WARRANT PURCHASE AGREEMENT
WARRANT PURCHASE AGREEMENT ("Agreement") by and between FIDELITY NATIONAL
FINANCIAL, INC. ("Purchaser"), XXXXXXX, NORTH, XXXXXX & XXXXX, P.C. ("Seller"),
and GB FOODS CORPORATION, a Delaware corporation (the "Company") dated this
_____ day of July, 1997.
RECITALS:
This Agreement is made with reference to the following facts and
circumstances:
(a) Purchaser desires to purchase warrants exercisable for the purchase
of common stock, par value $.08 ("Common Stock") of the Company; and
(b) Seller desires to sell such warrants to the Purchaser.
AGREEMENT:
In consideration of the foregoing Recitals which are incorporated with and
are made a part of this Agreement, and in further consideration of the mutual
covenants and agreements hereinafter contained, the parties hereto agree,
subject to the terms and conditions hereinafter set forth, as follows:
1. SALE AND PURCHASE. Subject to the terms and conditions contained
herein, at the Closing (as hereinafter defined), Purchaser shall sell, transfer,
assign, convey and deliver to Purchaser and Purchaser shall purchase free and
clear of all liens, claims and encumbrances a warrant or warrants to purchase
1,000,000 shares of Common Stock with an exercise price of $7.50 per share
evidenced by that certain warrant certificate dated May 1, 1995, and all rights
in, to and under that certain Warrant Agreement dated May 1, 1995 (the
"Securities"). Seller warrants to Purchaser that Seller has good, complete and
marketable title to the Securities, subject to the Company's Board of Directors
consent to transfer contained in Section 7.
2. CONSIDERATION. The Purchaser shall pay to Seller, as consideration
for the Securities, a cash amount of $100,000 (the "Purchase Price") in
immediately available funds at the Closing.
3. CERTAIN MATTERS WITH RESPECT TO SELLER'S SECURITIES.
3.1 UNDERTAKING OF PURCHASER AND CERTIFICATE LEGENDS. The Purchaser
represents and undertakes that:
(i) The Securities that are being acquired by the Purchaser are
not for other persons and are not being and will not be
acquired with a view to the distribution thereof, except to
the extent permitted by the Securities Act of 1933, as
amended, (the "1933 Act") and the rules and regulations
thereunder.
(ii) None of the Securities will be transferred by or through
the Purchaser in violation of the 1933 Act, any state
securities laws, the securities laws of any other country
or province or the terms of this Agreement.
(iii) The Purchaser understands that the Securities have not been
registered under the 1933 Act and, therefore, cannot be
resold or otherwise transferred in the United
States unless such shares are registered under the 1933 Act,
or unless an exemption from registration is available.
(iv) The certificates representing the Common Stock issuable
upon exercise of the Securities will bear a restrictive
legend in substantially the following form and an
appropriate stop transfer order may, and will, be placed
against the transfer of the share certificates and no
transfer of the shares will be valid unless made in
accordance with this Agreement:
"The securities represented by this certificate have been
issued or transferred to the registered holder as a result
of a transaction to which the exemption provided by
Section 4(2) under the Securities Act of 1933, as amended
(the "1933 Act") applied. The securities represented by this
certificate have not been registered under the 1933 Act and
may not be sold, transferred or assigned, and the issuer is
not required to give effect to any attempted sale, transfer
or assignment, except (i) pursuant to a current registration
statement under the 1933 Act; (ii) in a transaction
permitted by Rule 144 under the 1933 Act and as to which the
issuer has received reasonably satisfactory evidence of
compliance with the provisions of Rule 144; or (iii) upon
receipt of a legal opinion acceptable to the issuer to the
effect that the transaction does not require registration
under the 1933 Act."
3.2 REPRESENTATIONS OF THE PURCHASER. The Purchaser represents and
warrants that:
(i) It is familiar with Section 4(2) of the 1933 Act and with
Regulation D issued by the Securities and Exchange
Commission ("SEC") pursuant to the 1933 Act.
(ii) It has been furnished before the execution of this
Agreement by the Company with (i) the Company's annual
report to stockholders for fiscal year ended December 31,
1996; (ii) the definitive proxy statement filed in
connection with the Company's annual stockholders' meeting
held on May 5, 1997; (iii) Form 10-K for fiscal year ended
December 30, 1996; and (iv) the Company's Form 10-Q for the
quarter ended March 31, 1997. The Purchaser has made such
further investigation of the Company as was deemed
appropriate and has been given the opportunity to ask
questions of and receive answers from the Company or any
person acting on its behalf concerning the terms and
condition of the transactions contemplated herein and has
obtained such additional information deemed necessary to
verify the accuracy of the information that was obtained by
the Purchaser.
(iii) The Purchaser has access to, and has reviewed and
understood, all material information, including financial
statements, concerning the Company which it deems necessary
or advisable in order to evaluate the risks and merits of
entering into this transaction and acquiring the
Securities.
(iv) The Purchaser has such knowledge and experience in
financial and business matters that it is capable of
evaluating the merits and risks of acquiring the
Securities.
-2-
(v) The Purchaser is an "accredited investor" as that term is
defined in SEC Rule 501(a)(5) because it is a corporation
with total assets in excess of $5,000,000.
(vi) The Purchaser acknowledges that the Securities are being
acquired without any representations and warranties by
Seller, except as provided in Section 1, above.
4. CLOSING. Subject to the terms and conditions contained herein, and
subject to consummation of the transactions called for under the Stock and
Warrant Purchase Agreement among Company, Purchaser and Xxxxxxx X. Xxxxxxx of
even date herewith, the transfer of the Securities by Seller to the Purchaser
("Closing") will take place on the date hereof at the offices of Seller, or such
other date and place as the parties may mutually agree ("Closing Date").
4.1 SELLER'S OBLIGATION. At Closing, Seller shall deliver the
Securities.
4.2 PURCHASER'S OBLIGATION. At Closing, Purchaser shall deliver the
Purchase Price to Seller in immediately available funds.
4.3 COMPANY'S OBLIGATION. At Closing, Company shall issue a replacement
Warrant Agreement and Warrant Certificate to Purchaser for the $7.50 Warrants
transferred to Purchaser by Seller pursuant to this Agreement, such replacement
Warrant Agreement and Warrant Certificate to preserve for Purchaser all rights
to, and under the Warrant Certificate dated May 1, 1995 and the Warrant
Agreement dated May 1, 1995.
5. TERMINATION OF SELLER'S SERVICES. Although Seller is not the
Company's general counsel, Seller has been retained by the Company from time to
time to represent it in various legal matters including, but not limited to,
certain franchisee and litigation matters and for which the Company currently
owes Seller outstanding legal fees and reimbursable expenses in the amount of
$28,869.43, a portion of which are estimated. Seller's legal representation of
the Company on any pending matters is hereby terminated effective immediately,
and Company shall remit to Seller as soon as practicable on Monday, July 21,
1997, the outstanding balance of said legal fees and reimbursable expenses in
immediately available funds as payment in full for all legal services rendered
by Seller to the Company up to and including this date.
6. MUTUAL RELEASES. Except for claims or obligations under this
Agreement, Purchaser, the Company and their respective affiliates, jointly and
severally, forever discharge and release Seller, its current and former
employees, officers, directors and attorneys from any and all rights, claims,
demands, damages, debts, liabilities, accounts, reckonings, liens, attorneys
fees, costs, expenses, actions and causes of every kind and nature whatsoever,
whether in contract, tort, at law or in equity, or otherwise, suspected or
unsuspected, whether currently existing or which may hereafter arise which
Purchaser, the Company or their respective affiliates owns or holds or at
anytime heretofore has ever had, owned or held, or may hold in the future,
related to or arising out of or in any way connected to the Company or the
Securities.
Except for claims or obligations under this Agreement, Seller forever
discharges and releases Purchaser and the Company, and their respective
affiliates, and attorneys, from any and all rights, claims, demands, damages,
debts, liabilities, accounts, reckonings, liens, attorneys fees, costs,
expenses, actions and causes of action of every kind and nature whatsoever,
whether in contract, tort, at law or in equity, or otherwise, suspected or
unsuspected, whether currently existing or which may hereafter arise which
Seller owns or holds, or at any time heretofore has ever had, owned or held, or
may hold in the
-3-
future, related to or arising out of or in any way connected to the Company
or the Securities, including, without limitation, for any services for which
the Securities were initially issued.
It is the intention of the parties hereto that the foregoing release
shall be effective as a bar to all demands, liens, assignments, contracts,
covenants, actions, suits, causes of action, obligations, costs, expenses,
attorneys fees, damages, losses, claims, controversies, judgments, orders and
liabilities of whatsoever character, nature and kind, known or unknown,
suspected or unsuspected and whether or not concealed or hidden, here and above
specified to be so barred; in furtherance of this intention, the parties hereto
expressly, knowingly, and voluntarily waive any and all rights and benefits
conferred upon them by the provisions of Section 1542 of the California Civil
Code, which are as follows:
"A general release does not extend to claims which the creditor does
not know or suspect exist in his favor at the time of executing the
release, which if known by him must have materially affected the
settlement with the debtor."
The parties hereto expressly consent that this release shall be given
full force and effect in accordance with each and all of its express terms and
provisions, relating to unknown and unsuspected claims, demands, causes of
actions, if any, to the same effect as those terms and provisions relating to
any other claims, demands, and causes of action here and above specified.
7. RIGHTS REDEMPTION AND APPROVAL. The Company represents and warrants
that its board of directors has redeemed certain share purchase rights issued
pursuant to the Company's Stockholder Rights Agreement dated as of July 9, 1996
between the Company and the American Securities Transfer Incorporated, as Rights
Agent and has approved of and consented to the transfer of the Securities to the
Purchaser by the Seller.
8. MISCELLANEOUS. The following miscellaneous provisions shall apply to
this Agreement:
8.1 NOTICES. All notices or other communications required or permitted
to be given, pursuant to this Agreement, shall be in writing and shall be deemed
duly given when received if delivered in person or by facsimile transmission,
telex, telegram or cable and confirmed by mail, or mailed by registered or
certified mail (return receipt requested) or express mail, postage prepaid, as
follows:
If to Purchaser: Fidelity National Financial, Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Facsimile No. (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to: Stradling, Yocca, Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Facsimile No. (000) 000-0000
Attention: C. Xxxxx Xxxxxxx
-4-
If to Seller: Xxx Xxxxxx
XxXxxxx, North, Xxxxxx & Xxxxx, X.X.
Xxxxx 0000 Xxx Xxxxxxx Xxxx Xxxxx
000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Facsimile No. (000) 000-0000
If to Company: GB Foods Corporation
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No. (000) 000-0000
Attention:
-------------------------
with a copy to: Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxx & Xxxxxxx
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile No. (000) 000-0000
or at such other address as the party to whom notice is to be
given furnishes in writing to the other party in a manner set
forth above.
8.2 AMENDMENTS AND WAIVERS. This Agreement may not be modified or
amended, except by instruments or instruments in writing, signed by the party
against whom enforcement of such modification or amendment is sought. A party
by an instrument in writing, may waive compliance by the other party with any
terms or provision of this Agreement on the part of such other party to be
performed or complied with. No action taken, pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representation, warranty or agreement contained herein. The waiver by any party
hereto of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach.
8.3 EXPENSES. Whether or not this Agreement shall be consummated, each
party shall pay their own expenses incident to the preparation, execution and
consummation of this Agreement. Purchaser and Seller acknowledge that, other
than Xxxxxx Xxxxxx of Pauli & Company, Incorporated ("Pauli"), no broker or
finder is entitled to any brokerage or finders fees or other commission in
connection with the proposed purchase and sale of the Securities. In the event
the purchase and sale of the Securities is consummated as contemplated herein,
Purchaser and the Company agree that the Company will pay $30,000 to Pauli at
the Closing and the balance of any fee owed to Pauli in connection with this
transaction will be paid by Purchaser.
8.4 ENTIRE AGREEMENT. Except for the letter agreement between Seller and
the Company dated July 16, 1997, this Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral and written, among the
parties hereto with respect to the subject matter hereof.
8.5 APPLICABLE LAW. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Nebraska applicable to contracts made and performed in Nebraska.
-5-
8.6 BINDING EFFECT, BENEFITS. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns; nothing in this Agreement, express or implied, is intended to confer on
any person other than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liability under or by reason of
this Agreement.
8.7 ASSIGNABILITY. Neither this Agreement nor any of the parties' rights
hereunder shall be assignable by any party hereto without the prior written
consent of the other party hereto.
8.8 EFFECT OF HEADINGS. The headings of the various sections and
subsections herein are inserted merely as a matter of convenience and for
reference and shall not be construed as in any manner defining, limiting or
describing the scope or intent to particular sections to which they refer, or as
affecting the meaning or construction of the language in the body of such
sections.
8.9 SEVERABILITY. Any term or provision of this Agreement, which is
invalid or unenforceable in any jurisdiction, shall be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or other provisions of this
Agreement in any other jurisdiction.
8.10 CONSTRUCTION. The language of all parts of this Agreement shall in
all cases be construed as a whole according to its fair meaning, strictly
neither for nor against any party hereto, and without implying a presumption
that the terms thereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be construed more
strictly against the person who himself drafted same. It is hereby agreed that
the representatives of both parties have participated in the preparation hereof.
8.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by facsimile transmitted signatures, each of which shall be
regarded as an original and all of which shall constitute one and the same
instrument.
8.12 TIME OF THE ESSENCE. Time is of the essence of this Agreement. To
the extent the actions called for under this Agreement have not occurred as of
Closing, the parties shall cause them to occur as soon as practicable on
July 21, 1997.
8.13 FURTHER ASSURANCES. At any time and from time to time after Closing,
at any party's request and without further consideration, the other parties
hereto shall execute and deliver such other instruments of sale, transfer,
assignment or confirmation, and take such other actions as the requesting party
may reasonably deem necessary or desirable, in order to more effectively carry
out and implement the provisions and purposes of this Agreement.
-6-
IN WITNESS WHEREOF, Purchaser and Seller have executed this Agreement on
the date first above written.
XXXXXXX, NORTH, XXXXXX & FIDELITY NATIONAL FINANCIAL, INC.
XXXXX, P.C.
By: By:
----------------------- -----------------------
Its: Its:
----------------------- -----------------------
GB FOODS CORPORATION
By:
-----------------------
Its:
-----------------------
