Exhibit 10.5
COVENANT NOT TO COMPETE
This Covenant Not to
Compete, effective the 1st day of July, 2004, between Seller and
Purchaser:
1.
Recitals.
The parties to this
Covenant Not to Compete hereby make the following
declarations.
a.
That in connection with
the execution of the Covenant Not to Compete, the parties have
entered into a Business Transfer Agreement for the sale of the
Business Assets of a business owned by Seller and known as Burger
Time.
b.
That pursuant to the
terms and conditions of the Business Transfer Agreement, the
parties have agreed to limi the future business activities of
Seller, Douglas R. Geeslin and Ralph B. Nordick
2.
Definitions.
For the purposes of this
Covenant Not to Compete:
a.
"Purchaser" shall mean
Burger Time Acquisition Corporation, a corporation organized under
the laws of the State of Minnesota, whose mailing address is 13828
Lincoln Street NE, Ham Lake, Minnesota 55304.
b.
"Seller" shall mean
Burger Time Corporation, a corporation organized under the laws of
the State of North Dakota, whose mailing address is 675 12th Avenue
NE, West Fargo, North Dakota 58078.
c.
“Doug
Geeslin” shall mean Douglas R. Geeslin, whose mailing address
is 1052 Sunset Boulevard, P.O. Box 1015, Hawley, Minnesota
56549.
d.
“Ralph
Nordick” shall mean Ralph B. Nordick, whose mailing address
is 2457 West Country Club Drive, Fargo, North Dakota
58103.
e.
“Burger Time
Parties” shall collectively mean Seller, Douglas R. Geeslin
and Ralph B. Nordick.
f.
"Covenant Not to
Compete" shall mean this Covenant Not to Compete between Seller,
Douglas R. Geeslin, Ralph B. Nordick and Purchaser.
g.
"Business Transfer
Agreement" shall mean the Business Transfer Agreement, dated July
1, 2004, between Seller and Purchaser.
h.
“Note”
shall mean that certain promissory note of a date even herewith in
original principal amount of Three Hundred Thousand and 00/100
($300,000.00) Dollars given by Purchaser as Borrower to Seller as
Lender in connection with the Business Transfer
Agreement.
i.
“Contracts for
Deed” shall mean the contracts for deed relating to ten (10)
parcels of real estate entered into by Seller and Purchaser as of
the date hereof in connection with the execution of the Business
Transfer Agreement.
3.
Acknowledgment of
Burger Time Parties. Each of the Burger Time Parties
acknowledges that:
a.
The promises and
restrictive covenants that each of the Burger Time Parties is
providing in this Covenant Not to Compete are reasonable and
necessary to the protection of Purchaser’s business and the
Purchaser’s legitimate interests in its acquisition of the
Business Assets pursuant to the Business Transfer
Agreement;
b.
Each of the Burger Time
Parties will receive a substantial benefit from the consummation of
the transactions contemplated by the Business Transfer Agreement;
and,
c.
The execution and
delivery of this Covenant Not to Compete by each of the Burger Time
Parties is a material inducement to the willingness of the
Purchaser to enter into the Business Transfer Agreement, and is a
condition to the obligations of the Purchaser to consummate the
transactions contemplated by the Business Transfer
Agreement.
4.
Covenant Not to
Compete. The Burger Time Parties agree that
it or he, respectively, shall not at any time within the three (3)
year period beginning July 1, 2004, and ending June 30, 2007,
directly or indirectly engage in, or have any interest in, whether
as an officer, director, stockholder, owner, salesperson, co-owner,
partner, trustee, promoter, technician, engineer, analyst,
employee, agent, representative, distributor, supplier, investor,
lender, consultant, advisor or manager of or to, any person, firm,
corporation, or business (whether as an employee, officer,
dir
