            
            

          

          
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      (b) After
        the
        Closing Date, the Parent shall use commercially reasonable efforts to complete
        the construction of the Earn-Out Restaurants in accordance with the Company’s
        project development plan and budget for each Earn-Out Restaurant as provided
        by
        the Company to the Parent on May 27, 2008.

       

      (c) If
        the
        Company achieves the Restaurant Milestone during the Earn-Out Period
        the Closing
        Merger Consideration shall
        be
        increased by the amount of the Restaurant Earn-Out Amount, and the Parent
        shall
        promptly distribute to Russell the Restaurant Earn-Out Amount (such distribution
        payable in cash or Parent Common Stock based upon Russell’s written election) to
        a financial institution designated by Russell as soon as practicable; provided
        however, in no event shall such distribution be made later than sixty (60)
        days
        after the end of the applicable Earn-Out Period. The Restaurant Earn-Out
        Amount
        shall be treated by all parties as an adjustment to the Total Merger
        Consideration. 

       

      For
        the
        purpose of determining the aggregate number of shares of Parent Common Stock
        that may be delivered pursuant to this Section 2.7, if any, a share of Parent
        Common Stock shall be valued at the average daily closing price of a share
        of
        Parent Common Stock quoted on a national securities exchange of the United
        States for the five trading days ending on the second Business Day prior
        to the
        end of the applicable Earn-Out Period.

       

      ARTICLE
        III 

       

      REPRESENTATIONS
        AND WARRANTIES OF RUSSELL AND THE COMPANY

       

      The
        Company and Russell represent and warrant as follows to the Parent, Merger
        Sub
        and Oregano LLC, and acknowledge and confirm that the Parent, Merger Sub
        and
        Oregano LLC are relying upon the following representations and warranties
        in
        entering into this Agreement:

       

      Section
        3.1 Organization
        and Qualification.
        (a) The
        Company is a corporation duly incorporated, validly existing and in good
        standing under the laws of the State of Arizona and has all requisite corporate
        or similar power and authority to own, lease and operate its assets and
        properties and to carry on its business as it is now being or currently planned
        by the Company to be conducted. Complete and correct copies of the articles
        of
        incorporation and by-laws (collectively referred to herein as “Charter
        Documents”)
        of the
        Company, as amended and currently in effect, have been heretofore delivered
        to
        the Parent or the Parent’s counsel. The Company is not in violation of any of
        the provisions of the Company’s Charter Documents.

       

      


      
        
          
            
            

          

          
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      (b) The
        Company is duly qualified or licensed to do business as a foreign corporation
        and is in good standing in each jurisdiction where the character of the
        properties owned, leased or operated by it or the nature of its activities
        makes
        such qualification or licensing necessary, except for such failures to be
        so
        duly qualified or licensed and in good standing that would not, individually
        or
        in the aggregate, reasonably be expected to have a Material Adverse Effect
        on
        the Company. Each jurisdiction in which the Company is so qualified or licensed
        is listed on Schedule
        3.1(b)
        hereto.

       

      (c) The
        minute books of the Company contain true, complete and accurate records of
        all
        meetings and consents in lieu of meetings of its board of directors (and
        any
        committees thereof), similar governing bodies and shareholders (“Corporate
        Records”)
        since
        January 1, 2003. Copies of such Corporate Records of the Company have been
        heretofore made available to the Parent or the Parent’s counsel.

       

      (d) The
        stock
        transfer and ownership records of the Company contain true, complete and
        accurate records of the securities record ownership as of the date of such
        records and the transfers involving the capital stock and other securities
        of
        the Company since January 1, 2003. Copies of such records of the Company
        have
        been heretofore made available to the Parent or the Parent’s
        counsel.

       

      Section
        3.2 No
        Subsidiaries.
        The
        Company does not own, directly or indirectly, any ownership, equity, profits
        or
        voting interest in any Person or have any agreement or commitment to purchase
        any such interest, and has not agreed and is not obligated to make nor is
        bound
        by any written, oral or other agreement, contract, subcontract, lease, binding
        understanding, instrument, note, option, warranty, purchase order, license,
        sublicense, insurance policy, benefit plan, commitment or undertaking of
        any
        nature, as of the date hereof or as may hereafter be in effect under which
        it
        may become obligated to make, any future investment in or capital contribution
        to any other entity.

       

      Section
        3.3 Capitalization.
        (a) The
        authorized capital stock of the Company consists of 1,000,000 shares of Company
        Common Stock, of which 100,000 are issued and outstanding. No shares of capital
        stock are held in the Company’s treasury. All issued and outstanding shares of
        Company Common Stock are duly authorized, validly issued, fully paid and
        non-assessable and are not subject to preemptive rights created by statute,
        the
        Charter Documents of Company or any agreement or document to which the Company
        is a party or by which it is bound, and were issued in compliance with all
        applicable federal and state securities laws. Russell owns all issued and
        outstanding shares of capital stock of the Company free and clear of all
        Liens
        except for restrictions on transfer under federal and state securities laws.
        The
        Company does not have outstanding any bonds, debentures, notes or other
        obligations (including the obligation to pay any dividend with respect to
        any
        shares of Company Common Stock or to make any other distribution in respect
        thereof) the holders of which have the right to vote (or are convertible
        into or
        exercisable for securities having the right to vote) with the Shareholder
        of the
        Company.

       

      (b) Except
        as
        contemplated by this Agreement and except as set forth in Schedule
        3.3(b)
        hereto,
        there are no subscriptions, options, warrants, conversion rights, stock
        appreciation rights, equity securities, partnership interests or similar
        ownership interests, calls, rights (including preemptive rights), commitments
        or
        agreements of any character to which the Company or Russell is a party or
        by
        which it is bound obligating the Company or Russell to issue, deliver or
        sell,
        or cause to be issued, delivered or sold, or repurchase, redeem or otherwise
        acquire, or cause the repurchase, redemption or acquisition of, any shares
        of
        capital stock, partnership interests, membership interests or similar ownership
        interests of the Company or Russell or obligating the Company or Russell
        to
        grant, extend, accelerate the vesting of or enter into any such subscription,
        option, warrant, equity security, call, right, commitment or
        agreement.

       

      


      
        
          
            
            

          

          
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      (c) Except
        as
        set forth in Schedule
        3.3(c) hereto,
        (i) there are no registration rights, and there is no voting trust, proxy,
        rights plan, anti-takeover plan or other agreement or understanding to which
        the
        Company is a party or by which the Company is bound with respect to any equity
        security of any class of the Company and (ii) there are no outstanding or
        authorized stock appreciation, phantom stock or similar rights with respect
        to
        the Company.

       

      (d) Except
        as
        set forth in Schedule
        3.3(d)
        hereto,
        there is no agreement, written or oral, between the Company or Russell and
        any
        holder of their securities, or, to the Company’s knowledge, among any holders of
        its securities, relating to the sale or transfer (including agreements relating
        to rights of first refusal, co-sale rights or “drag-along” rights), registration
        under the Securities Act or voting, of the capital stock of the Company.
        

       

      Section
        3.4 Authority
        Relative to this Agreement.
        (a)Other than (i) the filing the Certificate of Merger and such other documents
        as required by the ABCA and (ii) the filing of the Second Certificate of
        Merger
        and such other documents as required by the DLLCA and ABCA, the Company has
        all
        necessary corporate power and authority to execute and deliver this Agreement
        and to perform its obligations hereunder and to consummate the Transaction,
        including obtaining the approval and adoption of this Agreement prior to
        the
        Closing pursuant to the Shareholders Consent as required under the ABCA and
        its
        Charter Documents. Except as set forth in the prior sentence, no other corporate
        proceedings on the part of the Company or the Shareholder are necessary to
        authorize the execution, delivery and performance of this Agreement by the
        Company or to consummate the Transaction. 
        This
        Agreement has been duly and validly executed and delivered by the Company
        and,
        assuming the due authorization, execution and delivery thereof by the other
        parties hereto, constitutes the legal and binding obligation of the Company,
        enforceable against the Company in accordance with its terms, except as may
        be
        limited by bankruptcy, insolvency, reorganization or other similar laws
        affecting the enforcement of creditors’ rights generally and by general
        principles of equity.

       

      (b)
        Russell has all requisite power and authority to enter into this Agreement,
        to
        perform the obligations hereunder and to consummate the transactions
        contemplated hereby. This Agreement has been duly and validly executed and
        delivered by Russell and, assuming the due authorization, execution and delivery
        thereof by the other parties hereto, constitutes the legal and binding
        obligation of Russell, enforceable against Russell in accordance with its
        terms,
        except as may be limited by bankruptcy, insolvency, reorganization or other
        similar laws affecting the enforcement of creditors’ rights generally and by
        general principles of equity.

       

      


      
        
          
            
            

          

          
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      Section
        3.5 No
        Conflict; Required Filings and Consents.
        (a)
        Except as set forth in Schedule
        3.5(a)
        hereto,
        no notices, reports or other filings are required to be made with, nor are
        any
        consents, registrations, approvals, permits or authorizations required to
        be
        obtained by Russell or the Company from any supranational, national, state,
        municipal, local or foreign government, any instrumentality, subdivision,
        court,
        administrative agency or commission or other governmental authority or
        instrumentality, or any quasi-governmental or private body exercising any
        Tax,
        regulatory or governmental or quasi-governmental authority (a “Governmental
        Entity”),
        as a
        result of, in connection with, or as a condition to the execution and delivery
        of this Agreement by Russell or the Company and the consummation of the
        Transaction.

       

      (b) The
        execution, delivery and performance of this Agreement does not, and the
        consummation of the Transaction will not, constitute or result in (A) a breach
        or violation of, or a default (with or without notice, lapse of time or both)
        under, the Company’s Charter Documents, (B) (with or without notice, lapse of
        time or both) a breach or violation of, or a default under, the acceleration
        of
        any obligations under, or the creation of a Lien on any assets of the Company
        pursuant to any Company Contract that is binding upon the Company or any
        Legal
        Requirement or governmental or non-governmental permit or license to which
        the
        Company is subject or (C) any change in the rights or obligations of any
        party
        under any of the Material Company Contracts.

       

      Section
        3.6 Compliance.
        (a)
        Except as set forth in Schedule
        3.6(a)
        hereto,
        the Company’s business has not been, and is not being, conducted in violation,
        in any material respect, of any Legal Requirements. No action, demand,
        requirement, investigation or review by any Governmental Entity with respect
        to
        the Company or affecting any of its properties or assets is pending or, to
        the
        Company’s knowledge, threatened, nor has any Governmental Entity indicated to
        the Company or Russell an intention to conduct the same. To the Company’s
        knowledge, no change is required in its processes, properties or procedures
        in
        connection with any such Legal Requirements, and it has not received any
        notice
        or communication of any noncompliance with any such Legal Requirements that
        has
        not been cured as of the date hereof.

       

      (b) The
        Company has in effect all approvals, authorizations, certificates, filings,
        franchises, licenses, notices and permits of or with all Governmental Entities
        (collectively, “Permits”)
        necessary, in all material respects, for it to own, lease or operate its
        properties and other assets and to carry on its business and operations as
        presently conducted. All such Permits are set forth in Schedule
        3.6(b)
        hereto.
        There has occurred no default under, or violation of, any such Permit, which
        has
        not been cured, and each such Permit is in full force and effect. The execution,
        delivery and performance of this Agreement, and the consummation of the
        transactions contemplated by this Agreement, will not result in a violation
        of
        or default under and will not cause the revocation or cancellation of any
        such
        Permit. Neither the Company nor Russell has received any communication or
        otherwise has knowledge of any facts which have, or reasonably should have,
        led
        it to believe that any of the Permits are not currently in good standing.
        The
        Company has kept all required records and has filed with Governmental Entities
        all required notices, supplemental applications and annual or other reports
        required for the operation of the Company’s business. 

       

      


      
        
          
            
            

          

          
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      (c) Russell
        is not in violation of any Legal Requirement with respect to his ownership
        of
        the capital stock of the Company or his ability to consummate the transactions
        contemplated by this Agreement.

       

      Section
        3.7 Financial
        Statements.
        (a).
        The Company has provided to the Parent a correct and complete copy of the
        unaudited consolidated financial statements (including, in each case, any
        related notes thereto) of the Company for: (i) the fiscal years ended December
        31, 2006 and 2007 and (ii) the three month period ending March 31, 2008 (the
        “Unaudited
        Financial Statements”).
        The
        Unaudited Financial Statements comply as to form in all material respects,
        and
        were prepared in accordance with, generally accepted accounting principles
        of
        the United States (“U.S.
        GAAP”)
        applied
        on a consistent basis throughout the periods involved (except as may be
        indicated in the notes thereto), and each fairly presents in all material
        respects the financial position of the Company at the respective dates thereof
        and the results of its operations and cash flows for the period indicated
        in
        accordance with U.S. GAAP, except that such statements do not contain notes
        and
        are subject to normal year-end adjustments.

       

      (b) [Reserved]

       

      (c) Since
        January 1, 2008, the books of account, minute books, stock certificate books
        and
        stock transfer ledgers and other similar books and records of the Company
        have
        been maintained in accordance with good business practice, are complete and
        correct in all material respects and there have been no material transactions
        that are required to be set forth therein and which are not so set
        forth.

       

      (d) Except
        as
        otherwise noted in the Unaudited Financial Statements, or as set forth in
        Schedule
        3.7(d)
        hereto,
        the accounts and notes receivable of the Company reflected on the balance
        sheets
        included in the Unaudited Financial Statements (i) arose from bona fide
        transactions in the ordinary course of business and are payable on ordinary
        trade terms; (ii) are legal, valid and binding obligations of the respective
        debtors enforceable in accordance with their terms, except as such may be
        limited by bankruptcy, insolvency, reorganization, or other similar laws
        affecting creditors’ rights generally, and by general equitable principles;
        (iii) are not subject to any valid set-off or counterclaim except to the
        extent
        set forth in such balance sheet contained therein; and (iv) except as set
        forth
        in Schedule
        3.7(d) hereto,
        are not the subject of any actions or proceedings brought by or on behalf
        of the
        Company.

       

      (e) The
        Company has established internal controls for a privately held company for
        purposes of preparing the Company’s periodic financial statements.

       

      Section
        3.8 No
        Undisclosed Liabilities.
        Except
        as set forth in Schedule
        3.8
        hereto,
        the Company has no liability or obligation of any nature (whether known or
        unknown, whether absolute or contingent, whether liquidated or unliquidated
        and
        whether due or to become due or otherwise), except for (a) liabilities and
        obligations reflected or reserved against on the interim balance sheet included
        in the Unaudited Financial Statements hereto, (b) liabilities and obligations
        which have arisen since December 31, 2007 in the ordinary course of business,
        and (c) contractual liabilities or obligations incurred in the ordinary course
        of business which are not required by U.S. GAAP (applied in accordance with
        the
        Accounting Principles) to be reflected on a balance sheet and which are not
        in
        the aggregate material.

       

      


      
        
          
            
            

          

          
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      Section
        3.9 Absence
        of Certain Changes or Events.
        Except
        as set forth in Schedule
        3.9
        hereto,
        since December 31, 2007 the Company has conducted its business only in, and
        has
        not engaged in any transaction other than according to, the ordinary course
        of
        business, and there has not occurred: (i) any Material Adverse Effect on
        the
        Company; (ii) any declaration, setting aside or payment of any dividend on,
        or
        other distribution (whether in cash, stock or property) in respect of, any
        of
        the Company’s capital stock, or any purchase, redemption or other acquisition by
        the Company of any of the Company’s capital stock or any other securities of the
        Company or any options, warrants, calls or rights to acquire any such shares
        or
        other securities; (iii) any split, combination or reclassification of any
        of the
        Company’s capital stock; (iv) any granting by the Company of any increase in
        compensation or fringe benefits, except for normal increases of cash
        compensation in the ordinary course of business consistent with past practice,
        or any payment by the Company of any bonus, except for bonuses made in the
        ordinary course of business consistent with past practice, or any granting
        by
        the Company of any increase in severance or termination pay or any entry
        by
        Company into any currently effective employment, severance, termination or
        indemnification agreement or any agreement the benefits of which are contingent
        or the terms of which are materially altered upon the occurrence of a
        transaction involving the Company of the nature contemplated hereby; (v)
        entry
        by the Company into any licensing or other agreement with regard to the
        acquisition, assignment, transfer, termination or disposition of any
        Intellectual Property other than licenses in the ordinary course of business
        consistent with past practice or any amendment or consent with respect to
        any
        licensing agreement filed or required to be filed by the Company with respect
        to
        any Governmental Entity; (vi) any material change by the Company in its
        accounting methods, principles or practices; (vii) any change in the auditors
        of
        the Company; (viii) any issuance of capital stock of the Company; (ix) any
        revaluation by the Company of any of its assets, including, without limitation,
        writing down the value of capitalized inventory or writing off notes or accounts
        receivable or any sale of assets of the Company other than in the ordinary
        course of business; (x) any change in any material Tax election or Tax
        accounting method, or any settlement or compromise of any Tax liability;
        (xi)
        any damage, destruction or other casualty loss with respect to any material
        asset or property owned, leased or otherwise used by the Company that is
        material to the Company, whether or not covered by insurance; or (xii) any
        agreement, whether written or oral, to take any of the actions referred to
        in
        clauses (ii) through (x) above.

       

      Section
        3.10 Litigation.
        (a)
        Except as set forth in Schedule
        3.10(a)
        hereto,
        there is no civil, criminal or administrative suit, action, proceeding,
        arbitration, investigation, review or inquiry pending or, to Russell’s or the
        Company’s knowledge, threatened against or affecting the Company or any of its
        properties or rights, nor is there any judgment, decree, injunction, rule
        or
        order of any Governmental Entity or arbitrator outstanding against or affecting
        the Company or any of its properties or rights (the foregoing collectively
        referred to as “Proceedings”).
        None
        of the Proceedings is reasonably likely, either individually or in the
        aggregate, to have a Material Adverse Effect or to prevent, impair or materially
        delay the ability of the Company to consummate the transactions contemplated
        by
        this Agreement. No event has occurred or circumstance exists which could
        reasonably be expected to give rise to or serve as a valid basis for the
        commencement of any Proceeding by or against the Company. Except as set forth
        in
Schedule
        3.10(a)
        hereto,
        since January 1, 2006, the Company has not been subject to any Proceeding
        nor
        has the Company settled any claim prior to being sued or
        prosecuted.

       

      


      
        
          
            
            

          

          
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      (b)
        Except as set forth in Schedule
        3.10(b)
        hereto,
        there is no civil, criminal or administrative suit, action, proceeding,
        arbitration, investigation, review or inquiry pending or, to Russell’s
        knowledge, threatened against or affecting Russell or any of his properties
        or
        rights, nor is there any judgment, decree, injunction, rule or order of any
        Governmental Entity or arbitrator outstanding against or affecting Russell
        or
        any of his properties or rights which would have a Material Adverse Effect
        or
        prevent, impair or materially delay the ability of Russell to consummate
        the
        transactions contemplated by this Agreement. 

       

      Section
        3.11 Employee
        Benefit Plans and Compensation. 

       

      (a) Schedule
        3.11(a)
        lists
        all “employee benefit plans,” as defined in Section 3(3) of the Employee
        Retirement Income Security Act of 1974, as amended (“ERISA”),
        and
        any other employee benefit, severance, change in control, death benefit,
        compensation, retirement, deferred compensation, bonus, stock purchase,
        hospitalization, medical insurance and life insurance contracts, arrangements
        and programs covering employees of the Company and maintained by the Company
        or
        any member of a controlled group of organizations (within the meaning of
        Section
        414(b), (c), (m) or (o) of the Code) of which the Company is a member (the
        Company or any other such member, a “Controlled
        Group Member”)
        or to
        which the Company or any other Controlled Group Member contributes or is
        required to contribute or under which the Company or any other Controlled
        Group
        Member pays or is required to pay premiums or benefits (collectively, the
        “Employee
        Benefit Plans”).

       

      (b) Neither
        the Company nor any Controlled Group Member has, or has ever had, any obligation
        to make any contribution to any “multiemployer plans” as defined in Section
        4001(a)(3) of ERISA (“Multiemployer
        Plans”).
        Neither the Company nor any Controlled Group Member has at any time ever
        maintained, established, sponsored, participated in or contributed to any
        multiple employer plans. 

       

      (c) Each
        Employee Benefit Plan intended to qualify under Section 401 of the Code has
        received a favorable determination letter (or in the case of a master or
        prototype plan, a favorable opinion letter) from the Internal Revenue Service
        (“IRS”)
        to
        reflect that the Employee Benefit Plan satisfies the requirements of Section
        401(a) of the Code and that its related trust is exempt from federal income
        taxation under Section 501 of the Code, and nothing has occurred with respect
        to
        the operation of the Employee Benefit Plan that could reasonably be expected
        to
        cause the loss of such qualification or exemption.

       

      


      
        
          
            
            

          

          
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      (d) All
        contributions required by law to have been made under any of the Employee
        Benefit Plans to any funds or trusts established thereunder or in connection
        therewith and all premiums required to be paid in connection with the Employee
        Benefit Plans have been made by the due date thereof (including any valid
        extension).

       

      (e) Neither
        the Company nor any Controlled Group Member sponsors or maintains, or has
        ever
        sponsored or maintained, an “employee pension benefit plan” (within the meaning
        of Section 3(2) of ERISA) that is subject to Title IV of ERISA, the minimum
        funding requirements of Section 412 of the Code or Part 3 of Title I of ERISA,
        or any voluntary employee benefits association described in Section 501(c)(9)
        of
        the Code. 

       

      (f) True,
        correct and complete copies of the following documents, with respect to each
        of
        the Employee Benefit Plans, have been provided to the Parent by the Company,
        where available and to the extent applicable: (i) any plan documents and
        related trust documents, and any amendments thereto; (ii) the three most
        recently filed IRS Forms 5500 with all attachments thereto; (iii) the most
        recent IRS determination letter or opinion letter; (iv) the most recent
        summary plan descriptions or in the case of any plan not subject to the
        disclosure requirements of ERISA, other written description of the plan’s
        material terms; and (v) any material correspondence to or from the Department
        of
        Labor, the IRS, or any other Governmental Entity.

       

      (g) There
        are
        no pending actions (including, without limitation, governmental audits or
        investigations), claims or lawsuits that have been asserted or instituted
        or, to
        the knowledge of the Company, threatened with respect to any of the Employee
        Benefit Plans, the assets of any of the trusts under such plans or the plan
        sponsor or the plan administrator, or against any fiduciary of any of the
        Employee Benefit Plans with respect to the terms or operation of such plans
        (other than routine benefit claims).

       

      (h) The
        Employee Benefit Plans have been maintained in all material respects in
        accordance with their terms and with the provisions of applicable Legal
        Requirements. Neither the Company nor any Controlled Group Member has engaged
        in
        a transaction on or before the date hereof with respect to any Employee Benefit
        Plan that would subject it to material fiduciary liability or a tax or penalty
        imposed pursuant to either Section 4975 of the Code or Section 502 of
        ERISA.

       

      (i) None
        of
        the Employee Benefit Plans is a “welfare benefit plan” within the meaning of
        Section 3(1) of ERISA that provides for continuing benefits or coverage for
        any
        participant or any beneficiary of any participant, except (i) as may be
        required under the Consolidated Omnibus Budget Reconciliation Act of 1985,
        as
        amended, at the expense of the participant or the participant’s beneficiary or
        (ii) coverage through the last day of the month following the date of
        termination of employment in accordance with an Employee Benefit Plan’s
        provisions.

       

      


      
        
          
            
            

          

          
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      (j) Except
        as
        disclosed on Schedule
        3.11(j)
        hereto,
        neither the execution of this Agreement nor the consummation of the transactions
        contemplated hereby will (w) entitle any employees of the Company to severance
        pay, (x) accelerate the time of payment or vesting or trigger any payment
        of
        compensation or benefits or forgiveness of indebtedness under, increase the
        amount payable or trigger any other obligation pursuant to, any of the Employee
        Benefit Plans, (y) obligate the Parent to continue any of the Employee Benefit
        Plans or (z) result in any breach or violation of, or a default under, any
        of
        the Employee Benefit Plans.

       

      (k) The
        consummation of the transactions contemplated by this Agreement will not
        (either
        along with or upon the occurrence of any additional or subsequent events)
        result
        in a nondeductible expense to the Company pursuant to Section 280G of the
        Code
        or an excise tax to any employee of the Company pursuant to Section 4999
        of the
        Code.

       

      Section
        3.12 Employees.
        Schedule
        3.12(i)
        hereto
        sets forth the name, current annual compensation rate (including bonus and
        commissions), title, current base salary rate, accrued sick leave and accrued
        vacation benefits of each present employee of the Company. Except as disclosed
        in Schedule
        3.12(ii) hereto,
        no such employee is absent from work on long term disability leave, extended
        leave of absence or receiving workers’ compensation benefits. Schedule
        3.12(i))
        hereto
        further lists all such employees, as well as consultants, agents and independent
        contractors, covered by an employment, non-competition, consulting or severance
        agreement with the Company, and the Company has provided or made available
        to
        the Parent current and complete copies of each such agreement, as well as
        copies
        of any confidentiality or other agreement covering proprietary processes,
        formulae or information applicable to any such Person. Except as set forth
        in
Schedule
        3.12(iii),
        the
        Company is not a party to or otherwise bound by any collective bargaining
        agreement, contract or other agreement or understanding with a labor union
        or
        labor organization, nor is the Company subject to an application or election
        regarding the acquiring of bargaining rights by any labor union or labor
        organization, nor is the Company the subject of any proceeding asserting
        that it
        has committed an unfair labor practice or seeking to compel it to bargain
        with
        any labor union or labor organization nor is there pending or, to the Company’s
        knowledge, threatened, any labor strike, dispute, walkout, work stoppage,
        slowdown or lockout involving the Company. The Company is in compliance in
        all
        material respects with all Legal Requirements respecting employment and
        employment practices, independent contractor arrangements, terms and conditions
        of employment, workers’ compensation, wages, hours of work and occupational
        safety and health. Except as disclosed on Schedule
        3.12(iii)
        hereto,
        there is no action, suit or legal, administrative, arbitration, grievance
        or
        other proceeding pending or, to the Company’s knowledge, threatened, or, to the
        Company’s knowledge, any investigation pending or threatened against the Company
        relating to its employment practices or any of the Legal Requirements described
        in this Section 3.12.

       

      


      
        
          
            
            

          

          
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      Section
        3.13 Restrictions
        on Business Activities.
        Except
        as set forth in Schedule 3.13
        hereto,
        there is no agreement, commitment, judgment, injunction, order or decree
        binding
        upon the Company or its assets or to which the Company is a party which has
        or
        could reasonably be expected to have the effect of prohibiting or materially
        impairing any business practice of the Company, any acquisition of property
        by
        the Company or the conduct of business by Company as currently
        conducted.

       

      Section
        3.14 Personal
        Property.
        The
        Company has good title to, or holds by valid and existing lease or license,
        all
        of the tangible personal property (“Personal
        Property”)
        reflected in the Unaudited Financial Statements or acquired by the Company
        after
        January 1, 2008, except with respect to assets set forth in Schedule
        3.14(a)
        hereto
        or disposed of in the ordinary course of business since such date, free and
        clear of any Liens. The Personal Property owned or leased by the Company
        is
        sufficient for the conduct of its business as presently conducted and is
        listed
        on Schedule
        3.14(b)
        hereto.
        Each item constituting Personal Property is free from defects, has been
        maintained in accordance with normal industry practice, is in good operating
        condition and repair (subject to normal wear and tear) and is suitable for
        the
        purposes for which it presently is used. 

       

      Section
        3.15 Real
        Property.
        (a)  
        Other
        than the real property being acquired pursuant to the Real Estate Purchase
        Agreement, the
        Company does not now own or, at any time, has owned any real property.
Schedule
        3.15(a)(i)
        hereto
        sets forth a complete and correct list of all real property leased, subleased,
        licensed, operated or occupied by the Company (collectively the “Company
        Leases”)
        and the
        location of the premises. The premises subject to the Company Leases are
        hereinafter referred to as “Company
        Leased Property”.
        Except
        as set forth in Schedule
        3.15(a)(ii)
        hereto,
        neither the Company, nor, to the Company’s knowledge, any other party is in
        default under any of the Company Leases, nor does there exist any condition
        which, upon the passage of time or the giving of notice or both, would cause
        a
        default, nor has any waiver, indulgence or postponement of any of the Company’s
        obligations, as lessees, been granted by any owner of the Company Leased
        Property. All rent and other sums and charges payable by the Company as lessee
        or sublessee under the Company Leases are current. Except as set forth in
        Schedule
        3.15(a)(i)
        hereto,
        no Company Leased Property is occupied by a third party other than the Company,
        and, to the Company’s knowledge, no third party has a right to occupy such
        property other than the Company. The Company has provided to the Parent complete
        and correct copies of all the Company Leases, including all amendments thereto;
        no term or condition of any of the Company Leases has been modified, amended
        or
        waived except as shown in such copies; and there are no other agreements
        or
        arrangements whatsoever relating to the Company’s use or occupancy of any of the
        Company Leased Property. The Company has not transferred, mortgaged or assigned
        any interest in any of the Company Leases. To the Company’s knowledge, there is
        no pending or threatened condemnation or similar proceeding affecting any
        Company Leased Property or any portion thereof, and each Company Leased Property
        is supplied with utilities and other services sufficient to operate the business
        of the Company as presently conducted. The Company Leased Property is in
        good
        operating condition and repair and is suitable for the conduct of business
        as
        presently conducted therein.

       

      


      
        
          
            
            

          

          
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      (b) Except
        for ordinary wear and tear, all of the buildings, fixtures, improvements
        and
        structures with respect to the Company Leased Property are in a good state
        of
        maintenance, operating condition and repair, and there are no defects with
        respect thereto or existing condition that would impair the continued day-to-day
        use of any such buildings, fixtures, improvements or structures in substantially
        the same manner as conducted prior to Closing or that would subject the Parent
        or the First Surviving Corporation to any liability under Legal Requirements.
        Except as set forth in Schedule
        3.15(b),
        the
        Company Leased Property is not located within any flood plain or area subject
        to
        wetlands regulation or any similar Legal Requirements. 

       

      (c) There
        are
        no restrictions of any nature in respect of the transactions contemplated
        by
        this Agreement in the Company Leases either by the terms of such Company
        Lease
        or by operation of any Legal Requirement, and, except as set forth in
Schedule
        3.15(c),
        no
        consent of any Person is required in respect of the transactions contemplated
        by
        this Agreement with respect to any Company Lease. The Company is in peaceful
        and
        undisturbed possession of the Company Leased Property. 

       

      (d) The
        Company Leased Property is in compliance with all Legal Requirements. There
        is
        no pending or, to the Company’s knowledge, threatened Proceeding to rezone any
        of the Company Leased Property. Use of the Company Leased Property for the
        various purposes for which it is currently being used and the proposed use by
        the Parent of the Company Leased Property are permitted as of the date hereof
        and not restricted or impaired under any Legal Requirement and are not subject
        to permitted non-conforming use or structure classifications. The Company
        has
        not received notice of any violation of any Legal Requirement or any covenants,
        deed restrictions or easements arising out of, relating to or affecting the
        Company Leased Property.

       

      (e) The
        Company has good and valid rights of ingress and egress to and from all Company
        Leased Property from and to the public street systems for all usual road,
        street
        and utility purposes and other purposes necessary or incidental to the operation
        of the business of the Company. There is no pending or, to the Company’s
        knowledge, threatened plan to modify or realign any street, and there is
        no
        pending or, to the Company’s knowledge, threatened eminent domain proceeding, in
        each case that would result in the taking of all or any part of the Company
        Leased Property or that would prevent or hinder the continued use of the
        Company
        Leased Property as heretofore used. 

       

      (f) The
        Company has all Permits required under any Legal Requirement with respect
        to the
        occupancy, ownership and use of the Company Leased Property. The current
        occupancy and use of the Company Leased Property do not violate any of such
        Legal Requirements, and no proceeding is pending or, to the Company’s knowledge,
        threatened to limit, modify, revoke or suspend any of the Permits or to
        challenge, condition or restrict the lease, occupancy, operations, ownership
        or
        use of the Company at any portion of the Company Leased Property. No Permit
        with
        respect to the occupancy, ownership and use of the Company Leased Property
        will
        be subject to limitation, modification, revocation or suspension as a result
        of
        the transactions contemplated by this Agreement. 

       

      Section
        3.16 Title
        to Assets; Condition of Assets.
        (a)
        The
        Company owns, and has good and valid title to, all assets purported to be
        owned
        by it, including: (i) all assets reflected on the Audited Financial Statements
        and the Unaudited Financial Statements (except for assets sold or otherwise
        disposed of in the ordinary course of business since March 31, 2008); and
        (ii)
        all other assets reflected in the books and records of the Company as being
        owned by the Company. All of said assets are owned by the Company free and
        clear
        of any Liens, except for Permitted Liens.

       

      (b) All
        items
        of equipment, Personal Property, and other tangible assets owned by or leased
        to
        the Company are adequate for the uses to which they are being put, are in
        good
        and safe condition and repair (ordinary wear and tear excepted) and are adequate
        for the conduct of the business of the Company in the manner in which such
        business is currently being conducted and presently proposed to be conducted.
        

       

      Section
        3.17 Tax
        Matters.
        (a)
        Except as set forth in Schedule
        3.17(a),
        all Tax
        Returns required to be filed in respect of the Company have been duly and
        timely
        filed. All such Tax Returns are true, correct and complete. All Taxes of
        the
        Company, whether or not shown as due on such Tax Returns, have been fully
        paid
        when due. The Company has established on its financial statements (including
        without limitation the Audited Financial Statements and the Unaudited Financial
        Statements) in accordance with U.S. GAAP adequate reserves for Taxes accrued
        but
        not yet due or has determined in accordance with U.S. GAAP that such reserves
        are not necessary. 

       

      (b) Except
        as
        set forth in Schedule
        3.17(b),
        there
        are no investigations, audits, actions or proceedings currently pending or,
        to
        the Company’s knowledge, threatened against the Company by any Governmental
        Entity for the assessment or collection of Taxes, no claim for the assessment
        or
        collection of Taxes has been asserted against the Company, and there are
        no
        matters under discussion, audit or appeal between the Company with any
        Governmental Entity with respect to the assessment or collection of Taxes.
        Any
        unpaid Taxes that have been claimed or imposed as a result of any examination
        of
        any Tax Return of the Company by any Governmental Entity are being contested
        in
        good faith and are fully described in Schedule
        3.17(b).
        There
        are no Tax Liens on any of the assets of the Company other than Permitted
        Liens.
        The Company has not agreed to make any material adjustment under Code Section
        481(a) (or analogous provision of any Legal Requirement) by reason of a change
        in accounting method or otherwise. No power of attorney has been granted
        by or
        with respect to the Company with respect to any matter relating to Taxes.
        The
        Company has not participated in a transaction that is described as a “reportable
        transaction” within the meaning of Treasury Regulation § 1.6011-4(b)(1). During
        the last three years, the Company has not been a party to any transaction
        to
        which Code Section 355 applied. The Company has not received any claim from
        any
        Governmental Entity in a jurisdiction in which the Company files Tax Returns
        that any of them may be subject to taxation by that jurisdiction. No adjustment
        relating to the timing of income, deductions, losses or credits of the Company
        have been made in writing by any Governmental Entity in any completed audit
        or
        examination which, by application of the result of such adjustment, could
        reasonably be expected to result in a material Tax liability for any subsequent
        period. The Company is not subject to any action or proceeding of a Governmental
        Entity imposing on the Company any obligations or liabilities with respect
        to
        another Person’s Taxes.

       

      


      
        
          
            
            

          

          
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      (c) Set
        forth
        in Schedule
        3.17(c)
        is a
        list of the most recent examinations and audits by Governmental Entities
        for
        each Tax for which the Company has been audited during the last five years.
        The
        Company has provided to the Parent true and complete copies of the final
        reports
        and notices of assessment of the relevant Governmental Entity for each such
        examination or audit showing the adjustments proposed and the basis asserted
        therefor.

       

      (d) Except
        as
        set forth in Schedule 3.17(d),
        the
        Company has withheld or deducted all Taxes or other amounts from payments
        to
        employees or other persons required to be so withheld or deducted, and has
        timely paid over such Taxes or other amounts to the appropriate Governmental
        Entity to the extent due and payable.

       

      (e) Except
        as
        set forth in Schedule
        3.17(e),
        the
        Company has not requested, offered to enter into or entered into any agreement
        or other arrangement, or executed any waiver, providing for any extension
        of
        time within which (i) to file any Tax Return covering any Taxes for which
        it is
        or may be liable; (ii) to file any elections, designations or similar filings
        relating to Taxes for which it is or may be liable; (iii) it is required
        to pay
        or remit any Taxes or amounts on account of Taxes; or (iv) any Government
        Entity
        may assess or collect Taxes for which it is or may be liable. Except as set
        forth in Schedule
        3.17(e),
        the
        Company has not entered into any agreement with, or provided any undertaking
        to,
        any Person, and no circumstances exist by reason of which the Company has
        assumed liability for the payment of Taxes owing by another Person, or has
        or
        may be liable for another Person’s Taxes. 

       

      (f) “Tax”
or
        “Taxes”
means
        any taxes of any kind, including but not limited to those on or measured
        by or
        referred to as income, gross receipts, capital, sales, goods and services,
        use,
        ad valorem, franchise, profits, stamp, license, withholding, employment,
        payroll, premium, value added, property or windfall profits taxes, surtaxes,
        environmental transfer taxes, social security taxes, national health
        contributions, pension and employment insurance contributions, customs, duties
        or similar fees, assessments or charges of any kind whatsoever, together
        with
        any interest and any penalties, additions to tax or additional amounts imposed
        by any Governmental Entity, domestic or foreign.

       

      (g) “Tax
        Return”
means
        any return, declaration, report, election, notice, statement or information
        return and including any amendment, schedule, attachment, part, supplement,
        appendix and exhibit thereto, made, prepared, filed or required to be filed
        with
        any Governmental Entity, domestic or foreign, with respect to
        Taxes.

       

      Section
        3.18 Environmental
        Matters.
        (a)
        Except as disclosed on Schedule
        3.18(a)
        hereto:
        (i) the Company has complied with all applicable Environmental Laws;
        (ii) the Company has no liability under any Environmental Law for any
        Hazardous Substance disposal or contamination on the properties currently
        owned
        or operated by the Company; (iii) the Company has no liability under any
        Environmental Law for any Hazardous Substance disposal or contamination on
        the
        properties formerly owned or operated by the Company; (iv) the Company has
        no
        liability under any Environmental Law for any Hazardous Substance disposal
        or
        contamination on any third party property; (v) the Company is not in violation
        of or has any liability under any Environmental Law for any release or threat
        of
        release of any Hazardous Substance; (vi) the Company has not received any
        written notice, demand, letter, claim or request for information alleging
        that
        it may be in violation of or liable under any Environmental Law; (vii) the
        Company is not subject to any orders, decrees, injunctions or other arrangements
        with any Governmental Entity or an indemnitor of any third party indemnitee
        for
        any liability under any Environmental Law or relating to Hazardous Substances;
        (viii) to the Company’s knowledge, there are no circumstances or conditions
        involving the Company that could reasonably be expected to result in any
        claims,
        liability, investigations, costs or restrictions on the ownership, use, or
        transfer of any of its property pursuant to any Environmental Law; (ix) to
        the
        Company’s knowledge, none of the properties the Company leases or otherwise
        occupies contains any underground storage tanks, asbestos-containing material,
        lead-based paint, or polychlorinated biphenyls in violation of any Environmental
        Law or that would reasonably be expected to result in liability under any
        Environmental Law; and (x) the Company has not engaged in any activities
        involving the generation, use, handling or disposal of any Hazardous Substances
        in violation of any Environmental Law or that would reasonably be expected
        to
        result in any liability under any Environmental Law.

       

      


      
        
          
            
            

          

          
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      (b) As
        used
        in this Agreement, the term “Environmental
        Law”
        means
        any federal, state, local or foreign law, regulation, order, decree, permit,
        authorization, policy, opinion, common law or agency requirement relating
        to:
        (i) the protection, investigation or restoration of the environment, health
        and
        safety, or natural resources; (ii) the handling, use, presence, disposal,
        release or threatened release of any chemical substance or (iii) noise, odor,
        wetlands, pollution, contamination or any injury or threat of injury to persons
        or property.

       

      (c) As
        used
        in this Agreement, the term “Hazardous
        Substance”
        means
        any substance that is: (i) listed, classified or regulated pursuant to any
        Environmental Law; (ii) any petroleum product or by-product, asbestos-containing
        material, lead-containing paint or plumbing, polychlorinated biphenyls,
        radioactive materials or radon; or (iii) any other substance which is the
        subject of regulatory action by any Governmental Entity pursuant to any
        Environmental Law. 

       

      Section
        3.19 Brokers
        and Finders.
        Except
        as set forth in Schedule
        3.19
        hereto,
        the Company has not incurred, nor will it incur, directly or indirectly,
        any
        liability for brokerage, finders’ fees, agent’s commissions or any similar
        charges in connection with this Agreement or any transactions contemplated
        hereby. The
        Company shall bear the cost of any payments to which any Person listed
        in
        Schedule 3.19
        hereto
        shall be entitled and such costs shall be deemed to be part of the Total
        Indebtedness.
        

       

      Section
        3.20 Intellectual
        Property.
        For the
        purposes of this Agreement, the following terms have the following
        definitions:

       

      “Intellectual
        Property”
        shall
        mean any or all of the following and all worldwide common law and statutory
        rights in, arising out of, or associated therewith: (i) patents and applications
        therefor and all reissues, divisions, renewals, extensions, provisionals,
        continuations and continuations-in-part thereof (“Patents”);
        (ii)
        inventions (whether patentable or not), invention disclosures, improvements,
        trade secrets (including, but not limited to, certain formulas, recipes and
        processes), test procedures, formulas and other confidential information,
        proprietary information, know how, technology, technical data and customer
        lists, and all documentation relating to any of the foregoing; (iii) copyrights,
        copyrights registrations and applications therefor, and all other rights
        corresponding thereto throughout the world; (iv) software and software programs;
        (v) domain names, uniform resource locators and other names and locators
        associated with the Internet; (vi) industrial designs and any registrations
        and
        applications therefor; (vii) trade names and other names and slogans embodying
        business goodwill or indications of origin, logos, common law trademarks
        and
        service marks, trademark and service mark registrations and applications
        or
        registrations in any jurisdiction pertaining to the foregoing and all goodwill
        associated therewith (collectively, “Trademarks”);
        (viii)
        all databases and data collections and all rights therein; (ix) all moral
        and
        economic rights of authors and inventors, however denominated, and (x) any
        similar or equivalent rights to any of the foregoing (as
        applicable).

       

      


      
        
          
            
            

          

          
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      “Company
        Intellectual Property”
        shall
        mean any Intellectual Property that is owned by, or exclusively licensed
        to,
        Company, including software and software programs developed by or exclusively
        licensed to the Company (specifically excluding any off the shelf or shrink-wrap
        software).

       

      “Registered
        Intellectual Property”
        means
        all Intellectual Property that is the subject of an application, certificate,
        filing, registration or other document issued, filed with, or recorded by
        any
        private, state, government or other legal authority.

       

      “Company
        Registered Intellectual Property”
        means
        all of the Registered Intellectual Property owned by, or filed in the name
        of,
        Company.

       

      “Company
        Products”
        means
        all current versions of products of the Company.

       

      (a) Except
        as
        disclosed on Schedule
        3.20(a)
        hereto,
        no Company Intellectual Property or Company Product is subject to any Proceeding
        or outstanding decree, order, judgment, contract, license, agreement or
        stipulation which has been served on the Company, or to the Company’s knowledge,
        otherwise pending, restricting in any manner the use, transfer or licensing
        thereof by the Company, or which may affect the validity, use or enforceability
        of such Company Intellectual Property or Company Product.

       

      (b) Except
        as
        disclosed on Schedule
        3.20(b)
        hereto,
        the Company owns and has good and marketable title to each item of Company
        Intellectual Property owned by it free and clear of any Liens and encumbrances
        (excluding non-exclusive licenses and related restrictions granted by it
        in the
        ordinary course of business); and the Company is the exclusive owner of all
        registered Trademarks used in connection with the operation or conduct of
        the
        business of the Company as now conducted, including the sale of any products
        or
        the provision of any services by the Company.

       

      (c) To
        the
        Company’s knowledge, the operation of the business of the Company as such
        business currently is conducted, including (i) the design, development,
        manufacture, distribution, reproduction, marketing or sale of the Company
        Products and (ii) the Company’s use of any product, device or process has not
        infringed or misappropriated and does not infringe or misappropriate the
        Intellectual Property of any third party or constitute unfair competition
        or
        trade practices under the laws of any jurisdiction.

       

      


      
        
          
            
            

          

          
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      Section
        3.21 Agreements,
        Contracts and Commitments.
        (a)
Schedule
        3.21(a)
        hereto
        sets forth a complete and accurate list of all Material Company Contracts,
        specifying the parties thereto. For purposes of this Agreement, (i) the term
        “Company
        Contracts”
        shall
        mean all contracts, agreements, leases, mortgages, indentures, notes, bonds,
        franchises, purchase orders, sales orders, and other understandings, commitments
        and obligations of any kind, whether written or oral, to which the Company
        is a
        party or by or to which any of the properties or assets of Company may be
        bound,
        subject or affected (including without limitation notes or other instruments
        payable to the Company), and (ii) the term “Material
        Company Contracts”
        shall
        mean each of the following Company Contracts:

       

      (i) any
        Company Contract that contains a covenant not to compete or other covenant
        (A) limiting or restricting the development, manufacture, marketing,
        distribution or sale of any of the products or services of the Company or
        any
        future line extension of such products or services into other forms,
        (B) limiting or restricting the ability of the Company to enter into any
        market or line of business or to compete with any other Person or (C)
        restricting or prohibiting the Company from transacting business or dealing
        in
        any manner with any other Person;

       

      (ii) any
        Company Contract that contains a “most-favored nation” or
“most-favored-customer” clause;

       

      (iii) any
        Company Contract with any affiliate of the Company or any director, officer,
        shareholder or employee of the Company;

       

      (iv) any
        advertising Company Contract requiring expenditures or fees in excess of
        $50,000
        in any twelve-month period;

       

      (v) any
        continuing Company Contract for the future purchase or price of raw materials,
        supplies or equipment which involves or would reasonably be expected to involve
        the payment by the Company of more than $75,000 in any twelve month period
        or
        which contain minimum purchase conditions or requirements or other terms
        that
        restrict or limit the purchasing relationships of the Company;

       

      (vi) any
        Company Contract relating in whole or in part to the Intellectual Property
        of
        the Company (including maintenance agreements and any other agreement relating
        to Intellectual Property and Company Products and any Company Contract under
        which the Company is licensee or licensor of any such Intellectual Property
        and
        Company Products);

       

      


      
        
          
            
            

          

          
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      (vii) any
        management, employment, service, consulting, severance or other similar type
        of
        Company Contract;

       

      (viii) any
        mortgage, pledge, security agreement, deed of trust, loan agreement, credit
        agreement, indenture, conditional sale or title retention agreement, equipment
        financing obligation or other instrument or agreement granting a Lien upon
        any
        of the properties or assets of the Company;

       

      (ix) any
        obligation to register any shares of the capital stock or other securities
        of
        the Company with any Governmental Entity;

       

      (x) any
        obligation to make payments, contingent or otherwise, arising out of the
        prior
        acquisition of the business, assets or capital stock of other
        Persons;

       

      (xi) any
        collective bargaining agreement or other Company Contract with any labor
        union
        or association representing employees;

       

      (xii) any
        Company Contract to make any capital expenditures or capital additions or
        improvements with commitment in excess of $75,000 in any twelve-month period
        or
        in excess of $100,000 in the aggregate over the term of such Company
        Contract;

       

      (xiii) any
        Company Contract relating to the storage or warehousing of any inventory
        or
        products of the Company, or the charter or purchase of transportation or
        shipping services;

       

      (xiv) any
        guarantees or other Company Contracts in respect of any indebtedness of any
        Person;

       

      (xv) any
        Company Contract providing for the indemnification of any current or former
        director, officer or employee of the Company;

       

      (xvi) any
        lease
        or similar arrangement for the use by the Company of personal property (other
        than leases of vehicles, office equipment or operating equipment where the
        annual lease payments are less than $12,000 in the aggregate); and

       

      (xvii) any
        other
        material Company Contract to which the Company is a party or by which any
        of
        their assets are bound.

       

      (b) Each
        Company Contract was entered into at arms’ length and in the ordinary course, is
        in full force and effect and is valid and binding upon and enforceable against
        each of the parties thereto in accordance with its terms, subject to the
        effects
        of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
        and
        other similar Legal Requirements relating to or affecting creditors’ rights
        generally, general equitable principles (whether considered in a proceeding
        in
        equity or at law) and an implied covenant of good faith and fair dealing.
        True,
        correct and complete copies of all Material Company Contracts (or written
        summaries in the case of oral Material Company Contracts) have been heretofore
        made available to the Parent or the Parent’s counsel.

       

      


      
        
          
            
            

          

          
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      (c) Except
        as
        set forth in Schedule
        3.21(c)
        hereto,
        neither the Company nor, to the Company’s knowledge, any other party thereto is
        in breach of or in default under, and no event has occurred or circumstance
        or
        condition exist, that (with or without notice or lapse of time or both) would
        reasonably be expected to (i) result in a violation of or a default under
        any
        Material Company Contract, (ii) give any party the right to cancel or terminate
        or modify any Material Company Contract or (iii) give any party to any Material
        Contract the right to seek damages or other remedies. Except as set forth
        in
Schedule
        3.21(c)
        hereto,
        there have been no oral or written modifications, amendments or waivers with
        respect to any of the terms of any of the Material Company Contracts. No
        party
        to any Material Company Contract has given any written notice of any claim
        of
        any breach, default or event, which, with notice or lapse of time or both
        would
        become a breach of or default under, any Material Company Contract. Each
        Material Company Contract to which the Company is a party or by which it
        is
        bound that has not expired by its terms is in full force and
        effect.

       

      (d) Each
        Material Company Contract that requires or may require the consent or waiver
        of
        a third party prior to consummation of the transactions contemplated by this
        Agreement in order to avoid a breach or violation of, or default under, such
        Material Company Contract is identified and marked by an asterisk on
Schedule
        3.21(d)
        hereto.

       

      Section
        3.22 Insurance.
        (a)
Schedule
        3.22
        hereto
        sets forth (i)  the policies of insurance presently in force covering
        the Company including, without restricting the generality of the foregoing,
        those covering public and product liability, personnel, properties, buildings,
        machinery, equipment, furniture, fixtures and operations, specifying with
        respect to each such policy, the name of the insurer, type of coverage, term
        of
        policy, limits of liability and annual premium; (ii) the Company’s premiums
        and losses by year, by type of coverage, for the past five years based on
        information received from the Company’s insurance carrier(s); (iii) all
        outstanding insurance claims by the Company for damage to or loss of property
        or
        income which have been referred to insurers or which the Company believes
        to be
        covered by commercial insurance; (iv) general comprehensive liability
        policies carried by the Company for the past five years, including excess
        liability policies; and (v) any agreements, arrangements or commitments by
        or relating to the Company and under which the Company indemnifies any other
        Person or is required to carry insurance for the benefit of any other Person.
        The Company has heretofore delivered to the Parent complete and correct copies
        of the policies and agreements set forth in Schedule
        3.22
        hereto.


       

      (b) The
        insurance policies set forth in Schedule
        3.22
        hereto
        are in full force and effect, all premiums with respect thereto covering
        all
        periods up to and including the date of the Closing have been paid, and no
        notice of reduction, cancellation or termination has been received with respect
        to any such policy. Such policies are sufficient for compliance with all
        material Legal Requirements and all agreements relating to the Company; are
        valid, outstanding and enforceable policies; provide adequate insurance coverage
        for the assets and operations of its business; will remain in full force
        and
        effect through the respective dates set forth in Schedule
        3.22
        hereto
        without the payment of additional premiums; and will not in any way be affected
        by, or terminate or lapse by reason of, the transactions contemplated by
        this
        Agreement. Schedule
        3.22
        hereto
        identifies all risks which have been designated as being self insured. The
        Company has not been refused any insurance, nor has any such coverage been
        limited, by any insurance carrier to which the Company has applied for any
        such
        insurance or with which the Company has carried insurance during the last
        five
        years.

       

      


      
        
          
            
            

          

          
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      Section
        3.23 Affiliate
        Interests.
        (a)
        Except as set forth in Schedule
        3.23(a)
        hereto,
        since January 1, 2008, there have been no transactions, agreements,
        arrangements, understandings, obligations, liabilities or claims (“Affiliate
        Arrangements”)
        between
        the Company and a Person (i) that is an affiliate of the Company or (ii)
        with
        respect to which any affiliate of the Company, or any member of the immediate
        family of any such affiliate, owns more than 10% of the voting equity of
        such
        Person. All such Affiliate Arrangements were entered into in the ordinary
        course
        of business and on commercially reasonable terms and conditions. Any accounts
        due and payable by the Company to any affiliate thereof are recorded on the
        books and records of the Company, as the case may be, at their fair market
        value. Since the January 1, 2008, there has been no repayment, forgiveness
        or
        other release of a debt owed by or to a Person not at arms-length with the
        Company or its shareholders.

       

      (b) Except
        as
        set forth in Schedule
        3.23(b)
        hereto,
        no shareholder, employee, officer or director of the Company has any material
        interest in any property, real or personal, tangible or intangible, including
        without limitation inventions, patents, trademarks or trade names, used in
        or
        pertaining to the business of the Company.

       

      Section
        3.24 Board
        Approval.
        The
        Board of Directors of the Company (including any required committee or subgroup
        thereof) has, as of the date of this Agreement, duly approved, subject to
        the
        approval of the Shareholder (which has been provided), this Agreement and
        the
        transactions contemplated hereby.

       

      Section
        3.25 Shareholder
        Approval.
        On or
        prior to the date of this Agreement, the Company will have provided the written
        consent of its shareholders pursuant to Section 10-1103 of the ABCA sufficient
        for Shareholder Approval.

       

      Section
        3.26 Proxy
        Statement.
        The
        information to be supplied by the Company for inclusion in the Parent’s proxy
        statement (such proxy statement as amended or supplemented is referred to
        herein
        as the “Proxy
        Statement”)
        to be
        sent in connection with the meeting of the Parent’s stockholders to consider the
        approval of this Agreement (the “Parent
        Stockholders’ Meeting”)
        shall
        not, on the date the Proxy Statement is first mailed to the Parent’s
        stockholders, and at the time of the Parent Stockholders’ Meeting, contain any
        untrue statement of a material fact or omit to state any material fact required
        to be stated therein or necessary in order to make the statements therein,
        in
        light of the circumstances under which they are made, not false or misleading;
        or omit to state any material fact necessary to correct any statement provided
        by the Company in any earlier communication with respect to the solicitation
        of
        proxies for the Parent Stockholders’ Meeting which has become false or
        misleading. If at any time prior to the Effective Time, any event relating
        to
        the Company or any of its affiliates, officers or directors should be discovered
        by the Company which should be set forth in a supplement to the Proxy Statement,
        the Company shall promptly inform the Parent. Notwithstanding the foregoing,
        the
        Company makes no representation or warranty with respect to any information
        supplied by the Parent or any Person other than the Company which is contained
        in any of the foregoing documents.

       

      


      
        
          
            
            

          

          
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      Section
        3.27 [Reserved]

       

      Section
        3.28 Distributors,
        Suppliers and Customers.
        The
        relationships of the Company with its, suppliers, customers, and licensors
        or
        sublicensors of rights with respect to Intellectual Property are reasonably
        good
        commercial working relationships and no (i) supplier to the Company (excluding,
        for the avoidance of doubt, employees of the Company), or (ii) distributor
        or
        customer to the Company has cancelled or otherwise terminated, or threatened
        to
        cancel or otherwise terminate, its relationship with the Company. Schedule
        3.28
        hereto
        identifies each supplier and each distributor with which the Company is doing
        business and each customer for whom the Company has ongoing obligations.
        Neither
        Russell nor the Company has any reason to believe that the benefits of any
        relationship with any customers, suppliers or distributors of the Company
        will
        not continue after the Closing Date in substantially the same manner as prior
        to
        the date of this Agreement. 

       

      Section
        3.29 Product
        Liabilities.
        Except
        as set forth in Schedule
        3.29
        hereto,
        neither Russell nor the Company has received any written complaints of any
        damages to any Person relating to any Company Products or other products,
        goods
        or services of the Company.

       

      Section
        3.30 No
        Other Agreements to Purchase.
        Except
        for the Parent’s right under this Agreement, no Person has any written or oral
        agreement, option, understanding or commitment or any right or privilege
        (whether by law, contractual or otherwise) capable of becoming such
        for:

       

      (a) the
        purchase or acquisition from Russell of any shares of capital stock;
        or

       

      (b) the
        purchase, subscription, allotment or issuance of any of the unissued shares
        or
        other securities of the Company.

       

      Section
        3.31 Representations
        and Warranties Complete.
        No
        representations or warranties by Russell or the Company in this Agreement,
        including the Schedules hereto, and no statement contained in any document
        (including without limitation the Unaudited Financial Statements, certificates,
        or other writing) furnished or to be furnished by Russell or the Company
        to the
        Parent pursuant to the provisions hereof contains or will contain any untrue
        statement of material fact or omits or will omit to state any material fact
        necessary, in order to make the statements herein or therein in light of
        the
        circumstances under which they are made, not misleading. There is no fact
        known
        to Russell or the Company which has had or would reasonably be expected to
        have
        a Material Adverse Effect which has not been set forth in this Agreement,
        including the Schedules hereto and the Unaudited Financial Statements. Russell
        and the Company have furnished or caused to be furnished to the Parent complete
        and correct copies of all Company Contracts or other documents referred to
        in
        the Schedules hereto or underlying a disclosure of Russell or the Company
        set
        forth in the Schedules hereto.

       

      


      
        
          
            
            

          

          
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      Section
        3.32 Bank
        Accounts.
        Schedule
        3.32
        hereto
        sets forth a list of all bank and savings accounts, certificates of deposit
        and
        safe deposit boxes of the Company including the name and address of each
        bank
        branch and the names of those persons authorized to sign thereon as of the
        date
        of this Agreement.

       

      Section
        3.33 Powers
        of Attorney.
        Except
        as set forth in Schedule
        3.33
        hereto,
        there are no outstanding powers of attorney executed on behalf of Russell
        or the
        Company.

       

      Section
        3.34 Total
        Indebtedness.
        Except
        as set forth in Schedule
        3.34
        hereto,
        after giving effect to the Closing, the Company shall have no liability for
        Total Indebtedness other than the Estimated Total Indebtedness paid on the
        Closing Date in accordance with Section 2.1(b)(ii).

       

      ARTICLE
        IV 

       

      REPRESENTATIONS
        AND WARRANTIES OF PARENT, MERGER SUB AND OREGANO LLC

       

      The
        Parent, Merger Sub and Oregano LLC represent and warrant as follows to the
        Company, and acknowledge and confirm that the Company is relying upon the
        following representations and warranties in entering into this
        Agreement:

       

      Section
        4.1 Organization
        and Qualification.
        (a) The
        Parent is a corporation duly incorporated, validly existing and in good standing
        under the laws of the State of Delaware and has the requisite corporate power
        and authority to own, lease and operate its assets and properties and to
        carry
        on its business as it is now being or currently planned by the Parent to
        be
        conducted. 

       

      (b) The
        Parent is duly qualified or licensed to do business as a foreign corporation
        and
        is in good standing, in each jurisdiction where the character of the properties
        owned, leased or operated by it or the nature of its activities makes such
        qualification or licensing necessary, except for such failures to be so duly
        qualified or licensed and in good standing that could not, individually or
        in
        the aggregate, reasonably be expected to have a Material Adverse Effect on
        the
        Parent.

       

      (c) Merger
        Sub was established for the purpose of the Transaction. Merger Sub is a
        corporation duly incorporated, validly existing and in good standing under
        the
        laws of the State of Arizona and has the requisite corporate power and authority
        to own, lease and operate its assets and properties and to carry on its business
        as it is now being or currently planned by the Parent to be conducted.


       

      


      
        
          
            
            

          

          
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      (d) Oregano
        LLC was established for the purpose of the Transaction. Oregano LLC is a
        limited
        liability company duly formed, validly existing and in good standing under
        the
        laws of the State of Delaware and has the requisite limited liability company
        power and authority to own, lease and operate its assets and properties and
        to
        carry on its business as it is now being or currently planned by the Parent
        to
        be conducted. 

       

      Section
        4.2 Authority
        Relative to this Agreement.
        Other
        than (i) the filing the Certificate of Merger and such other documents as
        required by the ABCA; (ii) the filing of the Second Certificate of Merger
        and
        such other documents as required by the DLLCA and the ABCA; and (iii) the
        Parent
        Stockholder Approval, each of the Parent, Merger Sub and Oregano LLC has
        full
        corporate and limited liability power, as the case may be, and authority
        to: (A)
        execute, deliver and perform this Agreement, and each ancillary document
        which
        the Parent, Oregano LLC or Merger Sub has executed or delivered or is to
        execute
        or deliver pursuant to this Agreement, and (ii) carry out the Parent’s, Merger
        Sub’s and Oregano LLC’s obligations hereunder and thereunder and, to consummate
        the transactions contemplated hereby (including the First Merger and Second
        Merger, as applicable). The execution and delivery of this Agreement and
        the
        consummation by the Parent, Merger Sub and Oregano LLC of the transactions
        contemplated hereby (including the First Merger and Second Merger, as
        applicable) have been duly and validly authorized by all necessary corporate
        action or limited liability company action, as the case may be, on the part
        of
        the Parent, Merger Sub and Oregano LLC (including the approval by its board
        of
        directors and board of managers, as applicable), and no other corporate or
        limited liability company proceedings, as the case may be, on the part of
        the
        Parent, Merger Sub or Oregano LLC are necessary to authorize this Agreement
        or
        to consummate the transactions contemplated hereby. This Agreement has been
        duly
        and validly executed and delivered by the Parent, Merger Sub and Oregano
        LLC
        and, assuming the due authorization, execution and delivery thereof by the
        other
        parties hereto, constitutes the legal and binding obligation of the Parent,
        Merger Sub and Oregano LLC, enforceable against the Parent, Merger Sub and
        Oregano LLC in accordance with its terms, except as may be limited by
        bankruptcy, insolvency, reorganization or other similar laws affecting the
        enforcement of creditors’ rights generally and by general principles of
        equity.

       

      Section
        4.3 No
        Conflict; Required Filings and Consents.
        (a)
        Except as set forth in Schedule
        4.3(a)
        hereto,
        no notices, reports or other filings are required to be made with, nor are
        any
        consents, registrations, approvals, permits or authorizations required to
        be
        obtained by the Parent, Merger Sub or Oregano LLC from any Governmental Entity,
        as a result of, in connection with, or as a condition to the execution and
        delivery of this Agreement by the Parent, Merger Sub or Oregano LLC and the
        consummation of the Transaction.

       

      (b) The
        execution, delivery and performance of this Agreement does not, and the
        consummation of the Transaction will not, constitute or result in (A) a breach
        or violation of, or a default (with or without notice, lapse of time or both)
        under, the Parent’s, Merger Sub’s or Oregano LLC’s Charter Documents or limited
        liability company agreement, as applicable, (B) (with or without notice,
        lapse
        of time or both) a breach or violation of, or a default under, the acceleration
        of any obligations under, or the creation of a Lien on any assets of the
        Parent
        pursuant to any contract that is binding upon the Parent, Merger Sub or Oregano
        LLC or any Legal Requirement or governmental or non-governmental permit or
        license to which the Parent is subject or (C) any change in the rights or
        obligations of any party under any of the Parent’s, Merger Sub’s or Oregano
        LLC’s material contracts.

       

      


      
        
          
            
            

          

          
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      Section
        4.4 Compliance.
        The
        Parent is not in violation of any Legal Requirement that would impair the
        Parent’s ability to consummate the transactions contemplated by this
        Agreement.

       

      Section
        4.5 SEC
        Filings; Financial Statements.
        (a) The
        Parent has made available to the Company (except to the extent available
        through
        EDGAR) a correct and complete copy of each report, registration statement
        and
        definitive proxy statement filed by the Parent with the SEC (the “Parent
        SEC Reports”),
        which
        are all the forms, reports and documents required to be filed by the Parent
        with
        the SEC prior to the date of this Agreement. As of their respective dates,
        the
        Parent SEC Reports: (i) were prepared in accordance and complied in all material
        respects with the requirements of the Securities Act or the Exchange Act,
        as the
        case may be, and the rules and regulations of the SEC thereunder applicable
        to
        such Parent SEC Reports; and (ii) did not at the time they were filed (and
        if
        amended or superseded by a filing prior to the date of this Agreement then
        on
        the date of such filing and as so amended or superseded) contain any untrue
        statement of a material fact or omit to state a material fact required to
        be
        stated therein or necessary in order to make the statements therein, in light
        of
        the circumstances under which they were made, not misleading. Except to the
        extent set forth in the preceding sentence, the Parent makes no representation
        or warranty whatsoever concerning the Parent SEC Reports as of any time other
        than the time they were filed.

       

      (b) Each
        set
        of financial statements (including, in each case, any related notes thereto)
        contained in the Parent SEC Reports, including each Parent SEC Report filed
        after the date hereof until the Closing, complied or will comply as to form
        in
        all material respects with the published rules and regulations of the SEC
        with
        respect thereto, was or will be prepared in accordance with U.S. GAAP applied
        on
        a consistent basis throughout the periods involved (except as may be indicated
        in the notes thereto or, in the case of unaudited statements, do not contain
        footnotes as permitted by Form 10-QSB of the Exchange Act) and each fairly
        presents or will fairly present in all material respects the financial position
        of the Parent at the respective dates thereof and the results of its operations
        and cash flows for the periods indicated, except that the unaudited interim
        financial statements were, are or will be subject to normal year-end adjustments
        which were not or are not reasonably expected to have a Material Adverse
        Effect
        on the Parent taken as a whole.

       

      Section
        4.6 Litigation.
        Except
        as set forth in Schedule
        4.6
        hereto,
        there is no civil, criminal or administrative suit, action, proceeding,
        arbitration, investigation, review or inquiry pending or, to the Parent’s
        knowledge, threatened against or affecting the Parent or any of its properties
        or rights, nor is there any judgment, decree, injunction, rule or order of
        any
        Governmental Entity or arbitrator outstanding against or affecting the Parent
        or
        any of its properties or rights (the foregoing collectively referred to as
        “Parent
        Proceedings”).
        None
        of the Parent Proceedings is reasonably likely, either individually or in
        the
        aggregate, to have a Material Adverse Effect or to prevent, impair or materially
        delay the ability of the Parent or the Merger Sub to consummate the transactions
        contemplated by this Agreement.

       

      


      
        
          
            
            

          

          
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      Section
        4.7 Brokers
        and Finders.
        Neither
        the Parent, Oregano LLC, nor Merger Sub has incurred, or will it incur, directly
        or indirectly, any liability for brokerage, finders’ fees, agent’s commissions
        or any similar charges in connection with this Agreement or any transactions
        contemplated hereby, except that the Parent will pay a finder’s fee to Lee Cohn
        such fee to be payable in Parent Common Stock and cash.

       

      Section
        4.8 Trust
        Fund.
        As of
        the date hereof and at the Closing Date, the Parent has and will have no
        less
        than $19,535,000 invested in United States Government securities or in money
        market funds in a trust account administered by Continental (the “Trust
        Fund”),
        less
        such amounts, if any, as the Parent is required to pay to stockholders who
        elect
        to have their shares converted to cash in accordance with the provisions
        of the
        Parent’s Charter Documents.

       

      ARTICLE
        V 

       

      CONDUCT
        PRIOR TO THE EFFECTIVE TIME

       

      Section
        5.1 Conduct
        of Business by Company .
        From
        the date of this Agreement until the Closing and except as contemplated by
        this
        Agreement, the Company shall conduct and Russell shall cause the Company
        to
        conduct its business in the ordinary course of business and in a manner not
        representing a new strategic direction for the Company and the Company shall
        use
        its commercially reasonable efforts to maintain satisfactory business
        relationships with suppliers, customers, distributors, licensors, licensees
        and
        others having material business relationships with it in respect of its
        business. Without limiting the generality of the foregoing, except as
        contemplated by this Agreement and except with the prior written consent
        of the
        Parent (which shall not be unreasonably withheld, conditioned or delayed)
        or as
        set forth in the corresponding subsections of Schedule
        5.1
        hereto,
        from the date hereof until the Closing Date, the Company will not:

       

      (a) adopt
        or
        propose any change in its Charter Documents;

       

      (b) adopt
        a
        plan or agreement of complete or partial liquidation, dissolution, merger,
        consolidation, restructuring, recapitalization or other material reorganization
        of the Company;

       

      (c) declare,
        set aside or pay any dividends on or make any other distributions (whether
        in
        cash, stock, equity securities or property) in respect of any capital stock
        or
        split, combine, subdivide or reclassify any capital stock or issue or authorize
        the issuance of any other securities in respect of, in lieu of or in
        substitution for any capital stock;

       

      


      
        
          
            
            

          

          
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      (d) purchase,
        redeem or otherwise acquire, directly or indirectly, any shares of capital
        stock
        of the Company including repurchases of unvested shares at cost in connection
        with the termination of the relationship with any employee or consultant
        pursuant to stock option or purchase agreements in effect on the date
        hereof;

       

      (e) issue,
        deliver, sell, authorize, pledge or otherwise encumber, or agree to any of
        the
        foregoing with respect to, any shares of capital stock or any securities
        convertible into or exchangeable for shares of capital stock, or subscriptions,
        rights, warrants or options to acquire any shares of capital stock or any
        securities convertible into or exchangeable for shares of capital stock,
        or
        enter into other agreements or commitments of any character obligating it
        to
        issue any such shares or convertible or exchangeable securities;

       

      (f) make
        or
        commit to make any expenditure (outside the ordinary course of business)
        in
        excess of $100,000 (other than the Closing New Restaurant Investment Amount);
        

       

      (g) 
        (i)
        increase the compensation or benefits of any director, officer or employee,
        except as required under any existing agreement as set forth in Schedule
        3.12(i);
        (ii) enter into (or adopt) any new, or amend any existing, Employee Benefit
        Plan; or (iii) hire any new employee at the level of director or manager or
        above or with an annual base salary in excess of $75,000 or promote any level
        to
        director or above;

       

      (h) sell,
        lease, license, encumber (including by the grant of any option thereon) or
        otherwise dispose of any assets or property except pursuant to existing
        contracts or commitments or with respect to the sale of products or services
        of
        the Company in the ordinary course of business;

       

      (i) acquire
        or agree to acquire by merging or consolidating with, or by purchasing any
        equity interest in or a portion of the assets of, or by any other manner,
        any
        business or any Person or division thereof, or otherwise acquire or agree
        to
        acquire any assets which are material, individually or in the aggregate,
        to the
        business of the Company as applicable, to the extent that the aggregate
        consideration to be paid with respect thereto is in excess of
        $100,000;

       

      (j) (i) enter
        into any license or other Company Contract with respect to the Intellectual
        Property owned by the Company; or (ii) enter into any consulting or
        independent contracting arrangement;

       

      (k) directly
        or indirectly, engage in any transaction with, or enter into any Company
        Contract with, any director, officer, shareholder or affiliate of the Company
        or
        any individual known to the Company to be a family member of any such
        Person;

       

      (l) 
        enter
        into any Company Contract to the extent consummation of the transactions
        contemplated by this Agreement or compliance by the Company with the provisions
        of this Agreement would reasonably be expected to conflict with, or result
        in a
        violation or breach of, or default (with or without notice, lapse of time
        or
        both) under, or give rise to a right of, or result in, termination, cancellation
        or acceleration of any obligation or to the loss of a benefit under, or result
        in the creation of any Lien in or upon any of the properties or other assets
        of
        the Company under, or give rise to any increased, additional, accelerated,
        or
        guaranteed right or entitlements of any third party under, or result in any
        alteration of, any provision of such Company Contract;

       

      


      
        
          
            
            

          

          
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      (m) enter
        into any joint ventures, strategic partnerships or alliances or other
        arrangements that provide for exclusivity of territory or otherwise restrict
        such party’s ability to compete or to offer or sell any products or
        services;

       

      (n) enter
        into any Company Contract that limits the ability of the Company, or would
        limit
        the ability of the Parent after the Closing, to compete in or conduct any
        line
        of business or compete with any Person in any geographic area or during any
        period;

       

      (o) enter
        into any Company Contract relating to the research, development, distribution,
        sale, supply, license, marketing, co-promotion or manufacturing of products
        or
        services of the Company or products licensed by the Company, or the Intellectual
        Property of the Company, other than (x) confidentiality agreements entered
        into in the ordinary course of business containing customary terms which
        do not
        impose any obligations on the Company other than those relating to the treatment
        of confidential information, and (y) pursuant to any such Company Contracts
        currently in place (that have been disclosed in writing to the Parent prior
        to
        the date hereof) in accordance with their terms as of the date
        hereof;

       

      (p) (i) incur
        or assume any long-term or short-term debt or issue any debt securities,
        (ii) assume, guarantee, endorse or otherwise become liable or responsible
        (whether directly, contingently or otherwise) for the obligations of any
        other
        Person; (iii) make or cancel, or waive any rights with respect to, any
        loans, advances or capital contributions to, or investments in, any other
        Person; (iv) pledge or otherwise encumber shares of capital stock of the
        Company; or (v) mortgage or pledge any of its tangible or intangible assets
        or properties;

       

      (q) adopt
        or
        amend any employee benefit plan, policy or arrangement, any employee stock
        purchase or employee stock option plan, or enter into any employment contract
        or
        collective bargaining agreement (other than offer letters and letter agreements
        entered into in the ordinary course of business consistent with past practice
        with employees who are terminable “at
        will”),
        pay
        any special bonus or special remuneration to any director or employee, or
        increase the salaries or wage rates or fringe benefits (including rights
        to
        severance or indemnification) of its directors, officers, employees or
        consultants, except in the ordinary course of business consistent with past
        practices;

       

      


      
        
          
            
            

          

          
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      (r) pay,
        discharge, settle or satisfy any claims, liabilities or obligations (absolute,
        accrued, asserted or unasserted, contingent or otherwise), or litigation
        (whether or not commenced prior to the date of this Agreement) other than
        the
        payment, discharge, settlement or satisfaction, in the ordinary course of
        business consistent with past practices or in accordance with their terms,
        or
        liabilities recognized or disclosed in the Unaudited Financial Statements
        or
        incurred since the date of such financial statements, or waive the benefits
        of,
        agree to modify in any manner, terminate, release any person from or knowingly
        fail to enforce any confidentiality or similar agreement to which the Company
        is
        a party or of which the Company is a beneficiary or to which the Parent is
        a
        party or of which the Parent is a beneficiary, as applicable;

       

      (s) enter
        into, modify, amend or terminate any Material Company Contract or waive,
        delay
        the exercise of, release or assign any material rights or claims
        thereunder;

       

      (t) change
        any method of accounting or accounting practice used by it except any change
        required by reason of a concurrent change in U.S. GAAP;

       

      (u) (i) make
        or change any Tax election or Tax accounting method, (ii) settle any Tax
        audit, (iii) file any amended Tax Return or (iv) consent to any extension
        or waiver of the limitation period applicable to any Tax claim or assessment
        relating to the Company;

       

      (v) take
        any
        action that would reasonably be expected to cause any of the representations
        and
        warranties of the Company not to be true and correct as of the date of such
        action or as of the Closing or otherwise prevent, delay or impede the
        consummation of the transaction contemplated hereby;

       

      (w) enter
        into any transaction with or distribute or advance any assets or property
        to any
        of its officers, directors, partners, shareholders or other affiliates (other
        than payment of salary and benefits in the ordinary course of business
        consistent with past practice);

       

      (x) enter
        into any Company Contract to the extent consummation of the transactions
        contemplated by this Agreement or compliance by the Company with the provisions
        of this Agreement would reasonably be expected to conflict with, or result
        in a
        violation or breach of, or default (with or without notice, lapse of time
        or
        both) under, or give rise to a right of, or result in, termination, cancellation
        or acceleration of any obligation or to the loss of a benefit under, or result
        in the creation of any Lien in or upon any of the properties or other assets
        of
        the Company under, or give rise to any increased, additional, accelerated,
        or
        guaranteed right or entitlements of any third party under, or result in any
        alteration of, any provision of such Company Contract; or

       

      (y) agree
        in
        writing or otherwise agree, commit or resolve to take any of the actions
        described in Section 5.1 (a) through (x) above.

       

      


      
        
          
            
            

          

          
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      ARTICLE
        VI 

       

      ADDITIONAL
        AGREEMENTS

       

      Section
        6.1 Proxy
        Statement; Parent Stockholders’ Meeting.
        (a) As
        promptly as practicable after the execution of this Agreement, the Parent
        will
        prepare and file the Proxy Statement with the Securities and Exchange Commission
        (the “SEC”).
        The
        Parent will respond to any comments of the SEC and the Parent will use its
        commercially reasonable efforts to mail the Proxy Statement to its stockholders
        at the earliest practicable time. As promptly as practicable after the execution
        of this Agreement, the Company and the Parent will prepare and file any other
        filings required under the Securities Exchange Act of 1934 (the “Exchange
        Act”),
        the
        Securities Act of 1933 (the “Securities
        Act”)
        or any
        other Federal, foreign or Blue Sky laws relating to the Transaction,
        (collectively, the “Other
        Filings”).
        Each
        party will notify the other party promptly upon the receipt of any comments
        from
        the SEC or its staff and of any request by the SEC or its staff or any other
        governmental officials for amendments or supplements to the Proxy Statement
        or
        any Other Filing or for additional information and will supply the other
        party
        with copies of all correspondence between such party or any of its
        representatives, on the one hand, and the SEC, or its staff or other government
        officials, on the other hand, with respect to the Proxy Statement, the
        Transaction or any Other Filing. The Proxy Statement and the Other Filings
        will
        comply in all material respects with all applicable requirements of law and
        the
        rules and regulations promulgated thereunder. Whenever any event occurs which
        is
        required to be set forth in an amendment or supplement to the Proxy Statement
        or
        any Other Filing, the Company or the Parent, as the case may be, will promptly
        inform the other party of such occurrence and cooperate in filing with the
        SEC
        or its staff or any other government officials, and/or mailing to shareholders
        of the Company and the Parent, such amendment or supplement. The proxy materials
        will be sent to the stockholders of the Parent for the purpose of soliciting
        proxies from holders of the Parent Common Stock to vote in favor of (i) the
        adoption of this Agreement and the approval of the Transaction (“Parent
        Stockholder Approval”);
        (ii)
        the issuance and sale of shares of the Parent Common Stock to the extent
        that
        such issuance requires shareholder approval, and (iii) the adoption of a
        stock
        incentive plan (the “Parent
        Plan”)
        at the
        Parent Stockholders’ Meeting. Such proxy materials shall be in the form of a
        proxy statement to be used for the purpose of soliciting such proxies from
        holders of Parent Common Stock. The Parent covenants to, within a reasonable
        time following the Closing, amend the certificate of incorporation of the
        Parent
        to change the Parent’s name to “Oregano’s Pizza Bistro, Inc.” or such similar
        available name as recommended by management of the Parent following the
        Closing.

       

      (b) As
        soon
        as practicable following its approval by the SEC, the Parent shall distribute
        the Proxy Statement to the holders of Parent Common Stock and, pursuant thereto,
        shall call the Parent Stockholders’ Meeting in accordance with the Delaware
        General Corporation Law and, subject to the other provisions of this Agreement,
        solicit proxies from such holders to vote in favor of the adoption of this
        Agreement and the approval of the First Merger and the other matters presented
        to the stockholders of the Parent for approval or adoption at the Parent
        Stockholders’ Meeting, including, without limitation, the matters described
        Section 6.1(a).

       

      


      
        
          
            
            

          

          
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      (c) The
        Parent shall comply with all applicable provisions of and rules under the
        Exchange Act and all applicable provisions of the Delaware General Corporation
        Law in the preparation, filing and distribution of the Proxy Statement, the
        solicitation of proxies thereunder, and the calling and holding of the Parent
        Stockholders’ Meeting. Without limiting the foregoing, the Parent shall ensure
        that the Proxy Statement does not, as of the date on which it is distributed
        to
        the holders of the Parent Common Stock, and as of the date of the Parent
        Stockholders’ Meeting, contain any untrue statement of a material fact or omit
        to state a material fact necessary in order to make the statements made,
        in
        light of the circumstances under which they were made, not misleading (provided
        that the Parent shall not be responsible for the accuracy or completeness
        of any
        information relating to the Company or any other information furnished by
        the
        Company for inclusion in the Proxy Statement). The Company represents and
        warrants that the information relating to the Company supplied by the Company
        for inclusion in the Proxy Statement will not as of date of its distribution
        to
        the holders of Parent Common Stock (or any amendment or supplement thereto)
        or
        at the time of the Parent Stockholders’ Meeting contain any statement which, at
        such time and in light of the circumstances under which it is made, is false
        or
        misleading with respect to any material fact, or omits to state any material
        fact required to be stated therein or necessary in order to make the statement
        therein not false or misleading.

       

      (d) The
        Parent, acting through its board of directors, shall include in the Proxy
        Statement the recommendation of its board of directors that the holders of
        Parent Common Stock vote in favor of the adoption of this Agreement and the
        approval of the First Merger and the Second Merger, and shall otherwise use
        commercially reasonable efforts to obtain the Parent Stockholder
        Approval.

       

      Section
        6.2 Certain
        Matters.
        Russell
        and the Company agree to use their best efforts to cause or cause to be taken
        all actions necessary on or before the Closing to enter into and deliver
        any
        agreement or other instruments and documents necessary to effect the transfer
        of
        the Real Property (as defined in the Real Estate Agreement) identified on
        Schedule
        6.2
        hereto
        (the “Transferred
        Property”)
        to
        City Surf Management Group, LLC. 

       

      Section
        6.3 Other
        Actions.
        (a) At
        least five (5) days prior to Closing, the Parent shall prepare a draft Form
        8-K
        announcing the Closing, together with, or incorporating by reference, the
        financial statements prepared by the Company and its accountant, and such
        other
        information that may be required to be disclosed with respect to the Transaction
        in any report or form to be filed with the SEC (“Merger
        Form 8-K”),
        which
        shall be in a form reasonably acceptable to the Company and in a format
        acceptable for EDGAR filing. Prior to Closing, the Parent and the Company
        shall
        prepare the press release announcing the consummation of the First Merger
        hereunder (“Press
        Release”).
        Simultaneously with the Closing, the Parent shall file the Merger Form 8-K
        with
        the SEC and distribute the Press Release.

       

      


      
        
          
            
            

          

          
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      (b) The
        Company and the Parent shall further cooperate with each other and use their
        respective reasonable best efforts to take or cause to be taken all actions,
        and
        do or cause to be done all things, necessary, proper or advisable on its
        part
        under this Agreement and applicable laws to consummate the Transaction and
        the
        other transactions contemplated hereby as soon as practicable, including
        preparing and filing as soon as practicable all documentation to effect all
        necessary notices, reports and other filings and to obtain as soon as
        practicable all consents, registrations, approvals, permits and authorizations
        necessary or advisable to be obtained from any third party (including the
        respective independent accountants of the Company and the Parent) and/or
        any
        Governmental Entity in order to consummate the Transaction or any of the
        other
        transactions contemplated hereby. This obligation shall include, on the part
        of
        the Parent, sending a termination letter to Continental in substantially
        the
        form of Exhibit A attached to the Investment Management Trust Agreement by
        and
        between the Parent and Continental dated as of December 15, 2006.  Subject
        to applicable laws relating to the exchange of information and the preservation
        of any applicable attorney-client privilege, work-product doctrine, self-audit
        privilege or other similar privilege, each of the Company and the Parent
        shall
        have the right to review and comment on in advance, and to the extent
        practicable each will consult the other on, all the information relating
        to such
        party that appears in any filing made with, or written materials submitted
        to,
        any third party and/or any Governmental Entity in connection with the First
        Merger and the other transactions contemplated hereby. In exercising the
        foregoing right, each of the Company and the Parent shall act reasonably
        and as
        promptly as practicable.

       

      Section
        6.4 Required
        Information.
        In
        connection with the preparation of the Merger Form 8-K and Press Release,
        and
        for such other reasonable purposes, the Company and the Parent each shall,
        upon
        request by the other, furnish the other with all information concerning
        themselves, their respective directors, officers and shareholders (including
        the
        directors of the Parent and the Company to be elected effective as of the
        Closing) and such other matters as may be reasonably necessary or advisable
        in
        connection with the Transaction, or any other statement, filing, notice or
        application made by or on behalf of the Company and the Parent to any third
        party and/or any Governmental Entity in connection with the Transaction and
        the
        other transactions contemplated hereby. Each party warrants and represents
        to
        the other party that all such information shall be true and correct in all
        material respects and will not contain any untrue statement of a material
        fact
        or omit to state a material fact required to be stated therein or necessary
        to
        make the statements contained therein, in light of the circumstances under
        which
        they were made, not misleading.

       

      Section
        6.5 Confidentiality;
        Access to Information.
        (a)
Confidentiality.
        Any
        confidentiality agreement previously executed by the parties shall be superseded
        in its entirety by the provisions of this Agreement. Each party hereto agrees
        to
        maintain in confidence any non-public information received from the other
        party,
        and to use such non-public information only for purposes of consummating
        the
        transactions contemplated by this Agreement. Such confidentiality obligations
        will not apply to (i) information which was known to the one party or their
        respective agents prior to receipt from the other party; (ii) information
        which
        is or becomes generally known; (iii) information acquired by a party or their
        respective agents from a third party who was not bound to an obligation of
        confidentiality; and (iv) disclosure required by law. In the event this
        Agreement is terminated as provided in Article IX hereof, each party (i)
        will
        return or cause to be returned to the other all documents and other material
        obtained from the other in connection with the Transaction, and (ii) will
        use
        its commercially reasonable efforts to delete from its computer systems all
        documents and other material obtained from the other in connection with the
        Transaction contemplated hereby.

       

      


      
        
          
            
            

          

          
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      (b) Access
        to Information.
        Company
        will afford the Parent and its financial advisors, accountants, counsel and
        other representatives reasonable access during normal business hours, upon
        reasonable notice, to the properties, books, records and personnel of the
        Company during the period prior to the Closing to obtain all information
        concerning the business, including the status of product development efforts,
        properties, results of operations and personnel of the Company, as the Parent
        may reasonably request. No information or knowledge obtained by the Parent
        in
        any investigation pursuant to this Section 6.5 will affect or be deemed to
        modify any representation or warranty contained herein or the conditions
        to the
        obligations of the parties to consummate the Transaction.

       

      Section
        6.6 Public
        Disclosure.
        From
        the date of this Agreement until Closing or termination, the parties shall
        cooperate in good faith to jointly prepare all press releases and public
        announcements pertaining to this Agreement and the transactions governed
        by it,
        and no party shall issue or otherwise make any public announcement or
        communication pertaining to this Agreement or the transaction without the
        prior
        consent of the Parent (in the case of the Company) or the Company (in the
        case
        of the Parent), except as required by any Legal Requirement or by the rules
        and
        regulations of, or pursuant to any agreement of a stock exchange or trading
        system. Each party will not unreasonably withhold approval from the others
        with
        respect to any press release or public announcement. If any party determines
        with the advice of counsel that it is required to make this Agreement and
        the
        terms of the transaction public or otherwise issue a press release or make
        public disclosure with respect thereto, it shall, at a reasonable time before
        making any public disclosure, consult with the other party regarding such
        disclosure, seek such confidential treatment for such terms or portions of
        this
        Agreement or the transaction as may be reasonably requested by the other
        party
        and disclose only such information as is legally compelled to be disclosed.
        This
        provision will not apply to communications by any party to its counsel,
        accountants and other professional advisors. Notwithstanding the foregoing,
        the
        parties hereto agree that as promptly as practicable after the execution
        of this
        Agreement, the Parent will file with the SEC a Current Report on Form 8-K
        pursuant to the Exchange Act to report the execution of this Agreement with
        respect to which the Company may review and comment upon prior to filing
        and
        that any language included in such Current Report shall be deemed to have
        been
        approved by the Company and may be filed with SEC and used in other filings
        made
        by the Parent with the SEC.

       

      


      
        
          
            
            

          

          
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      Section
        6.7 Commercially
        Reasonable Efforts.
        Upon
        the terms and subject to the conditions set forth in this Agreement, each
        of the
        parties agrees to use its commercially reasonable efforts to take, or cause
        to
        be taken, all actions, and to do, or cause to be done, and to assist and
        cooperate with the other parties in doing, all things necessary, proper or
        advisable to consummate and make effective, in the most expeditious manner
        practicable, the First Merger and the other transactions contemplated by
        this
        Agreement, including using commercially reasonable efforts to accomplish
        the
        following: (i) the taking of all reasonable acts necessary to cause the
        conditions precedent set forth in Article VII to be satisfied, (ii) the
        obtaining of all necessary actions, waivers, consents, approvals, orders
        and
        authorizations from Governmental Entities and the making of all necessary
        registrations, declarations and filings (including registrations, declarations
        and filings with Governmental Entities, if any) and the taking of all reasonable
        steps as may be necessary to avoid any suit, claim, action, investigation
        or
        proceeding by any Governmental Entity, (iii) the obtaining of all consents,
        approvals or waivers from third parties required as a result of the transactions
        contemplated in this Agreement, (iv) the defending of any suits, claims,
        actions, investigations or proceedings, whether judicial or administrative,
        challenging this Agreement or the consummation of the transactions contemplated
        hereby, including seeking to have any stay or temporary restraining order
        entered by any court or other Governmental Entity vacated or reversed and
        (v)
        the execution or delivery of any additional instruments reasonably necessary
        to
        consummate the transactions contemplated by, and to fully carry out the purposes
        of, this Agreement. In connection with and without limiting the foregoing,
        the
        Parent and its board of directors and the Company and its board of directors
        shall, if any state takeover statute or similar statute or regulation is
        or
        becomes applicable to the Transaction, this Agreement or any of the transactions
        contemplated by this Agreement, use its commercially reasonable efforts to
        enable the First Merger and the other transactions contemplated by this
        Agreement to be consummated as promptly as practicable on the terms contemplated
        by this Agreement. Notwithstanding anything herein to the contrary, nothing
        in
        this Agreement shall be deemed to require the Parent or the Company to agree
        to
        any divestiture by itself or any of its affiliates of shares of capital stock
        or
        of any business, assets or property, or the imposition of any material
        limitation on the ability of any of them to conduct their business or to
        own or
        exercise control of such assets, properties and stock.

       

      Section
        6.8 No
        Securities Transactions.
        Neither
        Russell, the Company nor any of their affiliates, directly or indirectly,
        shall
        engage in any transactions involving the securities of the Parent prior to
        the
        time of the making of a public announcement of the transactions contemplated
        by
        this Agreement. The Company shall use its best efforts to require each of
        its
        officers, directors, employees, agents, representatives and shareholders
        to
        comply with the foregoing requirement.

       

      Section
        6.9 Certain
        Claims.
        As
        additional consideration for the issuance of the Total
         Merger
        Consideration pursuant to this Agreement, except as set forth in Schedule
        6.9
        hereto,
        Russell hereby releases and forever discharges, effective as of the Closing
        Date, the Company and its directors, officers, employees and agents, from
        any
        and all rights, claims, demands, judgments, obligations, liabilities and
        damages, whether accrued or unaccrued, asserted or unasserted, and whether
        known
        or unknown arising out of or resulting from Russell’s (i) status as a holder of
        an equity interest in the Company; and (ii) employment, service, consulting
        or
        other similar agreement entered into with the Company prior to Closing, to
        the
        extent that the bases for claims under any such agreement that survives the
        Closing arise prior to the Closing, provided, however, the foregoing shall
        not
        release any obligations of the Parent set forth in this Agreement.

       

      


      
        
          
            
            

          

          
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      Section
        6.10 No
        Solicitation.
        The
        Company shall not, and shall direct each of its respective affiliates, officers,
        employees, representatives or agents not to, directly or indirectly, encourage,
        solicit, initiate or engage in discussions or negotiations with, or provide
        any
        non-public information to, any Person concerning any merger, sale of substantial
        assets, sale of shares of capital stock or similar transactions involving
        the
        Company or enter into any agreement with respect thereto. The Company will
        promptly communicate to the Parent the terms of any proposal which it may
        receive in respect of all such transactions prohibited by the
        foregoing.

       

      Section
        6.11 Benefit
        Arrangements.
        The
        Parent agrees that all employees of the Company who continue employment with
        the
        Parent or any subsidiary of the Parent after the Effective Time (“Continuing
        Employees”)
        shall
        be eligible to continue to participate in the Company’s health, vacation,
        welfare and retirement benefit plans; provided, however, that (i) nothing
        in
        this Section 6.11 or elsewhere in this Agreement shall limit the right of
        the
        Parent to amend or terminate any such benefit plan or arrangement at any
        time;
        and (ii) if the Parent terminates any such plan, then (upon expiration of
        any
        appropriate transition period), the Continuing Employees shall be eligible
        to
        participate in the Parent’s benefit plans and vacation policies, in each case to
        the same extent as employees of the Parent in similar positions and at
        compensation grade levels. Continuing Employees shall receive credit for
        service
        time as an employee of the Company for purposes of eligibility to participate,
        vesting, and eligibility to receive benefits under any such Parent benefit
        plan
        and for purposes of vacation accrual for service accrued or deemed accrued
        prior
        to the Effective Time. Additionally, any life, health and disability benefits
        available to Continuing Employees and their eligible dependents under the
        Parent’s benefit plans shall not be subject to any insurability requirement or
        pre-existing condition exclusion that would not apply to the corresponding
        benefit provided under a plan maintained by the Company immediately prior
        to the
        Effective Time. The Parent shall further provide each Continuing Employee
        with
        credit for any co-payments and deductibles paid prior to the Effective Time
        for
        the plan year in which the Effective Time occurs in satisfying any applicable
        deductibles or out-of-pocket requirements under corresponding Parent benefit
        plans. Nothing in this Section 6.11 or elsewhere in this Agreement, shall
        be
        construed to create a right in any employee to continuing
        employment.

       

      Section
        6.12 Company
        Actions.
        Russell
        and the Company shall use their best efforts to take such actions as are
        necessary to fulfill their respective obligations under this Agreement and
        to
        enable the Parent, Merger Sub and Oregano LLC to fulfill their obligations
        hereunder.

       

      Section
        6.13 Fees
        and Expenses.
        Whether
        or not the Closing is consummated, all costs and expenses incurred by the
        Parent
        in connection with this Agreement and the transactions contemplated by this
        Agreement shall be paid by the Parent and all costs and expenses incurred
        by the
        Company in connection with this Agreement, including the fees of and expenses
        of
        the Company’s legal counsel, accountants, other consultants or advisors and the
        transactions contemplated by this Agreement shall be paid by the Company
        or
        Russell; provided that the Company shall have no obligation to pay any such
        expenses after the Closing, and such expenses shall instead be obligations
        of
        and paid by Russell. 

       

      


      
        
          
            
            

          

          
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      Section
        6.14 Stock
        Incentive Plan.
        Prior
        to the Closing, the Parent agrees to use its commercially reasonable efforts
        to
        adopt and put in place the Parent Plan representing up to a ten percent (10%)
        ownership interest in the Parent (such agreement in form and substance
        reasonably satisfactory to each).

       

      Section
        6.15 Tax
        Matters.
        The
        following provisions (which shall take precedence over any other provision
        of
        this Agreement in the event of a conflict) shall govern the allocation of
        responsibility as among the Parent, Russell and the Company for certain Tax
        matters following the Closing Date:

       

      (a) Russell
        shall
        have responsibility for, and shall pay or cause to be paid when due any and
        all
        Taxes relating to the Company for or relating to any Tax period (or portion
        thereof) ending on or before the Closing Date. Russell
        shall
        timely prepare and file or cause to be prepared and filed all Tax Returns
        of the
        Company for all periods ending on or before the Closing Date and shall pay
        or
        cause to be paid the Taxes shown as due on such Tax Returns. Prior to the
        filing
        of any such Tax Return that was not filed before the Closing Date, Russell
        shall
        provide the Parent with a substantially final draft of such Tax Return at
        least
        15 business days prior to the due date for such Tax Return. The Parent shall
        notify Russell
        of any
        objections that the Parent may have to any items set forth in any such draft
        Tax
        Return, and the Parent and Russell
        shall
        agree to consult and resolve in good faith any such objection and to mutually
        consent to the filing of such Tax Return. Such Tax Returns shall be prepared
        or
        completed in a manner consistent with prior practice of the Company with
        respect
        to Tax Returns concerning the income, properties or operations of the Company,
        except as otherwise required by Legal Requirements or regulation or otherwise
        agreed to in writing by the Parent prior to the filing thereof.

       

      (b)
        The
        Parent shall have the exclusive right to represent the interests of the Company
        in any and all Tax audits, assessments or administrative or court proceedings
        relating to Tax Returns for taxable periods ending on or before the Closing
        Date; provided, however, that Russell
        shall
        have the right to participate in any such audit, assessment or proceeding
        and to
        employ counsel of his choice for purposes of such participation. In the event
        that the Parent proposes to compromise or settle any Tax claim, or consent
        or
        agree to any Tax liability, relating to the Company for any taxable period
        ending on or before the Closing Date, Russell
        shall
        have the right to review such proposed compromise, settlement, consent or
        agreement. Without the prior written consent of Russell, which shall not
        be
        unreasonably withheld or delayed, the Parent shall not agree or consent to
        compromise or settle any issue or claim arising in any such audit, assessment
        or
        proceeding, or otherwise agree to or consent to any Tax liability, to the
        extent
        that any such compromise, settlement, consent or agreement may affect the
        Tax
        liability of Russell
        or the
        Company for any period ending on or prior to Closing Date.

       

      (c) Russell
        agrees
        to promptly notify the Parent in writing upon receipt by Russell
        or any
        affiliate of Russell
        of
        notice of any pending or threatened Tax audits or assessments relating to
        the
        income, properties or operations of the Company.

       

      


      
        
          
            
            

          

          
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      (d) After
        the
        Closing Date, the Parent and Russell
        agree to
        provide each other with such cooperation and information relating to the
        Company
        as any other party may reasonably request in (i) filing any Tax Return, amended
        Tax Return or other Tax filing or claim for refund of Taxes, (ii) determining
        any Tax liability or right to refund of Taxes, (iii) conducting or defending
        any
        audit or other proceeding in respect of Taxes, or (iv) effectuating the terms
        of
        this Agreement. Notwithstanding the foregoing, no party shall be unreasonably
        required to prepare any document, or determine any information, not then
        in its
        possession in response to a request under this Section 6.15(d).

       

      (e) Russell
        shall be
        liable for, and shall pay when due, any transfer, gains, real estate transfer
        and transfer gains, documentary, sales, use, registration, stamp, value-added
        or
        other similar Taxes payable by reason of the transactions contemplated under
        this Agreement, and shall file all necessary returns, reports or other filings
        with respect to all such Taxes.

       

      (f) Russell
        shall deliver to the Parent on or before the Closing Date an affidavit in
        the
        form of Exhibit
        A
        to the
        effect that he is not a “foreign person” within the meaning of Code Section
        1445.

       

      Section
        6.16 Shareholder
        Approval.
        Russell
        shall deliver to the Parent on or before the date hereof the Shareholder
        Consent.

       

      Section
        6.17 No
        Claim Against Trust Fund.
        The
        Company and Russell acknowledge that the Parent has established the Trust
        Fund
        for the benefit of the Parent’s stockholders and that the Parent may disburse
        monies from the Trust Fund only (a) to the Parent’s stockholders in the event
        they elect to convert their shares into cash in accordance with the Parent’s
        Charter Documents; or (b) to the Parent after it consummates a business
        combination, as set forth in the Parent’s prospectus dated December 15, 2006 and
        filed with the SEC (the “Prospectus”).
        The
        Company and Russell
        acknowledge that if the transactions contemplated by this Agreement are not
        consummated by the Parent by December 20, 2008 (provided that the Termination
        Date has not been extended to January 15, 2009), the Parent will be obligated
        to
        return to its stockholders the amounts being held in the Trust Fund.
        Accordingly, the Company and its affiliates, directors, officers, employees
        and
        representatives, and Russell (collectively, the “Company
        Claimants”),
        hereby irrevocably waive all rights, title, interest, or claim of any kind
        in or
        to the Trust Fund and any monies in the Trust Fund notwithstanding any amounts
        that may be owed to them by the Parent, Merger Sub or Oregano LLC for any
        reason
        whatsoever, including but not limited to breach of this Agreement by the
        Parent
        or any negotiations, agreements or understandings with the Parent, Merger
        Sub or
        Oregano LLC (whether in the past, present or future), and will not seek recourse
        against the Trust Fund or any Non-Recourse Person at any time for any reason
        whatsoever. The Company agrees to indemnify, defend and hold harmless the
        Parent, Merger Sub, Oregano LLC and each Non-Recourse Person from any and
        all
        losses, claims or damages (including, without limitation, attorney’s fees and
        expenses and costs of investigation) arising from any breach of the foregoing
        provisions. This section will survive this Agreement and will not expire
        and
        will not be altered in any way without the express written consent of the
        parties hereto. 

       

      


      
        
          
            
            

          

          
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      Section
        6.18 Parent
        Common Stock Lockup.
        Russell
        agrees that he will not during the period commencing on the date hereof and
        ending on the date one hundred eighty (180) days following the Closing Date:
        (i) lend; offer; pledge; sell; contract to sell; sell any option or
        contract to purchase; purchase any option or contract to sell; grant any
        option,
        right, or warrant to purchase; or otherwise transfer or dispose of, directly
        or
        indirectly, any shares of Parent Common Stock or any securities convertible
        into
        or exercisable or exchangeable (directly or indirectly) for Parent Common
        Stock
        or (ii) enter into any swap or other arrangement that transfers to another,
        in whole or in part, any of the economic consequences of ownership of such
        securities, whether any such transaction described in clause (i) or (ii)
        above is to be settled by delivery of Parent Common Stock or other securities,
        in cash, or otherwise. 

       

      Section
        6.19 Audited
        Financials(a) The
        Company shall provide to the Parent prior to Closing a correct and complete
        copy
        of the audited consolidated financial statements (including any related notes
        thereto) of the Company for the fiscal years ended December 31, 2006 and
        2007
        (the “Audited
        Financial Statements”).
        Each
        of Russell and the Company represent and warrant that the Audited Financial
        Statements will be prepared in accordance with U.S. GAAP applied on a consistent
        basis throughout the periods involved (except as may be indicated in the
        notes
        thereto), and each fairly presents in all material respects the financial
        position of the Company at the respective dates thereof and the results of
        its
        operations and cash flows for the periods indicated in accordance with U.S.
        GAAP.

       

      (b)
        Except as otherwise noted in the Audited Financial Statements, each of Russell
        and the Company represent and warrant that the accounts and notes receivable
        of
        the Company reflected on the balance sheets included in the Unaudited Financial
        Statements (i) arose from bona fide transactions in the ordinary course of
        business and are payable on ordinary trade terms; (ii) are legal, valid and
        binding obligations of the respective debtors enforceable in accordance with
        their terms, except as such may be limited by bankruptcy, insolvency,
        reorganization, or other similar laws affecting creditors’ rights generally, and
        by general equitable principles; (iii) are not subject to any valid set-off
        or
        counterclaim except to the extent set forth in such balance sheet contained
        therein; and (iv) are not the subject of any actions or proceedings brought
        by
        or on behalf of the Company.

       

      Section
        6.20 Company
        Liabilities.
        After
        the Closing Date, the Company agrees to pay its debts and liabilities
        immediately when due and payable.

       

      ARTICLE
        VII 

       

      CONDITIONS
        TO THE FIRST MERGER

       

      Section
        7.1 Conditions
        to Obligations of Each Party to Effect the First Merger.
        The
        obligations of the parties hereto to consummate the First Merger shall be
        subject to the satisfaction or waiver of the following conditions at or prior
        to
        the Closing Date:

       

      


      
        
          
            
            

          

          
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      (a) Regulatory
        Consent.
        All
        filings required to be made prior to the Closing by the Company, the Parent
        or
        Russell, and all consents, approvals and authorizations required to be obtained
        prior to the Closing by the Company, the Parent or any shareholders of the
        Company, from any Governmental Entity (collectively,“Governmental
        Consents”)
        in
        connection with the execution and delivery of this Agreement and the
        consummation of the transactions contemplated hereby by the Company, the
        Parent
        or Russell shall have been made or obtained (as the case may be). 

       

      (b) No
        Order.
        No
        Governmental Entity of competent jurisdiction shall have enacted, issued,
        promulgated, enforced or entered any statute, rule, regulation, executive
        order,
        decree, injunction or other order (whether temporary, preliminary or permanent)
        which (i) is in effect and (ii) has the effect of making the transactions
        contemplated hereby illegal or otherwise prohibiting consummation of the
        transactions contemplated hereby.

       

      (c) Governmental
        Restrictions.
        There
        shall not be any pending or threatened suit, action or proceeding asserted
        by
        any Governmental Entity challenging or seeking to restrain or prohibit the
        consummation of the transactions contemplated by this Agreement, the effect
        of
        which restraint or prohibition if obtained would cause the condition set
        forth
        in Section 7.1(b) to not be satisfied.

       

      (d) Parent
        Stockholder Approval.
        The
        Parent Stockholder Approval shall have been duly approved and adopted by
        the
        stockholders of the Parent by the requisite vote under the laws of the State
        of
        Delaware and the Parent Charter Documents and an executed copy of an amendment
        to the Parent’s certificate of incorporation shall have been filed with the
        Secretary of State of the State of Delaware to be effective as of the Closing.
        

       

      Section
        7.2 Additional
        Conditions to Obligations of Russell and the Company.
        The
        obligations of Russell and the Company to consummate and effect the Merger
        shall
        be subject to the satisfaction at or prior to the Closing Date of each of
        the
        following conditions, any of which may be waived, in writing, exclusively
        by the
        Company:

       

      (a) Representations
        and Warranties.
        The
        representations and warranties of the Parent, Merger Sub and Oregano LLC
        set
        forth in this Agreement shall be true and correct in all material respects
        (except for those representations and warranties which have already been
        qualified with respect to materiality and therefore shall be true and correct
        in
        all respects) as of the date hereof and as of the Closing Date, as if such
        representations and warranties were made as of the date hereof and as of
        the
        Closing Date (except as to any such representation or warranty which speaks
        as
        of a specific date, which must be true and correct as of such specific date)
        and
        the Company shall have received a certificate signed on behalf of the Parent
        by
        an authorized officer of the Parent to such effect (“Parent
        Closing Certificate”).

       

      (b) Agreements
        and Covenants.
        Each of
        the Parent, Merger Sub, and Oregano LLC shall have performed or complied
        in all
        material respects with all agreements and covenants required by this Agreement
        to be performed or complied with by it on or prior to the Closing Date, and
        the
        Parent Closing Certificate shall include a provision to such
        effect.

       

      


      
        
          
            
            

          

          
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      (c) Real
        Estate Purchase Agreement.
        The
        transactions contemplated by the Real Estate Purchase Agreement shall have
        closed (or will close simultaneous with this Agreement).

       

      (d) Registration
        Rights Agreement.
        The
        Parent shall have delivered to Russell a duly executed Registration Rights
        Agreement substantially in the form set forth in Exhibit
        B
        to this
        Agreement.

      


       

      Section
        7.3 
        Additional Conditions to the Obligations of the Parent and Merger Sub
.
        The
        obligations of the Parent and Merger Sub to consummate and effect the First
        Merger shall be subject to the satisfaction at or prior to the Closing Date
        of
        each of the following conditions, any of which may be waived, in writing,
        exclusively by the Parent:

       

      (a) Representations
        and Warranties.
        The
        representations and warranties of Russell and the Company shall be true and
        correct in all material respects (except for those representations and
        warranties which have already been qualified with respect to materiality
        and
        which shall be true and correct in all respects) as of the date hereof and
        as of
        the Closing Date, as if such representations and warranties were made as
        of the
        date hereof and as of the Closing Date (except as to any such representation
        or
        warranty which speaks as of a specific date, which must be true and correct
        as
        of such specific date) and the Parent shall have received a certificate signed
        by Russell and the Company to such effect.
        (“Company
        Closing Certificate”).

       

      (b) Agreements
        and Covenants.
        Russell
        and the Company shall have performed or complied in all material respects
        with
        all agreements and covenants required by this Agreement to be performed or
        complied with by it at or prior to the Closing Date
        and the
        Company Closing Certificate shall include a provision to such
        effect.

       

      (c) [Reserved].
        

       

      (d) Consents.
        The
        Company shall have obtained all consents, waivers, permits and approvals
        required to be obtained by the Company in connection with the consummation
        of
        the transactions contemplated hereby, other than consents, waivers and approvals
        the absence of which, either alone or in the aggregate, could not reasonably
        be
        expected to have a Material Adverse Effect on the Company and the Company
        Closing Certificate shall include a provision to such effect.

       

      (e) Material
        Adverse Effect.
        No
        Material Adverse Effect with respect to the Company shall have occurred since
        the date of this Agreement.

       

      (f) Financial
        Statements.
        The
        Company shall have delivered to the Parent the Audited Financial
        Statements.

       

      


      
        
          
            
            

          

          
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      (g) Resignations.
        The
        individuals listed on Schedule
        7.3(g)
        hereto
        shall have resigned their respective positions and offices.

       

      (h) Shareholder
        Approval.
        The
        Company shall have obtained the Shareholder Approval.

       

      (i) Shareholder
        List.
        The
        Company shall have delivered to the Parent, as of the Closing Date, a true
        and
        complete list of all holders of Company Common Stock and any other rights
        to
        purchase Company Common Stock as of the Closing Date including the number
        of
        shares held at the Closing Date by each such holder and the address of each
        such
        holder certified by the Secretary of the Company.

       

      (j) Non-Competition
        Agreement.
        Russell
        shall have delivered to the Parent a duly executed Non-Competition Agreement,
        and such Non-Competition Agreement shall not have been revoked.

       

      (k) Parent
        Common Stock.
        Holders
        of twenty percent (20%) or more of the shares of Parent Common Stock issued
        in
        the Parent’s initial public offering of securities and outstanding immediately
        before the Closing shall not have exercised their rights to convert their
        shares
        into a pro rata share of the Trust Fund in accordance with the Parent’s Charter
        Documents.

       

      (l) GE
        Financing.
        The
        Parent’s financing of the transactions contemplated hereby shall have been
        funded in the amount of $5,000,000.

       

      (m) Pay-off
        Letters.
        The
        Parent shall have received customary pay-off letters from the holders of
        the
        Total Indebtedness, in form and substance reasonably acceptable to the
        Parent.

       

      (n) Charter
        Documents.
        The
        Company shall have delivered to the Parent (i) a certified copy of the Charter
        Documents of the Company certified by the
        appropriate authority
        as of a
        date as near as practicable to the Closing Date; (ii) a copy of the by-laws
        of the Company as in effect on the Closing Date, certified by the Secretary
        or
        Assistant Secretary of the Company; (iii) a certificate of good standing
        with
        respect the Company issued by the appropriate government officials of its
        jurisdiction of incorporation and, in respect of the Company, of each
        jurisdiction in which the Company carries on its business as listed on
Schedule
        3.1(b)
        and (iv)
        the original minute and stock books of the Company. 

       

      (o) Evidence
        of Termination of Certain Agreements.
        The
        Company and Russell shall have delivered to the Parent evidence satisfactory
        to
        the Parent that the agreements set forth in Schedule
        7.3(o)
        have
        been terminated.

       

      (p) Real
        Estate Purchase Agreement.
        The
        transactions contemplated by the Real Estate Purchase Agreement shall have
        closed (or will close simultaneous with this Agreement).

       

      


      
        
          
            
            

          

          
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      (q) Transferred
        Property.
        Russell
        and the Company shall have delivered to the Parent each of the agreements
        and
        instruments effecting the transfer of the Transferred Property to City Surf
        Management Group, LLC (the “Transfer
        Documents”).
        

       

      (r) Estoppel
        Certificates.
        The
        Company shall have delivered to the Parent all of the Estoppel Certificates
        with
        respect to each Company Lease.

      


      (s) Tax
        Audits.
        Any and
        all Tax audits, assessments or administrative or court proceedings relating
        to
        Tax Returns for taxable periods (or any portion thereof) ending on or before
        the
        Closing Date shall have been finally determined. 


       

      ARTICLE
        VIII 

       

      INDEMNIFICATION

       

      Section
        8.1 Indemnification.
        (a)
Indemnification
        by Russell.
        Subject
        to the limits set forth in this Section 8.1, from and after the Closing,
        Russell
        shall indemnify, defend and hold the Parent, its affiliates (including, after
        the Effective Time, the Company) and their respective officers, directors,
        shareholders, employees, agents and representatives (the “Parent
        Indemnified Persons”)
        harmless from and in respect of any and all claims, causes of action, suits
        (whether arising in contract, tort or otherwise) losses, damages, costs and
        reasonable expenses (including reasonable fees and expenses of counsel including
        both those incurred in connection with the defense or prosecution of the
        indemnifiable claim and those incurred in connection with the successful
        enforcement of this provision, whether or not related to a Third Party Claim)
        (collectively, “Losses”),
        that
        they may incur arising out of or due to:

       

      (i) the
        inaccuracy or breach of any representation or warranty of the Company or
        Russell
        contained in Article III or 6.19 of this Agreement, or any certificate delivered
        by the Company or Russell to the Parent pursuant to this Agreement in connection
        with the Closing;

       

      (ii) the
        non-fulfillment or breach of any covenant or agreement of the Company or
        Russell
        contained in this Agreement ; 

       

      (iii) liabilities
        of Russell or the Company for any broker’s or finder’s fees or other fees and
        expenses, including, but not limited to, legal fees and expenses incurred
        by the
        Company or Russell in connection with the transactions contemplated by this
        Agreement and not paid by the Company prior to the Closing; 

       

      (iv) the
        non-fulfillment or breach of any covenant, agreement or representation and
        warranty of Russell or City Surf Management Group, LLC contained in the Real
        Estate Purchase Agreement; 

       

      (v) 
        Taxes of
        the Company with respect to all taxable periods ending on or prior to the
        date
        of the Closing;

       

      


      
        
          
            
            

          

          
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      (vi) 
        with
        respect to any Straddle Period, the portion of Taxes payable by or assessed
        against the Company which are properly allocated to the part of such Straddle
        Period ending on the date of the Closing; 

       

      (vii) 
        Taxes
        arising out of any transactions entered into in connection with or pursuant
        to
        this Agreement; 

       

      (viii) liabilities
        of Russell or the Company related to the 126 Group, LLC; 

       

      (ix) 
        liabilities of Russell or the Company related to oral arrangements listed
        on
Schedule
        8.1(a)(ix);
        and

       

      (x) 
        any Tax
        liabilities of Russell arising out of or related to Russell's ownership interest
        in any Person.

       

      For
        purposes of this Agreement, “Straddle
        Period”
means
        any taxable year or period beginning before and ending after the date of
        the
        Closing, and with respect to any Straddle Period, an allocation of Taxes
        shall
        be made to the part of such Straddle Period which ends on the date of the
        Closing based on (i) the closing of the book method, in the case of income
        Taxes, (ii) the number of days elapsed between the beginning of such Straddle
        Period to and including the date of the Closing in the case of property Taxes,
        and (iii) when the relevant transaction occurs, in the case of sales and
        gross
        receipts Taxes. 

       

      (b) Indemnification
        by the Parent.
        Subject
        to the limits set forth in this Section 8.1, from and after the Closing,
        the
        Parent agrees to indemnify, defend and hold Russell and his affiliates and
        their
        respective officers, directors, shareholders, employees, agents and
        representatives (the “Seller
        Indemnified Persons”)
        harmless from and in respect of any and all Losses that they may incur arising
        out of or due to:

       

      (i) the
        inaccuracy or breach of any representation or warranty of the Parent or Merger
        Sub contained in Article IV of this Agreement, or any certificate delivered
        by
        the Parent to the Company pursuant to this Agreement in connection with the
        Closing;

       

      (ii) the
        non-fulfillment or breach of any covenant or agreement of the Parent, Merger
        Sub
        or Oregano LLC contained in this Agreement; 

       

      (iii) the
        non-fulfillment or breach of any covenant, agreement or representation and
        warranty of Oregano’s Real Estate Holdings LLC contained in the Real Estate
        Purchase Agreement; and

       

      (iv) liabilities
        of the Parent, Merger Sub or Oregano LLC for any broker’s or finder’s fees or
        other fees and expenses.

       

      


      
        
          
            
            

          

          
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      (c) Certain
        Limitations.
        Anything in this Article VIII to the contrary notwithstanding:

       

      (i) Except
        in
        the case of fraud or intentional misrepresentation, no Losses shall be
        recoverable by the Parent Indemnified Persons pursuant to the provisions
        of
        Section 8.1(a)(i) or the Seller Indemnified Persons pursuant to the provisions
        of Section 8.1(b)(i), as the case may be, in respect of breaches of
        representations and warranties (other than the representations and warranties
        set forth in Sections 3.1, 3.3, 3.17, 3.19, 4.1 and 4.7) and no claim therefor
        shall be asserted for any purpose hereunder, unless and only to the extent
        that
        the amount of such Indemnified Party’s Losses equals or exceeds $100,000 (the
“Indemnity
        Deductible”)
        in the
        aggregate, in which case only Losses in excess of the Indemnity Deductible
        shall
        be recoverable.

       

      (ii) Except
        in
        the case of fraud or intentional misrepresentation, the aggregate of the
        sum of
        indemnification obligations of Russell (other than the representations and
        warranties set forth in Sections 3.3 and 3.17) pursuant to the provisions
        of
        Section 8.1(a)(i) or the Parent pursuant to the provisions of Section 8.1(b)(i)
        (other than the representations and warranties set forth in Sections 4.1
        and
        4.7), as the case may be, shall be limited to an amount equal to the Total
        Merger Consideration.

       

      (iii) The
        amount of any Losses
        by
Parent
        Indemnified Persons
        or
        Seller Indemnified
        Persons,
        as the
        case may be, shall
        be
        reduced by any insurance (after Taxes) which such party actually receives
        under
        insurance policies in effect immediately prior to the Closing in respect
        of or
        as a result of such Losses or the facts or circumstances relating thereto;
        provided, that each Indemnified Party agrees to diligently pursue any claims
        under such policies as may be available in respect of any Losses indemnified
        hereunder; provided, however, that no such Indemnified Party shall have an
        obligation or be required to commence litigation against any third party
        to
        recover such proceeds.

       

      (iv) None
        of
        the Parent Indemnified Persons or the Seller Indemnified Persons shall be
        entitled to recover from the respective other Party hereunder for the same
        Loss
        more than once. For the avoidance of doubt, except as set forth in Section
        8.1(c)(iv), in no event shall Russell be liable for any Losses hereunder
        and
        under the Real Estate Purchase Agreement in an aggregate amount in excess
        of the
        aggregate of the Total Merger Consideration and the Purchase Price (as defined
        in the Real Estate Purchase Agreement). 

       

      (v) Except
        in
        the case of fraud or intentional misrepresentation, the Company, the Parent,
        Merger Sub, Oregano LLC, the Parent Indemnified Persons and Seller Indemnified
        Persons agree that the sole and exclusive remedy for Losses for any matters
        relating to this Agreement (including the exhibits and Schedules to this
        Agreement), any certificate delivered pursuant hereto and the transactions
        contemplated hereby shall be the rights to indemnification set forth in this
        Article VIII;
        provided,
        however,
        that
        nothing contained herein shall limit any non-monetary equitable remedy of
        the
        Parent Indemnified Persons and Seller Indemnified Persons. Notwithstanding
        anything to the contrary contained herein, any indemnification obligation
        that
        becomes payable to any Buyer Indemnified Persons or Seller Indemnified Persons,
        as the case may be, pursuant to and in accordance with this Article VIII
        or
        Article IX of the Real Estate Purchase Agreement may be satisfied (at the
        option
        of the Indemnifying Party) in Parent Common Stock held by such Indemnifying
        Party, cash or any combination thereof. For
        the
        avoidance of doubt, the preceding sentence shall not otherwise limit claims
        against Russell. 

       

      


      
        
          
            
            

          

          
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      (vi) For
        the
        purpose of determining the value of the Parent Common Stock used to satisfy
        any
        indemnification claim by the Parent pursuant to and in accordance with this
        Article VII or Article IX of the Real Estate Purchase Agreement, the value
        of a
        share of Parent Common Stock shall be equal to the value used to calculate
        the
        Preliminary Parent Stock Consideration. 

       

      .

       

      (d) Survival
        Generally.
        Except
        as set out in Sections 8.1(e), (f), (h) and (i), liability
        for breaches of the representations and warranties of the parties hereto
        contained in this Agreement shall terminate upon the expiry of the period
        of
        twelve (12) months following the Closing Date, except:

       

      (i) in
        the
        case of fraud or intentional misrepresentation, in which case liability shall
        continue indefinitely; and

       

      (ii) to
        the
        extent that, during such period, the party hereto seeking indemnification
        shall
        have given notice to the other party hereto from which indemnification of
        a
        claim is sought in respect of any such representation, warranty or covenant,
        in
        which case liability for such representation, warranty or covenant shall
        continue in full force and effect until the final determination of such
        claim.

       

      (e) Tax
        Survival.
        The
        representations, warranties and covenants of the Russell and the Company
        relating to the Tax liability of the Company including, without limiting
        the
        generality of the foregoing, those set forth in Section 3.17 and Section
        6.15,
        continue in full force and effect for the benefit of the Parent until 90
        days
        after the expiration of the relevant statute of limitation for collection
        or
        assessment of Tax by a Governmental Entity.

       

      (f) Employee
        Benefits Survival.
        The
        representations and warranties of the of the Company set forth in Section
        3.11,
        continue in full force and effect for the benefit of the Parent until 90
        days
        after the expiration of the applicable statute of limitation
        period.

       

      (g) [Reserved]
        

       

      (h) Other
        Survival.
        The
        representations and warranties of the parties hereto set forth in Sections
        3.1,
        3.3, 3.19, 4.1 and 4.7, and
        the
        applicable parties’ liability in connection therewith shall survive
        indefinitely.

       

      


      
        
          
            
            

          

          
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      (i) Claims
        for indemnification.
        No
        party
        hereto or other Person shall be entitled to indemnification pursuant to this
        Agreement unless such party hereto or other Person has given written notice
        of
        its claim for indemnification within the survival periods specified in the
        foregoing provisions of this Section 8.1.

       

      (j) Notice
        and Opportunity to Defend.
        If
        there occurs an event which a party asserts is an indemnifiable event pursuant
        to Section 8.1(a) or 8.1(b), the party or parties seeking indemnification
        shall
        notify the other party or parties obligated to provide indemnification (the
        “Indemnifying
        Party”)
        promptly, but no later than ninety (90) days, after such Indemnifying Party
        receives written notice of any claim, event or matter as to which indemnity
        may
        be sought (a “Claim
        Notice”).
        Each
        Claim Notice shall contain a reasonable and good faith estimate of the Losses
        (each such estimate, a “Loss
        Estimate”)
        against which such Indemnified Party seeks indemnification, to the extent
        such
        an estimate can be made, a description, in reasonable detail, of each individual
        item of Loss, the date such item was paid or accrued, the basis for any
        anticipated liability and the nature of the misrepresentation, default, breach
        of warranty or breach of covenant or claim to which each such item is related
        and the computation of the amount to which such Indemnified Party claims
        to be
        entitled hereunder. The failure of the Indemnified Party to give notice as
        provided in this Section 8.1(j) shall not relieve any Indemnifying Party
        of its
        obligations under Section 8.1, except to the extent that such failure materially
        prejudices the rights of any such Indemnifying Party. In the event of any
        claim,
        action, suit, proceeding or demand asserted by any person who is not a party
        (or
        a successor to a party) to this Agreement (a “Third
        Party Claim”)
        which
        is or gives rise to an indemnification claim, the Indemnifying Party may
        elect
        within ten (10) days to acknowledge its obligations to indemnify the Indemnified
        Party therefor and to assume the defense of any such claim or any litigation
        resulting therefrom, provided that counsel for the Indemnifying Party, who
        shall
        conduct the defense of such claim or any litigation resulting therefrom,
        shall
        be approved by the Indemnified Party (whose approval shall not unreasonably
        be
        withheld), and the Indemnified Party may participate in such defense at the
        Indemnified Party’s expense, which shall include counsel of its choice; provided
        that the Indemnified Party shall have the right to employ, at the Indemnifying
        Party’s expense, one counsel of its choice in each applicable jurisdiction (if
        more than one jurisdiction is involved) to represent the Indemnified Party
        if,
        in the Indemnified Party’s reasonable judgment, there exists an actual or
        potential conflict of interest between the Indemnified Party and the
        Indemnifying Party or if the Indemnifying Party (i) elects not to defend,
        compromise or settle a Third-Party Claim, (ii) fails to notify the Indemnified
        Party within the required time period of its election as provided in this
        section, or (iii) having timely elected to defend a Third-Party Claim, fails,
        in
        the reasonable judgment of the Indemnified Party, after at least ten (10)
        days
        notice to the Indemnifying Party, to adequately prosecute or pursue such
        defense, and in each such case the Indemnified Party may defend such Third-Party
        Claim on behalf of and for the account and risk of the Indemnifying Party.
        The
        Indemnifying Party, in the defense of any such claim or litigation, shall
        not,
        except with the written consent of the Indemnified Party, consent to entry
        of
        any judgment or entry into any settlement which does not include as an
        unconditional term thereof the giving by the claimant or plaintiff to the
        Indemnified Party of a release from all liability in respect of such claim
        or
        litigation. The Indemnified Party shall not settle or compromise any such
        claim
        without prior written consent of the Indemnifying Party, which consent shall
        not
        be unreasonably withheld. The Indemnified Party shall furnish such information
        regarding itself or the claim in question as the Indemnifying Party may
        reasonably request in writing and as shall be reasonably required in connection
        with the defense of such claim and litigation resulting therefrom.

       

      


      
        
          
            
            

          

          
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      (k) No
        Shareholder shall have any right of contribution against the Company with
        respect to any breach by the Company of any of their representations,
        warranties, covenants or agreements and from and after the Closing, the Company
        shall have no obligation with respect to breaches of representations,
        warranties, covenants or agreements.

       

      (l) Any
        indemnification payment pursuant to this Article VIII (including any reduction
        to (i) the number of Total Holdback Shares issued to Russell and/or (ii)
        the
        Restaurant Earn-Out Amount) shall, to the maximum extent permitted by law,
        be
        treated as an adjustment to the Total Merger Consideration.

       

      Section
        8.2 Offset
        Rights.
        

       

      (a) Subject
        to the resolution provisions contained in Section 8.3, the Parent shall have
        the
        right to offset against the Total Holdback Shares and/or the Restaurant Earn-Out
        Amount for the amount of any indemnity claim of any Parent Indemnified Persons
        pursuant to this Article VIII. 

       

      (b) Neither
        the exercise nor the failure to exercise such right of setoff or to give
        a
        notice of claim will constitute an election of remedies or limit the Parent
        in
        any manner in the enforcement of any other remedies that may be available
        to
        it.

       

      Section
        8.3 Resolution
        of Claims.
        (a) In
        the event that any Indemnifying Party objects to the amount of any Loss claimed
        in any Claim Notice or disputes the Indemnifying Party’s liability therefor, the
        Indemnifying Party shall, prior to twenty (20) calendar days following the
        Indemnifying Party’s receipt of such Claim Notice (the “Response
        Date”),
        deliver to the Indemnified Party a written notice (a “Response
        Notice”)
        specifying in reasonable detail each amount set forth in such Claim Notice
        to
        which the Indemnifying Party objects and the nature and basis for each such
        objection. If the Indemnified Party shall not have received a Response Notice
        prior to the Response Date, the Indemnified Party and the Indemnifying Party
        shall be deemed to have agreed to the Claim Notice and to have acknowledged
        the
        correctness of the Losses claimed therein and the Indemnifying Party’s liability
        therefor. If the Indemnified Party shall have received a Response Notice
        prior
        to the Response Date, the Indemnifying Party and the Indemnified Party shall
        negotiate in good faith concerning the related Claim Notice and the Losses
        claimed and other matters set forth therein until such Claim Notice, Loss
        Estimate and matters shall have been finally determined. A Claim Notice,
        any
        Losses claimed therein and any other matters set forth therein shall be deemed
        to be “finally determined” for purposes of this Agreement when such Claim
        Notice, amounts and matters have been resolved (i) by a written agreement
        of the
        Indemnifying Party and the Indemnified Party, or (ii) by order of a court
        having
        jurisdiction.

       

      


      
        
          
            
            

          

          
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      ARTICLE
        IX 

       

      CLOSING
        AND TERMINATION

       

      Section
        9.1 Closing.
        The
        closing of the transactions provided for herein (the “Closing”)
        will
        take place at the offices of Pillsbury Winthrop Shaw Pittman LLP, 1540 Broadway,
        New York, New York 10036 at 10 a.m. (local time) on the date of the satisfaction
        or waiver of all of the conditions to the obligations of the parties hereto
        to
        consummate the transactions contemplated hereby (excluding the delivery of
        any
        documents deliverable at the Closing), or such other place or date as may
        be
        mutually agreeable to the Parties (the “Closing
        Date”).
        On
        the Closing Date, the parties hereto shall cause the First Merger to be
        consummated by the filing of the Certificate of Merger with the Corporation
        Commission of the State of Arizona in accordance with the relevant provisions
        of
        the ABCA.

       

      Section
        9.2 Closing
        Deliverables.
        (a) At
        the Closing, Russell and the Company will deliver to the Parent:

       

      (i) stock
        certificates, in form suitable for transfer, registered in the name of Russell,
        evidencing the Company Common Stock, identified on Schedule
        9.2(a)(i)
        hereto,
        of the Company that is held by Russell, endorsed in blank or with an executed
        blank stock transfer power attached and with all necessary stock transfer
        tax
        stamps attached thereto;

       

      (ii) the
        Non-Competition Agreements;

       

      (iii) the
        Company Closing Certificate;

       

      (iv) the
        duly
        executed Agreed Allocation Statement of Merger Consideration; 

       

      (v) the
        Transfer Documents; and 

       

      (vi) 
        such
        other instruments and documents, in form and substance reasonably acceptable
        to
        the Parent, Russell and the Company as may be reasonably necessary to effect
        the
        Closing.

       

      (b) At
        the
        Closing, the Parent will deliver to:

       

      (i) Russell,
        in accordance with Section 2.1(b), (A) an amount equal to the Preliminary
        Cash
        Merger Consideration (which shall be delivered by check or wire transfer)
        and
        (B) a stock certificate representing the Preliminary Closing Stock Consideration
        (pursuant to Section 1.4), as provided in Section 1.13;

       

      (ii) each
        of
        the Company Debt Obligees, in accordance with Section 2.1(b), the amounts
        owed
        to each of the Company Debt Obligees for satisfaction of all outstanding
        obligations under the Estimated Total Indebtedness;

       

      


      
        
          
            
            

          

          
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      (iii) the
        Parent Closing Certificate; and

       

      (iv) such
        other instruments and documents, in form and substance reasonably acceptable
        to
        the Parent, Russell and the Company as may be reasonably necessary to effect
        the
        Closing.

       

      Section
        9.3 Termination.
        This
        Agreement may be terminated at any time prior to the Closing:

       

      (a) by
        mutual
        written consent of the parties hereto at any time;

       

      (b) by
        any
        party hereto, if, at the Parent Stockholders’ Meeting, including any
        adjournments thereof, this Agreement and the transactions contemplated thereby
        shall fail to be approved and adopted by the affirmative vote of the holders
        of
        Parent Common Stock required under Parent’s certificate of incorporation, or the
        holders of 20% or more of the number of shares of Parent Common Stock issued
        in
        Parent’s initial public offering and outstanding as of the date of the record
        date of the Parent Stockholders’ Meeting exercise their rights to convert the
        shares of Parent Common Stock held by them into cash in accordance with Parent’s
        certificate of incorporation; 

       

      (c) 
        by the
        Parent, Russell or the Company if the Closing shall not have been consummated
        by
        December 20, 2008 (the “Termination
        Date”);
        provided,
        however,
        that
        the right to terminate this Agreement pursuant to this Section 9.3(c) shall
        not
        be available to any party hereto whose failure to perform any of its obligations
        under this Agreement results in the failure of the Closing to be consummated
        by
        such date; provided further
        that so
        long as the Parent has mailed the Proxy Statement to its stockholders on
        or
        prior to the Termination Date, the Termination Date shall be automatically
        extended to January 15, 2009;

       

      (d) by
        the
        Parent, if the Company or Russell shall have breached or failed to perform
        in
        any material respect any of its representations, warranties, covenants or
        other
        agreements contained in this Agreement, which breach or failure to perform
        (A)
        would give rise to the failure of a condition set forth in Section 7.3(a)
        and
        (b), and (B) is incapable of being cured by the Company prior to the Termination
        Date or is not cured by the Company or Russell, as applicable, within 30
        days
        following receipt of written notice from the Parent of such breach or failure
        to
        perform; provided,
        however
        that the
        breach in any material respect of any representation or warranty by the Company
        or Russell (other
        than
        the representations and warranties set forth in Sections 3.3, 3.17 and
        3.20)
        shall
        not give rise to a right of the Parent to terminate this Agreement pursuant
        to
        this Section 9.3(d) but, rather, will give
        rise
        to an indemnification claim
        by the
        Parent pursuant to Article VIII; or

       

      (e) by
        the
        Company or Russell, if the Parent shall have breached or failed to perform
        in
        any material respect any of its representations, warranties, covenants or
        other
        agreements contained in this Agreement, which breach or failure to perform
        (A)
        would give rise to the failure of a condition set forth in Section 7.2(a)
        and
        (b), and (B) is incapable of being cured by the Parent prior to the Termination
        Date or is not cured by the Parent within 30 days following receipt of written
        notice from the Company of such breach or failure to perform; provided,
        however
        that the
        breach in any material respect of any representation or warranty by the Parent
        shall not give rise to a right of the Company or Russell to terminate this
        Agreement pursuant to this Section 9.3(e) but, rather, will give
        rise
        to an indemnification claim
        by
        Russell pursuant to Article VIII.

       

      


      
        
          
            
            

          

          
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      Section
        9.4 Effect
        of Termination.
        (a) In
        the event of termination of this Agreement by Russell, the Parent or the
        Company
        as provided in Section 9.3, this Agreement shall forthwith become null and
        void
        and have no effect, without any liability or obligation on the part of any
        party
        hereto, other than the provisions of this Section 9.4, Section 6.13 and Article
        VIII which provisions shall survive such termination.

       

      ARTICLE
        X 

       

      DEFINED
        TERMS 

       

      Terms
        defined in this Agreement are organized alphabetically as follows, together
        with
        the Section and, where applicable, paragraph, number in which definition
        of each
        such term is located:

       

      
        
          	
                  “ABCA”

                	 	
                  Recitals

                
	
                  “Accounting
                    Principles”

                	 	
                  Section
                    11.2(a) 

                
	
                  “Adjusted
                    EBITDA”

                	 	
                  Section
                    11.2(b)

                
	
                  “Agreed
                    Allocation Statement of Merger Consideration”

                	 	
                  Section
                    11.2 (c)

                
	
                  “affiliate”

                	 	
                  Section
                    11.2(d)

                
	
                  “Affiliate
                    Arrangements”Section 

                	 	
                  3.23(a)

                
	
                  “Agreement”

                	 	
                  Preamble

                
	
                  “Audited
                    Financial Statements”

                	 	
                  Section
                    6.19(a)

                
	
                  “Benchmark
                    Working Capital”

                	 	
                  Section
                    11.2(e)

                
	
                  “Business
                    Day”

                	 	
                  Section
                    11.2(f)

                
	
                  “Certificate(s)”

                	 	
                  Section
                    1.5(b)

                
	
                  “Certificate
                    of Merger”

                	 	
                  Section
                    1.2

                
	
                  “Charter
                    Documents”

                	 	
                  Section
                    3.1(a)

                
	
                  “Claim
                    Notice”

                	 	
                  Section
                    8.1(j)

                
	
                  “Closing”

                	 	
                  Section
                    9.1

                
	
                  “Closing
                    Adjusted EBITDA”

                	 	
                  Section
                    11.2(g)

                
	
                  “Closing
                    Date”

                	 	
                  Section
                    9.1

                
	
                  “Closing
                    Cash”

                	 	
                  Section
                    1.4(b)

                
	
                  “Closing
                    Merger Consideration”

                	 	
                  Section
                    2.5(a)

                
	
                  “Closing
                    New Restaurant Investment Amount”

                	 	
                  Section
                    11.2(h)

                
	
                  “Closing
                    Working Capital”

                	 	
                  Section
                    11.2(i)

                
	
                  “Code”

                	 	
                  Recitals

                
	
                  “Company”

                	 	
                  Preamble

                
	
                  “Company
                    Claimants”

                	 	
                  Section
                    6.17

                
	
                  “Company
                    Closing Certificate”

                	 	
                  Section
                    7.3(a)

                
	
                  “Company
                    Common Stock”

                	 	
                  Section
                    11.2(j)

                


        

         

        
          
            
              
              

            

            
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                    “Company
                      Contracts”

                  	 	
                    Section
                      3.21(a)

                  
	
                    “Company
                      Debt Obligee”

                  	 	
                    Section
                      2.1(a)

                  
	
                    “Company
                      Intellectual Property”

                  	 	
                    Section
                      3.20

                  
	
                    “Company
                      Leases”

                  	 	
                    Section
                      3.15(a)

                  
	
                    “Company
                      Leased Property”

                  	 	
                    Section
                      3.15(a)

                  
	
                    “Company
                      Products”

                  	 	
                    Section
                      3.20

                  
	
                    “Company
                      Registered Intellectual Property”

                  	 	
                    Section
                      3.20

                  
	
                    “Company’s
                      Statement”

                  	 	
                    Section
                      2.1(a)

                  
	
                    “Continuing
                      Employees”

                  	 	
                    Section
                      6.11

                  
	
                    “Continental”

                  	 	
                    Section
                      11.2(l)

                  
	
                    “control”

                  	 	
                    Section
                      11.2(d)

                  
	
                    “Controlled
                      Group Member”

                  	 	
                    Section
                      3.11(a)

                  
	
                    “Corporate
                      Records”

                  	 	
                    Section
                      3.1(c)

                  
	
                    “Current
                      Assets of the Company”

                  	 	
                    Section
                      11.2(ll)(A)

                  
	
                    “Current
                      Liabilities of the Company”

                  	 	
                    Section
                      11.2(ll)(B)

                  
	
                    “Disputes
                      Auditor”

                  	 	
                    Section
                      11.2(l)

                  
	
                    “Dispute
                      Notice”

                  	 	
                    Section
                      2.3

                  
	
                    “DLLCA”

                  	 	
                    Recitals

                  
	
                    “Earn-Out
                      Period”

                  	 	
                    Section
                      11.2(m)

                  
	
                    “Earn-Out
                      Restaurants”

                  	 	
                    Section
                      11.2(n)

                  
	
                    “Effective
                      Time”

                  	 	
                    Section
                      1.2

                  
	
                    “Environmental
                      Law”

                  	 	
                    Section
                      3.18(b)

                  
	
                    “Employee
                      Benefit Plans”

                  	 	
                    Section
                      3.11(a)

                  
	
                    “ERISA”

                  	 	
                    Section
                      3.11(a)

                  
	
                    “Estimated
                      Cash Deduction Amount” 

                  	 	
                    Section
                      1.4(c)

                  
	
                    “Estimated
                      Closing New Restaurant Investment Amount”

                  	 	
                    Section
                      2.1(a)

                  
	
                    “Estimated
                      Closing Adjusted EBITDA”

                  	 	
                    Section
                      2.1(a)

                  
	
                    “Estimated
                      Closing Working Capital”

                  	 	
                    Section
                      2.1(a)

                  
	
                    “Estimated
                      Total Indebtedness”

                  	 	
                    Section
                      2.1(a)

                  
	
                    “Estoppel
                      Certificates”

                  	 	
                    Section
                      11.2(o)

                  
	
                    “Exchange
                      Act”

                  	 	
                    Section
                      6.1(a)

                  
	
                    “Final
                      Closing Statement”

                  	 	
                    Section
                      2.4(c)

                  
	
                    “Final
                      Holdback Payment Date”

                  	 	
                    Section
                      11.2(p)

                  
	
                    “Final
                      New Restaurant Investment Amount”

                  	 	
                    Section
                      2.5(a)

                  
	
                    “Final
                      Total Indebtedness”

                  	 	
                    Section
                      2.5(a)

                  
	
                    “Final
                      Working Capital”

                  	 	
                    Section
                      2.5(a)

                  
	
                    “First
                      Holdback Reserve”

                  	 	
                    Section
                      11.2(q)

                  
	
                    “First
                      Merger”

                  	 	
                    Recitals

                  
	
                    “First
                      Surviving Corporation”

                  	 	
                    Section
                      1.1

                  
	
                    “Governmental
                      Consents”

                  	 	
                    Section
                      7.1(a)

                  
	
                    “Governmental
                      Entity”

                  	 	
                    Section
                      3.5(a)

                  
	
                    “Gross
                      Preliminary Closing Merger Consideration” 

                  	 	
                    Section
                      1.4(c)

                  
	
                    “Hazardous
                      Substance”

                  	 	
                    Section
                      3.18(c)

                  
	
                    “Indemnified
                      Party”

                  	 	
                    Section
                      11.2(t)

                  
	
                    “Indemnifying
                      Party” 

                  	 	
                    Section
                      8.1(j)

                  


          

        

      

    

     

    
      
        
          
            
            

          

          
            60

            
              

            

          

          
            
            

          

        

      

       

      
        	
                “Indemnity
                  Deductible” 

              	 	
                Section
                  8.1(c)(i)

              
	
                “Initial
                  Holdback Payment Date”

              	 	
                Section
                  2.5(b)

              
	
                “Intellectual
                  Property”

              	 	
                Section
                  3.20

              
	
                “IRS”

              	 	
                Section
                  3.11(c)

              
	
                “knowledge”

              	 	
                Section
                  11.2(v)

              
	
                “Legal
                  Requirements”

              	 	
                Section
                  11.2(t)

              
	
                “Lien”

              	 	
                Section
                  11.2(u)

              
	
                “Losses”

              	 	
                Section
                  8.1(a)

              
	
                “Loss
                  Estimate”

              	 	
                Section
                  8.1(j)

              
	
                “Material
                  Adverse Effect”

              	 	
                Section
                  11.2(v)

              
	
                “Material
                  Company Contracts”

              	 	
                Section
                  3.21(a)

              
	
                “Merger
                  Form 8-K”Section 6.3(a)

              	 	 
	
                “Merger
                  Sub”

              	 	
                Preamble

              
	
                “Merger
                  Sub Common Stock”

              	 	
                Section
                  1.4(e)

              
	
                “Multiemployer
                  Plans” Section 3.11(b)

              	 	 
	
                “Negative
                  Cash Merger Consideration Amount

              	 	
                Section
                  1.4(d)

              
	
                “Non-Recourse
                  Person”

              	 	
                Section
                  11.2(w)

              
	
                “Non-Competition
                  Agreement(s)”

              	 	
                Recitals

              
	
                “Oregano
                  LLC”

              	 	
                Preamble

              
	
                “Other
                  Filings”

              	 	
                Section
                  6.1(a)

              
	
                “Parent”

              	 	
                Preamble

              
	
                “Parent
                  Adjustment Amount”

              	 	
                Section
                  2.5(a)

              
	
                “Parent
                  Closing Certificate”

              	 	
                Section
                  7.2(a)

              
	
                “Parent
                  Common Stock” 

              	 	
                Section
                  11.2(x)

              
	
                “Parent
                  Indemnified Persons”

              	 	
                Section
                  8.1(a)

              
	
                “Parent
                  Plan”

              	 	
                Section
                  6.1(a)

              
	
                “Parent
                  Proceedings”

              	 	
                Section
                  4.6

              
	
                “Parent
                  SEC Reports”

              	 	
                Section
                  4.5

              
	
                “Parent
                  Stockholders’ Meeting”

              	 	
                Section
                  3.26

              
	
                “Parent
                  Stockholder Approval”

              	 	
                Section
                  6.1(a)

              
	
                “Patents”

              	 	
                Section
                  3.20

              
	
                “Permits”

              	 	
                Section
                  3.6(b)

              
	
                “Permitted
                  Liens”

              	 	
                Section
                  11.2(y)

              
	
                “Person”

              	 	
                Section
                  11.2(z)

              
	
                “Personal
                  Property”

              	 	
                Section
                  3.14

              
	
                “Preliminary
                  Cash Merger Consideration” 

              	 	
                Section
                  1.4(b)

              
	
                “Preliminary
                  Closing Merger Consideration” 

              	 	
                Section
                  1.4(c

              
	
                “Preliminary
                  Closing Statement”

              	 	
                Section
                  2.2(a)

              
	
                “Preliminary
                  Closing Stock Consideration”

              	 	
                Section
                  11.2(aa)

              
	
                “Preliminary
                  Parent Stock Consideration”

              	 	
                Section
                  1.4(d)

              
	
                “Press
                  Release”

              	 	
                Section
                  6.3(a)

              
	
                “Proceedings”

              	 	
                Section
                  3.10(a)

              
	
                “Prospectus”

              	 	
                Section
                  6.17

              
	
                “Proxy
                  Statement”

              	 	
                Section
                  3.26

              
	
                “Real
                  Estate Purchase Agreement”

              	 	
                11.2(bb)

              
	
                “Reallocated
                  Stock” 

              	 	
                Section
                  1.4(d)

              


      

    

     

    
      
        
          
            
            

          

          
            61

            
              

            

          

          
            
            

          

        

      

       

      
        
          	
                  “Registered
                    Intellectual Property”

                	 	
                  Section
                    3.20

                
	
                  “Remaining
                    Holdback Shares”

                	 	
                  Section
                    11.2(cc)

                
	
                  “Response
                    Date”

                	 	
                  Section
                    8.3(a)

                
	
                  “Response
                    Notice”

                	 	
                  Section
                    8.3(a)

                
	
                  “Restaurant
                    Earn-Out Amount” 

                	 	
                  Section
                    11.2(dd)

                
	
                  “Restaurant
                    Milestone”

                	 	
                  Section
                    11.2(ee)

                
	
                  “Russell”

                	 	
                  Preamble

                
	
                  “SEC”

                	 	
                  Section
                    6.1(a)

                
	
                  “Second
                    Certificate of Merger”

                	 	
                  Section
                    1.17(a)

                
	
                  “Second
                    Effective Time”

                	 	
                  Section
                    1.17(a)

                
	
                  “Second
                    Holdback Reserve”

                	 	
                  Section
                    11.2(ff

                
	
                  “Second
                    Merger”

                	 	
                  Recitals

                
	
                  “Securities
                    Act”

                	 	
                  Section
                    6.1(a)

                
	
                  “Seller
                    Indemnified Persons”

                	 	
                  Section
                    8.1(b)

                
	
                  “Shareholder”
                    

                	 	
                  Section
                    11.2(qq)

                
	
                  “Shareholder
                    Adjustment Amount”

                	 	
                  Section
                    2.5(a)

                
	
                  “Shareholder
                    Approval”

                	 	
                  Section
                    11.2(hh)

                
	
                  “Shareholder
                    Consent”

                	 	
                  Recitals

                
	
                  “Straddle
                    Period”

                	 	
                  Section
                    8.1(a)

                
	
                  “Surviving
                    LLC”

                	 	
                  Section
                    1.17(a)

                
	
                  “Tax/Taxes”

                	 	
                  Section
                    3.17(f)

                
	
                  “Tax
                    Return”

                	 	
                  Section
                    3.17(g)

                
	
                  “Termination
                    Date”

                	 	
                  Section
                    9.3(c)

                
	
                  “Third
                    Party Claim”

                	 	
                  Section
                    8.1(j)

                
	
                  “Total
                    Holdback Shares”

                	 	
                  Section
                    11.2(ll)

                
	
                  “Total
                    Indebtedness”

                	 	
                  Section
                    11.2(jj)

                
	
                  “Total
                    Merger Consideration”

                	 	
                  Section
                    11.2(kk) “

                
	
                  Transaction”
                    

                	 	
                  Recitals

                
	
                  “Transfer
                    Documents”

                	 	
                  Section
                    7.3(q)

                
	
                  “Transferred
                    Property”

                	 	
                  Section
                    6.2

                
	
                  “Trademarks”

                	 	
                  Section
                    3.20

                
	
                  “Trust
                    Fund”

                	 	
                  Section
                    4.8

                
	
                  “U.S.
                    GAAP”

                	 	
                  Section
                    3.7(a)

                
	
                  “Unaudited
                    Financial Statements”

                	 	
                  Section
                    3.7(a)

                
	
                  “Working
                    Capital of the Company”

                	 	
                  Section
                    11.2(ll)

                


        

      

       

      ARTICLE
        XI 

       

      GENERAL
        PROVISIONS

       

      Section
        11.1 Notices.
        All
        notices and other communications hereunder shall be in writing and shall
        be
        deemed to have been duly given or served for all purposes upon receipt of
        (i)
        hand delivery, (ii) certified or registered mail, return receipt requested,
        (iii) internationally recognized overnight courier service (costs prepaid)
        or
        (iv) telecopy transmission with confirmation of receipt:

       

      


      
        
          
            
            

          

          
            62

            
              

            

          

          
            
            

          

        

      

      


      if
        to
        Parent, to:

      


      Restaurant
        Acquisition Partners, Inc.

      5950
        Hazeltine National Drive, Suite 290

      Orlando,
        Florida 32822

      Attention:
        Christopher R. Thomas

      Telephone:
        407-240-9190

      Facsimile:
        407-240-9176

      


      with
        a
        copy to:

      


      Ronald
        A.
        Fleming, Jr., Esq.

      Pillsbury
        Winthrop Shaw Pittman LLP.

      1540
        Broadway

      New
        York,
        New York 10017

      Telephone:
        212-858-1143

      Facsimile:
        212-298-9931

      


      


      if
        to
        Russell or the Company (prior to the Closing Date) to:

      


      Oregano’s
        Pizza Bistro, Inc.

      7217
        East
        Shea Blvd 

      Scottsdale,
        AZ 85260

      Attention:
        Mark S. Russell

      Telephone:
        480-829-0898

      Facsimile:
        480-998-3926

       

      with
        a
        copy to:

      


      Tiffany
        & Bosco, P.A.

      Third
        Floor Camelback Esplanade II

      2525
        East
        Camelback Road

      Phoenix,
        AZ 85016-9240

      Attention:
        Alexander Poulos, Esq. 

      Telephone:
        602-255-6000

      Facsimile:
        602-255-0103

      


      Section
        11.2 Interpretation.
        When a
        reference is made in this Agreement to an Exhibit or Schedule, such reference
        shall be to an Exhibit or Schedule to this Agreement unless otherwise indicated.
        When a reference is made in this Agreement to Sections or subsections, such
        reference shall be to a Section or subsection of this Agreement. Unless
        otherwise indicated the words “include,” “includes”
        and
“including”
        when
        used herein shall be deemed in each case to be followed by the words
“without
        limitation.”
        The
        table of contents and headings contained in this Agreement are for reference
        purposes only and shall not affect in any way the meaning or interpretation
        of
        this Agreement. When reference is made herein to “the business of” an entity,
        such reference shall be deemed to include the business of all direct and
        indirect subsidiaries of such entity. Reference to the subsidiaries of an
        entity
        shall be deemed to include all direct and indirect subsidiaries of such entity.
        For purposes of this Agreement:

       

      


      
        
          
            
            

          

          
            63

            
              

            

          

          
            
            

          

        

      

      


      (a) the
        term
“Accounting
        Principles”
        shall
        mean the accounting principles, policies and procedures of the Company used
        in
        preparing the Unaudited Financial Statements; 

       

      (b) the
        term
“Adjusted
        EBITDA”
shall
        mean (i) restaurant operating profit, plus
        (ii)
        interest, plus
        (iii)
        taxes, plus (iv) depreciation, plus
        (v)
        amortization, plus
        (vi)
        non-recurring expenses as set forth in Schedule
        11.2(b),
        minus
        (vii) corporate overhead, each calculated in accordance with past practices
        for
        the twelve (12) month period ending August 31, 2008;

       

      (c) the
        term
“Agreed
        Allocation Statement of Merger Consideration”
shall
        mean the allocation of the Merger Consideration, in the form attached as
        Schedule
        11.2(c),
        reasonably agreed to and signed by Parent, Russell and the Company as of
        the
        Closing Date.

       

      (d) the
        term
“affiliate”
        shall
        mean, as applied to any Person, any other Person directly or indirectly
        controlling, controlled by or under direct or indirect common control with,
        such
        Person. For purposes of this definition, “control”
        (including with correlative meanings, the terms “controlling,” “controlled
        by”
        and
“under
        common control with”),
        as
        applied to any Person, means the possession, directly or indirectly, of the
        power to direct or cause the direction of the management and policies of
        such
        Person, whether through the ownership of voting securities, by contract or
        otherwise; 

       

      (e) the
        term
“Benchmark
        Working Capital”
        shall
        mean a negative one million five hundred thousand dollars
        ($-1,500,000).

       

      (f) the
        term
“Business
        Day”
        shall
        mean any day that is not a Saturday, Sunday or other day on which banking
        institutions in New York, New York are authorized or obligated to be
        closed;

       

      (g) the
        term
“Closing
        Adjusted EBITDA”
shall
        mean the Adjusted EBITDA of the Company for the period ending August 31,
        2008 as
        such item appears in the Final Closing Statement;

       

      (h) the
        term
“Closing
        New Restaurant Investment Amount”
        shall
        mean the amount of any fully documented third party capital expenditures
        reasonably incurred by the Company and paid prior to the Closing Date, in
        accordance with the project development plan and budget, for the construction
        or
        development of any new “Oregano’s Pizza Bistro, Inc.” restaurants;

       

      (i) the
        term
“Closing
        Working Capital”
        shall
        mean the Working Capital of the Company as of the close of business on the
        Business Day immediately preceding the Closing Date, determined in accordance
        with the Accounting Principles;

       

      


      
        
          
            
            

          

          
            64

            
              

            

          

          
            
            

          

        

      

      


      (j) the
        term
“Company
        Common Stock”
        shall
        mean Company
        Class A common stock, $1.00 par value per share;

       

      (k) the
        term
“Continental”
        shall
        mean a Continental Stock Transfer and Trust Company;

       

      (l) the
        term
“Disputes
        Auditor”
shall
        mean Walker & Armstrong LLP, 4000 N. Central Ave., Suite 1100, Phoenix,
        Arizona or any other independent public accounting firm mutually agreed upon
        by
        Russell and the Parent;

       

      (m) the
        term
“Earn-Out
        Period”
shall
        mean the earlier of (i) the completion of the Restaurant Milestone to the
        reasonable satisfaction of the Parent and (ii) the second anniversary of the
        Closing Date; provided,
        however
        that in
        either case all of the Earn-Out Restaurants must have been completed to the
        reasonable satisfaction of the Parent; 

       

      (n) the
        term
“Earn-Out
        Restaurants”
shall
        mean three (3) new incremental Company restaurants;

       

      (o) the
        term
“Estoppel
        Certificate”
shall
        mean a fully executed original certificate, in form and substance reasonably
        satisfactory to the Parent, from any landlord or tenant of a Company Leased
        Property, dated no more than ten days prior to the Closing, certifying (i)
        that
        the Company Lease is in good standing and full force and effect in accordance
        with its terms and has not been modified (except for the modifications set
        forth
        therein), amended or assigned; (ii) the date or dates to which rent and other
        charges thereunder have been paid; (iii) that there is no default thereunder
        on
        the part of any party thereto; (iv) that all work required to be done under
        the
        Company Lease has been completed to its satisfaction; and (v) as to such
        further
        actions as may reasonably be requested by the Parent;

       

      (p) the
        term
“Final
        Holdback Payment Date”
        shall
        mean twelve (12) months following the Closing Date;

       

      (q) the
        term
“First
        Holdback Reserve”
shall
        mean the aggregate amount of all (i) Losses of the Parent Indemnified Persons
        that have been finally determined and (ii) Loss Estimates of the Parent
        Indemnified Persons set forth in any Claim Notices that have been made, but
        have
        not been finally determined (in accordance with Section 8.3), prior to the
        Initial Holdback Payment Date;

       

      (r) the
        term
“Indemnified
        Party”
        shall
        mean the Parent Indemnified Persons or the Seller Indemnified Persons, as
        the
        case may be;

       

      (s) the
        term
“knowledge”
        (including any derivation thereof such as “known”
        or
“knowing”)
        shall
        mean: (i) with respect to the Company, the knowledge, with a duty of reasonable
        inquiry of Persons within the Company, of the individuals specified on Schedule
        11.2(p)(i)
        and (ii)
        with respect to the Parent, the knowledge, with a duty of reasonable inquiry
        of
        Persons within the Parent, of the individuals specified on Schedule 11.2(p)(ii);

       

      


      
        
          
            
            

          

          
            65

            
              

            

          

          
            
            

          

        

      

      


      (t) the
        term
“Legal
        Requirements”
        shall
        mean any federal, state, local, municipal, foreign or other law, statute,
        constitution, principle of common law, resolution, ordinance, code, edict,
        decree, rule, regulation, arbitration award, license, permit, ruling or
        requirement issued, enacted, adopted, promulgated, implemented or otherwise
        put
        into effect by or under the authority of any Governmental Entity;

       

      (u) the
        term
“Lien”
        shall
        mean, with respect to any property or asset, any mortgage, pledge, security
        interest, encumbrance, lien, restriction or charge of any kind (including,
        without limitation, any conditional sale or other title retention agreement
        or
        lease in the nature thereof, any sale with recourse against the seller or
        any
        affiliate of the seller, or any agreement to give any security
        interest); 

       

      (v) the
        term
“Material
        Adverse Effect”
        when
        used in connection with an entity shall mean (a) any event, condition,
        circumstances or change, which has or would be reasonably expected to have
        any
        adverse change in or effect on the properties, business, assets (including
        intangible assets), revenues, financial condition or results of operations
        of
        the Company which is material to the Company taken as a whole; provided,
        however,
        that
        the following shall not be considered a Material Adverse Effect: (i) changes,
        events, inaccuracies, circumstances and effects that are caused by or arise
        out
        of (y) economic or business conditions in the United States generally and
        which
        do not disproportionately impact the Company (z) conditions effecting the
        industry in which the Company competes as a whole and which do not
        disproportionately impact the Company or (ii) any effect attributable to
        or
        arising out of (x) the public announcement or the pendency of this Agreement
        or
        the performance of this Agreement, (y) any action taken by the Company in
        compliance with this Agreement, (z) changes in Legal Requirements or U.S.
        GAAP
        or the enforcement or interpretation thereof; or (b) any effect that would
        materially impair the Company’s or the Parent’s ability to consummate the
        transaction contemplated hereby;

       

      (w) the
        term
“Non-Recourse
        Person”
        shall
        mean the Parent’s Merger Sub’s and Oregano’s LLC’s stockholders, members,
        directors, managers, officers, employees, agents or affiliates (as
        applicable);

       

      (x) the
        term
“Parent
        Common Stock”
        shall
        mean the authorized shares of Parent common stock, $0.0001 par
        value;

       

      (y) the
        term
“Permitted
        Liens”
        shall
        mean (i) reflected in the Unaudited Financial Statements reference balance
        sheet
        (ii) Liens for current taxes not yet due and payable or that is being contested
        in good faith and (iii) minor Liens that have arisen in the ordinary course
        of
        business and that do not (in any case or in the aggregate) materially detract
        from the value of the assets subject thereto or materially impair the operations
        of the Company;

       

      (z) the
        term
“Person”
        shall
        mean any individual, corporation (including any non-profit corporation),
        general
        partnership, limited partnership, limited liability partnership, joint venture,
        estate, trust, company (including any limited liability company or joint
        stock
        company), firm or other enterprise, association, organization, entity or
        Governmental Entity;

       

      


      
        
          
            
            

          

          
            66

            
              

            

          

          
            
            

          

        

      

       

      (aa)
        the
        term “Preliminary
        Closing Stock Consideration”
shall
        mean the Preliminary Parent Stock Consideration less the Total Holdback
        Shares;

       

      (bb) the
        term
“Real
        Estate Purchase Agreement”
        shall
        mean that certain purchase and sale agreement made and entered into as of
        the
        date hereof, by and among Oregano’s Real Estate Holdings LLC, a Delaware limited
        liability company, City Surf Management LLC, an Arizona limited liability
        company and Russell;

       

      (cc) the
        term
“Remaining
        Holdback Shares”
shall
        mean an amount of shares equal to the Total Holdback Shares then held by
        the
        Parent (for the avoidance of doubt, in no event shall Total Holdback Shares
        (i)
        withheld by the Parent pursuant to Section 2.5 and/or (ii) used to satisfy
        Losses of the Parent Indemnified Persons that have been finally determined,
        constitute Remaining Holdback Shares), minus
        the
        Second Holdback Reserve;

       

      (dd) the
        term
“Restaurant
        Earn-Out Amount”
        shall
        mean an amount equal to one (1) times the Closing Adjusted EBITDA, as reflected
        on the Final Closing Statement, payable in cash or Parent Common Stock (at
        Russell’s option) in accordance with Section 2.7; 

       

      (ee) the
        term
“Restaurant
        Milestone”
        shall
        mean the completion and opening of the Earn-Out Restaurants;

       

      (ff) the
        term
“Second
        Holdback Reserve”
shall
        mean the aggregate amount of all (i) Losses of the Parent Indemnified Persons
        that have been finally determined and (ii) Loss Estimates of the Parent
        Indemnified Persons set forth in any Claim Notices that have been made, but
        have
        not been finally determined (in accordance with Section 8.3), prior to the
        Final
        Holdback Payment Date;

       

      (gg) the
        term
“Shareholder”
        shall
        mean Russell, the holder of all issued and outstanding Company Common
        Stock;

       

      (hh) the
        term
“Shareholder
        Approval”
        shall
        mean the requisite affirmative vote of the holders of Company Common Stock
        required by the Charter Documents and Legal Requirements to approve this
        Agreement and the Transaction;

       

      (ii) the
        term
“Total
        Holdback Shares”
        shall
        mean the aggregate number of shares of the Parent Common Stock that may be
        issued by dividing (x) $2,547,100 by (y) the average daily closing price
        of a
        share of Parent Common Stock quoted on the Over-the-Counter Bulletin Board
        for
        the five trading days ending on the second Business Day prior to the first
        public announcement pertaining to this Agreement;

       

      


      
        
          
            
            

          

          
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      (jj) the
        term
“Total
        Indebtedness”
        shall
        mean, without duplication (i) all indebtedness for borrowed money (secured
        or
        unsecured) or indebtedness issued or incurred in substitution or exchange
        for
        indebtedness for borrowed money, secured or unsecured, all obligations evidenced
        by bonds, debentures, notes or similar instruments, all liabilities in respect
        of mandatorily redeemable or purchasable capital stock or securities convertible
        into capital stock, and any interest, premium, fees, penalties unpaid and
        owing
        with respect to the foregoing liabilities; (ii) all liabilities for the deferred
        purchase price of property; (iii) all liabilities in respect of any lease
        of (or
        other arrangement conveying the right to use) real or personal property,
        or a
        combination thereof, which liabilities are required to be classified and
        accounted for under U.S. GAAP as capital leases; (iv) any prepayment penalties
        or acceleration payments payable in connection with the Merger or in connection
        with the prepayment of indebtedness following the Effective Time, in each
        case
        with respect to Indebtedness outstanding as of the Closing; (v) any payment
        obligation in respect of interest under any existing interest rate swap or
        hedge
        agreement entered into by the Company with respect to any liabilities described
        in clauses (i) or (ii) above; (vi) any negative cash or overdraft balances;
        (vii) all liabilities for the reimbursement of any obligor on any letter
        of
        credit, banker’s acceptance or similar credit transaction securing obligations
        of a type described in clauses (i), (ii) or (iii) above to the extent of
        the
        obligation secured, and all liabilities as obligor, guarantor, or otherwise,
        to
        the extent of the obligation secured; and (viii) any
        out-of-pocket costs, payables, fees and expenses incurred by the Company
        on
        its
        own behalf or on behalf of Russell in
        connection with this Agreement and the transactions contemplated hereby and
        thereby (including fees and expenses of the Company’s financial advisors, legal
        counsel, accountants, and other advisors) which have not been paid by
        the
        Company prior
        to
        the Closing.
        For the
        avoidance of doubt the term “Total Indebtedness” shall not include Current
        Liabilities of the Company and Current Assets of the Company;

       

      (kk) the
        term
“Total
        Merger Consideration”
        shall
        mean the sum of (a) the
        Closing Merger Consideration, plus
        (b) the
        Restaurant Earn-Out Amount, if any.

       

      (ll) the
        term
“Working
        Capital of the Company”
        shall
        mean the
        Current Assets of the Company less the Current Liabilities of the Company,
        excluding cash, deferred tax assets or deferred tax liabilities, accrued
        interest associated with Total Indebtedness, current portion of obligations
        under capital lease, and current portion of long term debt, as recorded on
        the
        Preliminary Closing Statement or on the Final Closing Statement, as applicable
        and accounted for in a manner consistently applied with the Audited Financial
        Statements.
        For the
        purposes of this Agreement: (A) “Current
        Assets of the Company”
means
        the Company current assets as recorded on the Preliminary Closing Statement
        or
        on the Final Closing Statement, as applicable and (B) “Current
        Liabilities of the Company”
means
        the Company current liabilities as recorded on the Preliminary Closing Statement
        or on the Final Closing Statement, as applicable; 

      


      (mm) all
        monetary amounts set forth herein are referenced in United States dollars,
        unless otherwise noted.

       

      Section
        11.3 Governing
        Law; Consent to Jurisdiction and Waiver of Jury Trial.
        (a)
        This Agreement shall be governed by and construed in accordance with the
        internal substantial laws and not the choice of law rules of the State of
        Arizona.

       

      


      
        
          
            
            

          

          
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      (b) Each
        party hereto hereby irrevocably and unconditionally consents to submit to
        the
        exclusive jurisdiction of the courts of the federal or state courts located
        in Arizona,
        for any actions, suits or proceedings arising out of or relating to this
        Agreement and the transactions contemplated hereby (and the parties hereto
        agree
        not to commence any action, suit or proceeding relating thereto except in
        such
        courts), and further agrees that service of any process, summons, notice
        or
        document by U.S. registered or certified mail to such party’s principal place of
        business shall be effective service of process for any action, suit or
        proceeding arising out of the parties in any such court. Each party hereby
        irrevocably and unconditionally waives any objection to the laying of venue
        of
        any action, suit or proceeding arising out of this Agreement or the transactions
        contemplated hereby, in such state or federal courts as aforesaid, and hereby
        further irrevocably and unconditionally waives its right and agrees not to
        plead
        or claim in any such court that any such action, suit or proceeding brought
        in
        any such court has been brought in an inconvenient forum.

       

      (c) The
        parties hereto each hereby waive trial by jury in any judicial proceeding
        involving, directly or indirectly, any matters (whether sounding in tort,
        contract or otherwise) in any way arising out of, related to, or connected
        with
        this Agreement, the transactions contemplated hereby or the relationship
        established hereunder.

       

      Section
        11.4 Counterparts;
        Facsimile Signatures.
        This
        Agreement may be executed in one or more counterparts, all of which shall
        be
        considered one and the same agreement and shall become effective when one
        or
        more counterparts have been signed by each of the parties and delivered to
        the
        other party, it being understood that all parties hereto need not sign the
        same
        counterpart. Delivery by facsimile to counsel for the other party of a
        counterpart executed by a party shall be deemed to meet the requirements
        of the
        previous sentence.

       

      Section
        11.5 Entire
        Agreement; Third Party Beneficiaries.
        This
        Agreement and the documents and instruments and other agreements among the
        parties hereto as contemplated by or referred to herein, including the Schedules
        hereto (a) constitute the entire agreement among the parties with respect
        to the
        subject matter hereof and supersede all prior agreements and understandings,
        both written and oral, among the parties with respect to the subject matter
        hereof; and (b) are not intended to confer upon any other person any rights
        or
        remedies hereunder (except as specifically provided in this
        Agreement).

       

      Section
        11.6 Severability.
        In the
        event that any provision of this Agreement, or the application thereof, becomes
        or is declared by a court of competent jurisdiction to be illegal, void or
        unenforceable, the remainder of this Agreement will continue in full force
        and
        effect and the application of such provision to other persons or circumstances
        will be interpreted so as reasonably to effect the intent of the parties
        hereto.
        The parties hereto further agree to replace such void or unenforceable provision
        of this Agreement with a valid and enforceable provision that will achieve,
        to
        the extent possible, the economic, business and other purposes of such void
        or
        unenforceable provision.

       

      


      
        
          
            
            

          

          
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      Section
        11.7 Assignment.
        This
        Agreement may not be transferred, assigned, pledged or hypothecated by any
        party
        hereto without the express written consent of the other party hereto, other
        than
        by operation of law; provided,
        that
        the Parent may assign its rights, interests and obligations hereunder (i)
        to any
        direct or indirect wholly owned subsidiary of the Parent or to any Affiliate
        of
        which the Parent is a direct or indirect wholly owned subsidiary and (ii)
        for
        the purpose of securing any financing of the transactions contemplated hereby;
        provided,
        further,
        that if
        the Parent makes any assignment referred to in (i) or (ii) above, the Parent
        shall remain liable under this Agreement. This Agreement shall be binding
        upon
        and shall inure to the benefit of the parties hereto and their respective
        heirs,
        executors, administrators, successors and permitted assigns.

       

      Section
        11.8 Amendment.
        This
        Agreement may be amended by the parties hereto at any time by execution of
        an
        instrument in writing signed on behalf of each of the parties
        hereto.

       

      Section
        11.9 Extension;
        Waiver.
        At any
        time prior to the Closing, any party hereto may, to the extent legally allowed,
        (i) extend the time for the performance of any of the obligations or other
        acts
        of the other parties hereto, (ii) waive any inaccuracies in the representations
        and warranties made to such party contained herein or in any document delivered
        pursuant hereto and (iii) waive compliance with any of the agreements or
        conditions for the benefit of such party contained herein. Any agreement
        on the
        part of a party hereto to any such extension or waiver shall be valid only
        if
        set forth in an instrument in writing signed on behalf of such party. Delay
        in
        exercising any right under this Agreement shall not constitute a waiver of
        such
        right.

       

      Section
        11.10 Specific
        Performance.
        The
        parties hereto agree that immediate and irreparable harm and damage would
        occur
        for which monetary damages alone would not be an adequate remedy in the event
        that any of the provisions of this Agreement were not performed in accordance
        with their specific terms or were otherwise breached. It is accordingly agreed
        that in the event of such breach or non-performance neither party hereto,
        and
        nothing in this Agreement, shall interfere with, delay, obstruct, or prevent
        the
        non-breaching party hereto from taking, or require such party to take, any
        steps
        prior to taking action to seek an interim and interlocutory equitable remedy
        (including an injunction or order for specific performance) on notice or
        ex
        parte to enforce its rights or to preserve the status quo or prevent irreparable
        harm and each party hereto covenants and agrees not to contest, object to,
        or
        otherwise oppose an application for equitable relief by the other party in
        such
        circumstances, and waives any and all immunities from any equitable relief
        to
        which it may be entitled. Any such relief or remedy shall not be exclusive,
        but
        shall be in addition to all other available legal or equitable remedies.
        Each
        party hereto agrees that the provisions of this Section 11.10 are fair and
        reasonable in the commercial circumstances of this Agreement, and that neither
        party hereto would have entered into this Agreement but for each party’s
        agreement with the provisions of this Section.

       

      Section
        11.11 No
        Strict Construction.
        The
        parties hereto have participated jointly in the negotiation and drafting
        of this
        Agreement. In the event any ambiguity or question of intent or interpretation
        arises, this Agreement shall be construed as if drafted jointly by all parties
        hereto, and no presumption or burden of proof shall arise favoring or
        disfavoring any party by virtue of the authorship of any provision of this
        Agreement.

       

      
        [THE
          REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]

      

      


      
        
          
            
            

          

          
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      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
        as
        of the date first written above.

       

      
        	
                RESTAURANT
                  ACQUISITION PARTNERS, INC.

              
	 
	
                By:

              	
                /s/
                  Christopher R. Thomas

              
	 	
                Name:
                  Christopher R. Thomas

              
	 	
                Title:
                  President and CEO

              


      

      

        
          	
                  OREGANO’S
                    ACQUISITION, INC.

                
	 
	
                  By:

                	
                   /s/
                    Christopher R. Thomas

                
	 	
                  Name:
                    Christopher R. Thomas

                
	 	
                  Title:
                    President

                


        

         

      

      
        
          	
                  
                    OREGANO’S
                      HOLDINGS LLC

                  

                
	 
	
                  By:

                	
                  RESTAURANT
                    ACQUISITION PARTNERS, INC.

                
	Its: 	
                  
                    Managing
                      Member

                  

                


        

         

      

      
        	
                By:
                  /s/ Christopher R. Thomas

              
	
                Name:
                  Christopher R. Thomas

              
	
                Title:
                  President and CEO

              


      

      


      
        	
                OREGANO’S
                  PIZZA BISTRO, INC.

              
	 
	
                By:

              	
                 /s/
                  Mark S. Russell

              
	 	
                Name:
                  Mark S. Russell

              
	 	
                Title:
                  President

              


      

      


      
        	
                MARK
                  S. RUSSELL 

              
	 
	
                By:
                  /s/
                  Mark S. Russell

              
	
                Name:
                  Mark S. Russell

              


      

       

      -
        Signature Page to Merger Agreement -