-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U/LIyiCwMEluCUk9ZmfXFKZTInZm3Bh41GYBJ1kIOkgJ2nLwA4JTrVcKoCrfXjP6 dXYGkj9A8gnWhiEDIxUNGQ== /in/edgar/work/0001095811-00-004533/0001095811-00-004533.txt : 20001114 0001095811-00-004533.hdr.sgml : 20001114 ACCESSION NUMBER: 0001095811-00-004533 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN NATIONAL FINANCIAL INC CENTRAL INDEX KEY: 0001068843 STANDARD INDUSTRIAL CLASSIFICATION: [6361 ] IRS NUMBER: 330731548 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24961 FILM NUMBER: 758071 BUSINESS ADDRESS: STREET 1: 1111 E. KATELLA AVENUE, SUITE 220 CITY: IRVINE STATE: CA ZIP: 92867 BUSINESS PHONE: 7142894300 MAIL ADDRESS: STREET 1: 1111 E. KATELLA AVENUE, SUITE 220 CITY: IRVINE STATE: CA ZIP: 92867 10-Q 1 a66735e10-q.txt FORM 10-Q QUARTERLY PERIOD ENDED SEPTEMBER 30,2000 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 2000 Commission File Number 0-24961 AMERICAN NATIONAL FINANCIAL, INC. ------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 33-0731548 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1111 E. Katella Avenue, Suite 220, Orange, California 92867 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (714) 289-4300 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES (X) NO ( ) Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Common stock, no par value, 7,439,937 shares as of November 13, 2000 Exhibit Index appears on page 12 of 12 sequentially numbered pages. 2 FORM 10-Q QUARTERLY REPORT Quarter Ended September 30, 2000 TABLE OF CONTENTS
Part I: FINANCIAL INFORMATION Page Number ----------- Item 1. Condensed Consolidated Financial Statements A. Condensed Consolidated Balance Sheets as of 3 September 30, 2000 and December 31, 1999 B. Condensed Consolidated Statements of Earnings 4 for the three-month and nine-month periods ended September 30, 2000 and 1999 C. Condensed Consolidated Statements of Comprehensive 5 Earnings for the three-month and nine-month periods ended September 30, 2000 and 1999 D. Condensed Consolidated Statements of Cash Flows 6 for the nine-month periods ended September 30, 2000 and 1999 E. Notes to Condensed Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial 8 Condition and Results of Operations Item 3. Quantitative and Qualitative Market Risk Disclosures 11 Part II: OTHER INFORMATION Item 2. Changes in Security 12 Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN NATIONAL FINANCIAL, INC. --------------------------------- (Registrant) By: /s/ Carl A. Strunk ------------------------------------------------ Carl A. Strunk Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) and Director Date: November 13, 2000 2 3 Part I: FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS) ASSETS
SEPTEMBER 30, DECEMBER 31, 2000 1999 -------- -------- (UNAUDITED) Current assets: Cash and cash equivalents ..................................................... $ 7,794 $ 3,361 Short-term investments, at cost, which approximates fair market value ......... 735 1,514 Accrued investment interest ................................................... 174 245 Trade receivables, net of allowance for doubtful accounts of $2,404 in 2000 and $2,097 in 1999 ........................................................... 6,106 4,526 Notes receivables, net ........................................................ 2,187 1,329 Deferred tax asset ............................................................ 2,183 2,082 Income tax receivable ......................................................... -- 1,128 Prepaid expenses and other current assets ..................................... 1,047 995 -------- -------- Total current assets ................................................... 20,226 15,180 Investment securities available for sale, at fair market value ................ 8,556 14,022 Property and equipment, net ................................................... 7,665 7,633 Title plants .................................................................. 2,999 2,377 Deposits with the Insurance Commissioner ...................................... 113 113 Intangibles, net of accumulated amortization of $1,338 in 2000 and $959 in 1999 ............................................................. 11,650 7,999 -------- -------- Total assets ........................................................... $ 51,209 $ 47,324 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and other accrued expenses ................................... $ 5,559 $ 5,506 Customer advances ............................................................. 2,822 1,779 Current portion of long-term debt ............................................. 552 53 Current portion of obligations under capital leases with affiliates ........... 92 67 Current portion of obligations under capital leases with non-affiliates ....... 132 125 Reserve for claim losses ...................................................... 2,392 2,341 Income tax payable ............................................................ 987 -- Due to affiliate .............................................................. 1,738 1,642 -------- -------- Total current liabilities .............................................. 14,274 11,513 Long-term debt ................................................................ 3,579 1,991 Obligations under capital leases with affiliates .............................. 847 602 Obligations under capital leases with non-affiliates .......................... 1,087 1,187 -------- -------- Total liabilities ...................................................... 19,787 15,293 Shareholders' equity: Preferred stock, no par value; authorized 5,000,000 shares; issued and outstanding, none ........................................................ -- -- Common stock, no par value; authorized, 50,000,000 shares; issued and outstanding, 7,375,224 in 2000 and 7,180,495 in 1999 ..................... -- -- Additional paid in capital .................................................... 22,548 21,884 Retained earnings ............................................................. 9,265 10,336 Accumulated other comprehensive loss .......................................... (391) (189) -------- -------- Total shareholders' equity ............................................. 31,422 32,031 -------- -------- Total liabilities and shareholders' equity ............................. $ 51,209 $ 47,324 ======== ========
See accompanying notes to condensed consolidated financial statements 3 4 AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30 ----------------- ----------------- 2000 1999 2000 1999 ------- ------- ------- ------- (UNAUDITED) (UNAUDITED) Revenues: Net title service revenue -- related party ............... $11,201 $12,136 $32,137 $40,855 Escrow fees .............................................. 5,600 6,128 16,142 19,978 Other service charges .................................... 4,513 2,891 11,124 9,772 Investment income ........................................ 248 313 765 642 ------- ------- ------- ------- Total revenues .................................... 21,562 21,468 60,168 71,247 ------- ------- ------- ------- Expenses: Personnel costs .......................................... 13,043 13,436 37,566 41,828 Other operating expenses includes $921 and $954 with affiliate for the three-month periods ended September 30, 2000 and 1999, respectively, and $2,824 and $3,013 with affiliate for the nine-month periods ended September 30, 2000 and 1999, respectively ..... 5,728 5,249 16,703 14,069 Title plant rent and maintenance ......................... 1,407 1,523 3,987 4,705 ------- ------- ------- ------- Total expenses .................................... 20,178 20,208 58,256 60,602 ------- ------- ------- ------- Earnings before income taxes ............................. 1,384 1,260 1,912 10,645 Income taxes ............................................. 567 517 784 4,459 ------- ------- ------- ------- Net earnings ............................................. $ 817 $ 743 $ 1,128 $ 6,186 ======= ======= ======= ======= Basic earnings per share ................................. $ 0.11 $ 0.10 $ 0.15 $ 0.91 ======= ======= ======= ======= Weighted average shares outstanding, basic basis ......... 7,368 7,150 7,303 6,773 ======= ======= ======= ======= Diluted earnings per share ............................... $ 0.11 $ 0.10 $ 0.15 $ 0.91 ======= ======= ======= ======= Weighted average shares outstanding, diluted basis ....... 7,368 7,150 7,303 6,817 ======= ======= ======= ======= Cash dividends per share ................................. $ 0.10 $ 0.10 $ 0.30 $ 0.30 ======= ======= ======= =======
See accompanying notes to condensed consolidated financial statements 4 5 AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------ ------------------- 2000 1999 2000 1999 ---- ----- ------- ------- (UNAUDITED) (UNAUDITED) Net earnings .......................... $817 $ 743 $ 1,128 $ 6,186 Other comprehensive gain (loss) - unrealized gain (loss) on investment, securities available for sale(1) .... (20) (133) (391) (120) ---- ----- ------- ------- Comprehensive earnings ................ $797 $ 610 $ 737 $ 6,066 ==== ===== ======= =======
- ---------- (1) Net of income tax (benefit) of ($12) and ($60), and ($230) and ($55) for the three-month and nine-month periods ended September 30, 2000 and 1999, respectively. See accompanying notes to condensed consolidated financial statements 5 6 AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, -------------------- 2000 1999 ------- -------- (UNAUDITED) Cash flows from operating activities: Net earnings ................................................... $ 1,128 $ 6,186 Adjustments to reconcile net earnings to cash provided by (used in) operating activities: Depreciation and amortization ................................ 1,874 1,738 Loss on sale of investments .................................. 139 -- (Gain) on disposal of property and equipment ................. (194) (5) Changes in: Accounts receivables, net ................................. (833) 1,941 Interest receivable ....................................... 71 (234) Prepaid expenses and other assets ......................... (52) 59 Income taxes receivable (payable) and deferred income taxes 2,147 (3,115) Accounts payable and other accrued expenses ............... 53 (2,581) Reserve for claim loss .................................... 51 195 Due to (from) affiliates .................................. 96 (221) Customer advances ......................................... 1,043 (594) ------- -------- Total cash provided by operating activities .......... 5,523 3,369 ------- -------- Cash flow from investing activities: Purchase of property and equipment ............................. (1,176) (5,679) Additions to notes receivable .................................. (975) (280) Collections on notes receivable ................................ 117 156 Proceeds from sales of investment securities ................... 4,992 -- Purchase of investment securities............................... -- (11,344) Proceeds from sale of property and equipment ................... 194 330 Proceeds from short term investments ........................... 779 -- Acquisitions of subsidiaries, net of cash received ............. (3,140) 1,235 ------- -------- Total cash provided by (used in) investing activities ..... 791 (15,582) ------- -------- Cash flow from financing activities: Borrowings ..................................................... -- 2,080 Repayment of long-term debt .................................... (525) (465) Proceeds from stock options exercised .......................... -- 220 Proceeds from issuance of common stock ......................... 664 9,202 Payments of capital lease obligations .......................... 179 (770) Dividends paid ................................................. (2,199) (1,430) ------- -------- Total cash provided by (used in) financing activities ..... (1,881) 8,837 ------- -------- Increase (decrease) in cash and cash equivalents ............... 4,433 (3,376) Cash and cash equivalents at beginning of period ............... 3,361 10,345 ------- -------- Cash and cash equivalents at end of period ..................... $ 7,794 $ 6,969 ======= ========
See accompanying notes to condensed consolidated financial statements 6 7 AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED) (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, -------------------- 2000 1999 ---- ------ (UNAUDITED) Supplemental disclosure of cash flow information: Cash paid during the year: Interest ................................... $ 125 $ 132 Income taxes ............................... 42 6,583 Non-cash financing activities: Dividend declared and unpaid .................. 733 715 Purchase of subsidiaries: Assets acquired ............................... 5,750 -- Liabilities assumed and debt issued ........... (2,610) -- ------- ------ Net cash used to acquire business ............. $ 3,140 $ -- ======= ======
See accompanying notes to condensed consolidated financial statements 7 8 Notes to Condensed Consolidated Financial Statements Note A - Basis of Financial Statements The financial information included in this report includes the accounts of American National Financial, Inc. and its subsidiaries (collectively, the "Company") and has been prepared in accordance with generally accepted accounting principles and the instructions to Form 10-Q and Article 10 of Regulation S-X. All adjustments, consisting of normal recurring accruals considered necessary for a fair presentation have been included. The Condensed Consolidated Financial Statements for the three-month and nine-month periods ended September 30, 2000 reflect the impact of the current year acquisitions of Chicago Title Insurance Company, Pima County, Arizona operation, Bancserv, Inc., Pioneer Land Title Corporation and Emerald Mortgagee Assistance Company, all of which were accounted for under the purchase accounting method. This report should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Note B - State Banking Department The State Banking Department, State of Arizona ("State Banking Department") delivered their report of Examination of American Title Insurance of Arizona, Inc. (formerly known as Nations Title Insurance of Arizona, Inc.) as of and for the three-year period ending October 31, 1998, on March 4, 1999. The report as forwarded to the Company by State Banking Department indicated that the Company may not have been in compliance with certain State Banking Department Regulations. The State Banking Department provided the Company with an opportunity to present additional information prior to making their final determination as to compliance. The Company subsequently provided additional information to the State Banking Department for review. On September 15, 2000, the Company received notice from the State Banking Department stating the matters detailed in the Report of Examination were complete and required no further response. Note C - Dividends On September 25, 2000, the Company's Board of Directors declared a quarterly cash dividend of $.10 per share, payable on October 23, 2000, to stockholders of record on October 9, 2000. Note D - Employee and Non-Employee Director Stock Purchase Loan Programs In September 1999, the Company's Board of Directors approved the adoption of the American National Financial, Inc. Employee Stock Purchase Loan Plan ("Employee Plan") and the Non-employee director Stock Purchase Loan Program ("Director Program"). The purpose of the Loan Plan and Loan Program is to provide key employees and directors with further incentive to maximize shareholder value. The Company authorized an aggregate of $2.0 million in loans. All loans are full recourse, unsecured and have a five-year term. Interest accrues on the loans at a rate of six and one quarter percent (6 1/4%) per annum due at maturity. Loans may be repaid any time without penalty. The total amount of loans outstanding at September 30, 2000 was $1.9 million to purchase 469,407 shares of the Company's common stock at an average purchase price of $3.98 per share. For the nine-months ended September 30, 2000 all interest on the loans was paid current in cash. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Factors That May Affect Operating Results The statements contained in this report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the Company's expectations, hopes, intentions or strategies regarding the future. 8 9 All forward-looking statements included in this document are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. It is important to note that the Company's actual results could differ materially from those in such forward-looking statements. The reader should consult the risk factors listed from time to time and other information disclosed in the Company's reports on Forms 10-K and filings under the Securities Act of 1933, as amended. Results of Operations Total revenues for the third quarter ended September 30, 2000 increased 1.0% to $21.6 million from $21.5 million in the comparable 1999 period. Total revenues for the nine-month period ended September 30, 2000 decreased 15.4% to $60.2 million from $71.2 million for the same prior year period. The slight increase in total revenues for the three-month period is a result of the increase of revenue from the current year acquisitions of ancillary service companies. The decrease in revenues for the nine-month period ended September 30, 2000 is coincident with interest rate increases caused by actions taken by the Federal Reserve Board beginning in mid-1999. These rate increases have resulted in a significant decline in refinancing transactions, which have impacted the Company's order count and premium volume. Net Title Service Revenue. Net title service revenue decreased $935,000, or 7.7%, and $8.7 million or 21.3%, for the three-month and nine-month periods ended September 30, 2000, respectively, as the result of a decrease in open title orders and the decline in the refinance business. The average fee per file increased to $1,094 in 2000 compared with $919 in the comparable 1999 period. The fee per file increase is indicative of a change in the mix of title orders closing in a refinance market to the higher fee per file resale business. Escrow Fees. Escrow fees for the third quarter of 2000 decreased $528,000, or 8.6% to $5.6 million from $6.1 million in the third quarter of 1999. For the nine months ended September 30, 2000, escrow fees were $16.1 million, a decrease of $3.9 million, or 19.2%, from escrow fees of $20.0 million in the first nine months of 1999. Escrow fees are primarily related to title insurance activity generated by the Company's direct operations. The decrease in escrow fees is primarily the result of market conditions relating to the refinance activity, the recent interest rate increases causing the decrease in closed title orders. Other Service Charges. Other service charges trend closely with the level and mix of business, as well as the performance of certain ancilliary service businesses. Other service charges for the third quarter of 2000 increased $1.6 million, or 55.2% to $4.5 million from $2.9 million in the comparable 1999 period. The increase in the three-month period ended September 30, 2000 can be attributed to the contribution of the recent acquisitions during 2000 and the Company's strategy to strengthen its ancillary service business. Other services charges totaled $11.1 million for the nine-month period ended September 30, 2000, an increase of $1.3 million, or 13.3% from other service charges of $9.8 million for the 1999 period. The Company continues to leverage its core title and escrow businesses and national presence to successfully expand ancillary service businesses. Investment Income. Investment and interest income are primarily a function of securities markets and interest rates. Prior to 1999 the Company primarily invested in interest bearing accounts and certificates of deposits. During 1999 the Company strengthened its balance sheet with the acquisition of National Title Insurance of New York, Inc. ("National"), proceeds from the Initial Public Offering ("IPO") and the shift to a fixed income portfolio. Investment income in the third quarter of 2000 decreased $65,000 or 21.0% to $248,000 from $313,000 in the corresponding 1999 period. The decrease in investment and interest income earned in the third quarter ended September 30, 2000 is primarily the result of liquidation of certain securities available for sale for the purpose of acquisitions. Investment and interest income for the nine-month period ended September 30, 2000 totaled $765,000 compared with $642,000 in the comparable 1999 period, an increase of $123,000 or 19.2%. The Company's operating expenses consist primarily of personnel and other operating expenses, which are incurred as orders are received and processed. Net title service revenue and certain other fees are not recognized as income until the transaction closes. As a result, revenue lags approximately 60-90 days behind expenses and therefore gross margins may fluctuate. 9 10 Personnel Costs. Personnel costs include base salaries, commissions and bonuses paid to employees and are the most significant operating expense incurred by the Company. Personnel costs, as a percentage of total revenue, decreased to 60.5% for the three-month period ended September 30, 2000 compared with 62.6% for the corresponding period in 1999. The decrease in personnel costs as a percentage of revenue for the three-month period ended September 30, 2000 is the result of the Company's attempts to respond as necessary to prevailing market conditions. For the nine-month periods ended September 30, 2000 and 1999, personnel expenses as a percentage of total revenue were 62.4% and 58.7%, respectively. Personnel expenses, as a percentage of revenues, for the nine-month period ended September 30, 2000 increased due to additional staffing costs from the businesses acquired in fiscal year 2000. Personnel costs totaled $13.0 million and $13.4 million for the three-month periods ended September 30, 2000 and 1999, respectively and $37.6 million and $41.8 million for the nine-month periods ended September 30, 2000 and 1999, respectively. These expenses fluctuate with the level of orders opened and closed and the mix of revenue. Other Operating Expenses. Other operating expenses consist of facilities expenses, escrow losses, postage and courier services, data processing expense, general insurance, trade and notes receivable allowance and depreciation. Other operating expense increased as a percentage of total revenue to 26.6% in the three-month period ended September 30, 2000, compared with 24.5% for the corresponding 1999 period. Other operating expenses as a percentage of total revenue increased to 27.8% for the nine-month period ended September 30, 2000 compared with 19.8% for the corresponding 1999 period. The increase in the three and nine-month periods can be attributed to expenses related to the Company's non-title operations, primarily Bancserv, Inc., Emerald Mortgagee Assistance Company and Pioneer Land Title Corporation, which were all acquired in 2000. Other operating expenses totaled $5.7 million and $5.2 million, for the three-month periods ended September 30, 2000 and 1999, respectively. For the nine-month periods ended September 30, 2000 and 1999, other operating expenses totaled $16.7 million and $14.1 million, respectively. In response to market conditions, the Company maintains aggressive cost control programs in order to keep operating expenses consistent with levels of revenue; however, certain fixed costs are incurred regardless of revenue levels, resulting in quarter over quarter and year over year percentage fluctuations. Title Plant Rent and Maintenance Expense. Title plant rent and maintenance expense totaled $1.4 million and $1.5 million for the three-month periods ended September 30, 2000 and 1999, respectively, and $4.0 million and $4.7 million for the nine-month periods ended September 30, 2000 and 1999, respectively. Title plant rent and maintenance expense decreased as a percentage of total revenue to 6.5% from 7.1% in the three-month periods ended September 30, 2000 and 1999, respectively, and remained consistent at 6.6% of total revenues for the nine-month periods ended September 30, 2000 and 1999. The flat year over year comparison in title plant expense is primarily a result of various contract renegotiations within several counties in California and Arizona resulting in maintaining consistent cost reductions for the Company. Income tax expense for the three-month and nine-month periods ended September 30, 2000 and 1999, as a percentage of earnings before income taxes was 41.0% and 41.0%, respectively. Income tax expense for the nine-month periods ended September 30, 2000 and 1999 was 41.0% and 42.0%, respectively. Fluctuations in income tax expense as a percentage of earnings before income taxes is attributable to the effect of state income taxes on the Company's primary subsidiary the wholly-owned underwritten title company and the ancillary service companies; a change in the amount and the characteristics of net income, operating income versus investment income; and the tax treatment of certain items. Liquidity and Capital Resources The Company's current cash requirements include debt service, debt relating to capital leases, personnel and other operating expenses, taxes and dividends on its common stock. The Company believes that all anticipated cash requirements for current operations will be met from internally generated funds. The Company's cash requirements include expenses relating to the development of National Title Insurance of New York, Inc. ("National") business. While the Company presently has in place much of the infrastructure (principally consisting of personnel) that will be used for this development, management believes that additional cash resources will be required. The development of direct sales operations for the expansion of National would require more cash resources than developing these operations using agency relationships. Cash requirements for the development of National are expected to be met from current cash balances and internally generated funds. One source of the Company's funds is distributions from its subsidiaries. As a holding company, the Company may receive cash from its subsidiaries in the form of dividends and as reimbursement for operating and other administrative expenses it incurs. The Company's underwritten title company collects premiums and fees and pays underwriting fees and operating expenses. The underwritten title company is restricted only to the extent of maintaining minimum levels 10 11 of working capital and net worth, but are not restricted by state regulations or banking authorities in their ability to pay dividends and make distributions. National is subject to regulations that restrict its ability to pay dividends or make other distributions of cash or property to its parent company without prior approval from the Department of Insurance of the State of New York. The maximum amount of dividends which can be paid by National to shareholders without prior approval of the Insurance Commissioner is subject to restrictions. No dividends, including any dividends paid in the preceding twelve months, which exceed 10% of the outstanding capital shares can be paid without prior approval unless after deducting dividends the Company has surplus to policyholders at least equal to the greater of 50% of its reinsurance reserves or 50% of the minimum capital required. Additionally, dividends are further limited to the Company's earned surplus. The Company's other subsidiary operations collect revenue and pay operating expenses; however, they are not regulated by insurance regulatory or banking authorities. Positive cash flow from the underwritten title companies and other subsidiary operations is invested primarily in cash and cash equivalents. In December 1998, the Company entered into an agreement to purchase a home office building in Orange, CA for $2.6 million. On April 14, 1999 the Company completed the purchase of the home office building. The Company financed $2.1 million, secured by a first trust deed. At September 30, 2000 the remaining obligation on the note payable is $2.0 million. The terms of the note require monthly interest payments at prime and monthly principal payments of $4,000. The note matures on April 1, 2004. Year 2000 Our operational and financial systems successfully handled the transition into Year 2000. All operations were fully functional on January 1, 2000. No communication interruptions were identified with any customers or vendors. Although no Y2K related problems are anticipated, we are continuing to monitor all systems throughout the first quarter 2001. Item 3. Quantitative and Qualitative Market Risk Disclosures The Company's Consolidated Balance Sheets includes a substantial amount of assets and liabilities whose fair values are subject to market risks. The following sections address the significant market risks associated with the Company's financial activities for the nine-month period ended September 30, 2000. Interest Rate Risk The Company's fixed maturity investments and borrowings are subject to interest rate risk. Increases and decreases in prevailing interest rates generally translate into decreases and increases in fair values of those instruments. Additionally, fair values of interest rate sensitive instruments may be affected by the creditworthiness of the issuer, prepayment options, relative values of alternative investments, the liquidity of the instrument and other general market conditions. Equity Price Risk The carrying values of investments subject to equity price risks are based on quoted market prices or management's estimates of fair value as of the balance sheet date. Market prices are subject to fluctuation and, consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. Fluctuation in the market price of a security may result from perceived changes in the underlying economic characteristics of the investee, the relative price of alternative investments and general market conditions. Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold. 11 12 Part II: OTHER INFORMATION Item 2. Changes in Securities The following table sets forth the range of high and low closing prices for the common stock on the NASDAQ Stock Exchange High Low ---- --- January 1, 2000 through November 9, 2000: $3.94 $2.68 On November 8, 2000, the last reported sale price of the common stock on the NASDAQ Stock Exchange was $2.88 per share. As of November 11, 2000, the Company had less than 800 shareholders of record. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: Exhibit 10.19 Asset Purchase Agreement dated July 25, 2000 by and among American National Financial, Inc. and Chicago Title Insurance Company Exhibit 11 Computation of Basic and Diluted Earnings Per Share Exhibit 27 Financial Data Schedule - September 30, 2000 (included with electronic filing only) (b) Reports on Form 8-K: None. 12 EX-10.19 2 a66735ex10-19.txt EXHIBIT 10.19 1 EXHIBIT 10.19 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into as of July 25, 2000, by and among AMERICAN NATIONAL FINANCIAL, INC., a California corporation ("Buyer") and CHICAGO TITLE INSURANCE COMPANY, a Missouri corporation ("Seller"). RECITALS WHEREAS, out of its office located in Tucson, Arizona (the "Office"), Seller is engaged in the business of providing title insurance within the area of Pima County, Arizona (the "Business"); and WHEREAS, Seller desires to sell and transfer to Buyer and Buyer desires to purchase from Seller, substantially all of the assets of the Business, upon the terms and subject to the conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the premises, mutual covenants, agreements, representations and warranties contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller, intending to be legally bound, hereby agree as follows: ARTICLE 1 PURCHASE AND SALE 1.01 PURCHASE AND SALE OF ASSETS. At the Closing (as hereinafter defined), and subject to the terms and conditions of this Agreement, Seller hereby agrees to sell, transfer, convey, assign and deliver to Buyer, and Buyer agrees to purchase and acquire from Seller, the following assets of Seller (collectively, the "Purchased Assets"): (a) Escrow Inventory/Assigned Contracts. All of Seller's right, title and interest in and to Seller's contracts, agreements, commitments and understandings to perform escrow services for escrows which have not yet closed as of the Closing Date and which have originated in the Office (the "Assigned Contracts"); (b) Fixed Assets. All of Seller's right, title and interest to the supplies, computers, printers, equipment, furniture, fixtures specifically listed on Schedule 1.01(b) hereto (collectively, the "Fixed Assets"); and (c) Client Files. All of Seller's right, title and interest to customer information assembled and compiled in the course of the operation of the Business, 2 specifically, and to the extent available, financial and account servicing files on all the customers of Seller related to the Business (the "Client Files"). 1.02 EXCLUDED ASSETS. The Purchased Assets shall include only the assets expressly listed in Section 1.01 and shall not include any other assets of Seller of any kind. 1.03 ASSUMPTION OF LIABILITIES. At the Closing, Buyer shall assume, discharge and become liable only for (i) those executory obligations arising after the Closing Date under the Purchased Assets and (ii) those obligations set forth on Schedule 1.03 (collectively, the "Assumed Liabilities"). The Assumed Liabilities shall not include any obligations or liabilities arising out of any act or omission or default of Seller under any Assigned Contract regardless of when such obligation is asserted. Except as set forth herein, Buyer shall not assume, or in any way be responsible for any obligations of Seller. 1.04 RETAINED LIABILITIES. Except for the Assumed Liabilities, Seller agrees that Buyer shall not be obligated to assume or perform and is not assuming or performing, and Seller shall remain responsible for, any liabilities or obligations of Seller, whether known or unknown, fixed or contingent, certain or uncertain, and regardless of when such liabilities or obligations may arise or may have arisen or when they are or were asserted (the "Retained Liabilities"). 1.05 SUBLEASES. At the Closing, Seller and Buyer shall enter into subleases (the "Subleases") for the properties set forth on Schedule 1.05, with the primary terms for each Sublease set forth on Schedule 1.05. - 2 - 3 ARTICLE 2 CASH AND FIDUCIARY ASSETS 2.01 CASH AND OTHER FIDUCIARY ASSETS. At Closing, Seller will assign to Buyer all of its right, title and interest in bank accounts and other accounts (the "Fiduciary Accounts") in which any funds, property, investments, documents or other property are being held by Seller in a fiduciary capacity for the benefit of any person (the "Fiduciary Assets") relating to the Assigned Contracts. The Fiduciary Assets and Fiduciary Accounts are described in Schedule 2.01 to this Agreement, and include, without limitation, all fiduciary funds and fiduciary property connected to the Business. Seller shall execute any document reasonably requested by Buyer to evidence the assignment made in this Article. At Closing, Seller shall deliver to Buyer in immediately available funds the amount shown as "Escrow Ledger Balance" on Schedule 2.01, and any other documents necessary to transfer to Buyer the Fiduciary Assets and the Fiduciary Accounts, and Buyer will have sole control over the Fiduciary Accounts and Fiduciary Assets from and after the Closing Date. ARTICLE 3 PURCHASE PRICE 3.01 PURCHASE PRICE. The purchase price (the "Purchase Price") to be paid by Buyer to Seller for the Purchased Assets shall be One Hundred Thousand Dollars ($100,000), which shall be paid at Closing to Seller in cash or via wire transfer in immediately available funds. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents and warrants to Buyer as follows: 4.01 ORGANIZATION AND STANDING. Seller is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted or proposed to be conducted. 4.02 CORPORATE AUTHORITY. Seller has the corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated by this Agreement in accordance with the terms of this Agreement. 4.03 CORPORATE AUTHORIZATION. Seller has taken all necessary corporate actions to authorize and approve the execution, delivery and performance of this Agreement and the transactions contemplated by this Agreement. This Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. - 3 - 4 4.04 REQUIRED CONSENTS. Except as set forth on Schedule 4.04, no consents or approvals of any governmental body or authority and no consents or waivers from any other parties to leases, licenses, franchises, permits, indentures, agreements or other instruments are required for the lawful consummation by Seller of the transactions contemplated by this Agreement. 4.05 TITLE. Seller has good and marketable title to the Fixed Assets, free and clear of all mortgages, liens, security interests and similar encumbrances. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents and warrants to Seller as follows: 5.01 ORGANIZATION AND STANDING. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and has all requisite corporate power and authority to own its properties and assets and to conduct its business as now conducted or proposed to be conducted. 5.02 CORPORATE AUTHORITY. Buyer has the corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated by this Agreement in accordance with the terms of this Agreement. 5.03 CORPORATE AUTHORIZATION. Buyer has taken all necessary corporate actions to authorize and approve the execution, delivery and performance of this Agreement and the transactions contemplated by this Agreement. This Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. 5.04 REQUIRED CONSENTS. No consents or approvals of any governmental body or authority and no consents or waivers from any other parties to leases, licenses, franchises, permits, indentures, agreements or other instruments are required for the lawful consummation by Seller of the transactions contemplated by this Agreement. ARTICLE 6 COVENANTS OF SELLER AND BUYER Seller and Buyer each covenant with the other as follows: 6.01 THE CLOSING. The closing of the sale and purchase of the Purchased Assets (the "Closing") will take place at the corporate offices of Seller, located at 4050 Calle Real, Santa Barbara, California 93110, at 10:00 a.m. local time on September 1, 2000 (the "Closing Date") or such other time and place as Seller and Buyer may agree. - 4 - 5 6.02 SUBLEASES. Buyer and Seller shall negotiate and execute the Subleases, which shall include the terms set forth on Schedule 1.05, as well as other customary and usual terms and conditions for commercial subleases. Buyer and Seller shall also cooperate to obtain all required consents necessary for the Subleases. 6.03 TITLE PLANT LEASE AGREEMENT/RIGHT OF FIRST REFUSAL. Buyer and Seller shall negotiate and execute a Lease Agreement pursuant to which Seller shall lease Buyer all of Seller's right, title and interest in and to Seller's title plant and/or title plant interest, including all records, files, data and related assets (collectively, the "Title Plant") (the "Lease Agreement"). Among other things, the Lease Agreement shall provide: (a) for a term of ten (10) years; (b) for total payments of Five Hundred Thousand Dollars ($500,000); (c) for the initial payment of Four Thousand One Hundred Sixty Six Dollars and 67/100 ($4,166.67) to be due at Closing; (d) for a One Dollar ($1.00) option to purchase the Title Plant at any time during the term of the Lease Agreement, provided all other payments due under the Lease Agreement and the Access Agreement (as defined below) have been paid; (e) that if Buyer does purchase the Title Plant from Seller, Buyer shall grant Seller a right of first refusal to purchase the Title Plant back from Buyer at a purchase price equal to or greater to any offer Buyer received (excluding any offers by any affiliate of Buyer; and (f) that at such time as all monies due Seller under the Lease Agreement are paid by Buyer, the Access Agreement shall be terminated. 6.04 ACCESS AGREEMENT. Buyer and Seller shall negotiate and execute an Access Agreement, pursuant to which Seller shall grant Buyer access to the Title Plant for a monthly access fee (for access to the Title Plant) of One Thousand Dollars ($1,000) per month for a period of ten (10) years (the "Access Agreement"). 6.05 ISSUING AGENCY CONTRACT. Buyer and Seller shall negotiate and execute an Issuing Agency Contract whereby Buyer shall issue the title assurances of Seller, or its title underwriting affiliates, and no other title insurance company or underwriter (the "Agency Agreement"). Among other things, the Agency Agreement shall provide that: (a) for a term concurrent with the Issuing Agency Agreement between Buyer and Fidelity National Financial, Inc. ("FNF"), which expires July 1, 2007; (b) Buyer shall be liable for the first Five Thousand Dollars ($5,000) of any loss sustained or incurred by Seller as a result of the issuances of any title assurance by Buyer pursuant to the Agency Agreement; (c) the division of premium shall be eighty-eight percent (88%) to Buyer and - 5 - 6 twelve percent (12%) to Seller, subject to the following: one percent (1%) of the gross title insurance premium, from Seller's share thereof, shall be paid to Fidelity National Title Insurance Company ("Fidelity") for back office support and/or work services performed. Example: for each transaction, Buyer shall retain eighty-eight percent (88%) of the gross title insurance premium; CTI shall receive eleven percent of the gross title insurance premium after one percent (1%) is paid to Fidelity; and (d) during the term of the Agency Agreement, all national referral business generated by Seller for Pima County, Arizona will be non-exclusive to Buyer. 6.06 LICENSE AGREEMENT. Buyer and Seller shall negotiate and execute a software license agreement (the "License Agreement") pursuant to which Seller shall provide to Buyer: (i) the TEAM Software System ("TEAM") and/or (ii) the Sierra Office Software ("Sierra"). The Sierra and TEAM licenses, and initial training for the use of the related software, shall be provided at no expense to Buyer. However, Buyer shall bear the expense for the annual maintenance fee and for training support beyond the initial training for the all licensed software. 6.07 CONFIDENTIALITY. All information concerning the terms of this Agreement shall be kept confidential by each party, its attorneys, accountants and representatives. All information furnished by one party to the other in connection with this Agreement or the transactions contemplated by this Agreement shall be kept confidential by such other party (and shall be used by it and its officers, attorneys, accountants and representatives only in connection with this Agreement and the transactions contemplated by this Agreement) except to the extent that such information (i) already is known to such other party when received, (ii) thereafter becomes lawfully obtainable from other sources, (iii) is required to be disclosed in any document filed by Seller or its affiliate with the Securities and Exchange Commission or any other agency of any government, (iv) is otherwise required to be disclosed pursuant to any federal or state law, rule or regulation or by any applicable judgment, order or decree of any court or by any governmental body or agency having jurisdiction after such other party has given reasonable prior written notice to the other parties to this Agreement of the pending disclosure of any such information, or (v) is required to be disclosed to a parties investors or sources of financing who agree to hold such information in confidence. In the event that the transactions contemplated by this Agreement shall fail to be consummated, each party shall promptly cause all copies of documents or extracts thereof containing information and data as to another party to be returned to such other party. - 6 - 7 6.08 SELLER'S PHONE NUMBER. If reasonably possible, after the Closing, Buyer shall be permitted to use the existing phone number(s) of the Office. Seller shall use its best efforts to help facilitate the use of the existing phone number(s) by, and for the benefit of, Seller. 6.09 DOCUMENT RETENTION. After Closing Buyer shall maintain and store the following documents for that period of time necessary to ensure compliance by Seller and/or Buyer with federal and/or state law, including, but not limited to, requirements promulgated by the Arizona Department of Insurance, the Arizona Banking Department or any other applicable administrative authority: escrow and title files; account servicing files and any personnel or other administrative files. 6.10 STARTER EXCHANGE PROGRAM. After Closing, Buyer shall support and participate in the Starter Exchange Program (the "Program") upon such terms to be mutually agreed upon. For purposes of this Agreement, the Program shall mean cooperation in the current method of exchange of starters among Chicago Title, American Title, Fidelity National Title, Ticor Title and Security Union Title and cooperation in future updates and improvements in the Program. ARTICLE 7 CONDITIONS PRECEDENT TO CLOSING 7.01 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER. The obligations of Buyer to effect the purchase of the Purchased Assets from the Seller shall be subject to fulfillment or waiver at or prior to the Closing Date of the following conditions: (a) Representations and Warranties. The representations and warranties of Seller set forth in Article 4 of this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date (as though made on and as of the Closing Date) except (i) to the extent such representations and warranties are by their expressed provisions made as of a specified date and (ii) for the effect of transactions contemplated by this Agreement. (b) Performance of Obligations. Seller shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date. (c) Closing Deliveries. Buyer shall have received the following deliveries from Seller: (i) Subleases. The Subleases, duly executed by Seller. (ii) The Lease Agreement. The Lease Agreement, duly executed by Seller. (iii) The Access Agreement. The Access Agreement duly, executed by Seller. - 7 - 8 (iv) The Agency Agreement. The Agency Agreement duly, executed by Seller. (v) The License Agreement. The License Agreement duly, executed by Seller. (vi) Bill of Sale. A bill of sale, assignment and assumption agreement conveying ownership of the Purchased Assets in the form attached hereto as Exhibit A (the "Bill of Sale"), duly executed by Seller. (vii) Other Documents. Such other documents as shall be reasonably requested by Buyer and its counsel or required to be delivered pursuant to this Agreement. 7.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. The obligations of Seller to effect the sale of the Purchased Assets to the Buyer at the Closing shall be subject to the fulfillment or waiver at or prior to the Closing Date of the following conditions: (a) Litigation. Neither Seller nor Buyer shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction that enjoins or prohibits the consummation of the transactions contemplated by this Agreement. (b) Representations and Warranties. The representations and warranties of Buyer set forth in Article 5 of this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date (as though made on and as of the Closing Date) except (i) to the extent such representations and warranties are by their expressed provisions made as of a specified date and (ii) for the effect of transactions contemplated by this Agreement. (c) Performance of Obligations. Buyer shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date. (d) Closing Deliveries. Buyer shall have received the following from Seller or such other party(ies): (i) Subleases and related consents. The Subleases, duly executed by Buyer, as well as all related and necessary consents for the Subleases. (ii) The Lease Agreement. The Lease Agreement, duly executed by Buyer. (iii) The Access Agreement. The Access Agreement, duly executed by Buyer. (iv) The Agency Agreement. The Agency Agreement, duly executed by Buyer. - 8 - 9 (v) The License Agreement. The License Agreement, duly executed by Buyer. (vi) The Bill of Sale. The Bill of Sale, duly executed by Buyer. (vii) Other Documents. Such other documents as shall be reasonably requested by Buyer and its counsel or required to be delivered pursuant to this Agreement. (viii) The Purchase Price. The Purchase Price in cash or wire transfer in immediately available funds. ARTICLE 8 TERMINATION 8.01 METHODS OF TERMINATION. This Agreement may be terminated and the transactions herein contemplated may be abandoned at any time prior to the Closing: (a) By the Buyer, up until 5:00 p.m. on July 28, 2000, for any reason resulting from its business, legal and accounting due diligence with respect to the Business and the Purchased Assets. (b) By mutual written consent of Buyer and Seller; (c) By the Buyer, if there has been a material breach by Seller of any of its respective material representations, warranties, agreements or covenants set forth herein, or a failure of any condition to which the obligations of the Buyer are subject; or (d) By Seller, if there has been a material breach by the Buyer of any of its representations, warranties, agreements or covenants set forth herein, or a failure of any condition to which the obligations of Seller are subject. 8.02 PROCEDURE UPON TERMINATION. In the event of termination of this Agreement by Buyer or Seller or by both Buyer and Seller pursuant to Section 8.01 hereof, written notice thereof shall forthwith be given to the other party hereto and the transactions contemplated herein shall be abandoned without further action by Buyer or Seller. In addition, if this Agreement is terminated as provided herein: (a) Each party will redeliver all documents, workpapers and other material of any other party relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the party furnishing the same. (b) All information of a confidential nature received by any party hereto with - 9 - 10 respect to the business of any other party (other than information which is a matter of public knowledge or which has heretofore been or is hereafter published in any publication for public distribution or filed as public information with any governmental authority) shall continue to be subject to the provisions of the Confidentiality Agreement. (c) Upon any termination of this Agreement pursuant to this Article 8, the respective obligations of the parties hereto under this Agreement shall terminate and no party shall have any liability whatsoever to any other party hereto by reason of such termination, irrespective of the cause of such termination, except as set forth in this Article 8. ARTICLE 9 MISCELLANEOUS 9.01 BINDING EFFECT. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns. 9.02 COUNTERPARTS. This Agreement may be executed in any number of counterparts each of which shall be an original, but such counterparts shall together constitute one and the same instrument. 9.03 GOVERNING LAW. This Agreement shall be construed in accordance with the laws of the State of California without regard to any applicable conflicts of law. 9.04 EXPENSES. Except as otherwise herein provided, each of the parties shall pay its respective costs and expenses incurred or to be incurred by it in connection with the negotiations respecting this Agreement and the transactions contemplated by this Agreement, including preparation of documents, obtaining any necessary approvals and the consummation of the other transactions contemplated by this Agreement. 9.05 ASSIGNMENT. This Agreement shall only be assignable with the written consent of the other party. 9.06 ENTIRE AGREEMENT. This Agreement, together with the exhibits and schedules hereto, contains the entire agreement among the parties with respect to the transactions contemplated by this Agreement and supersedes all other prior agreements, understandings and letters related to this Agreement. 9.07 NOTICES. Any notice or other communications required or permitted by this Agreement shall be in writing and shall be deemed to have been duly given on the date mailed if mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to Seller, to: Chicago Title Insurance Corporation 4650 Calle Real Santa Barbara, California 93110 Attention: Tom Evans, Jr. - 10 - 11 (b) if to Buyer, to: American National Financial, Inc. 1111 E. Katella Avenue, Suite 220 Orange, California 92867 Attention: Dennis Duffy 9.08 AMENDMENT. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. 9.09 SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement, whether in whole or in part, shall not in any way affect the validity and/or enforceability of any other provision of this Agreement. Any invalid or unenforceable provisions shall be deemed severable to the extent of any such invalidity or unenforceability. 9.10 CONSENT TO EXCLUSIVE JURISDICTION AND VENUE. The parties hereto each hereby consents to personal jurisdiction and venue in the Superior Court of the State of California for Orange County, California for any action brought by any party arising out of the breach or threatened breach of this Agreement. The parties each agree that any action arising out of or related to this covenant shall be brought only and exclusively in the Superior Court of the State of California for Orange County, California. 9.11 COSTS OF ENFORCEMENT. In the event any arbitration or litigation is brought to enforce any provision of this Agreement, the prevailing party shall be entitled to recover its reasonable costs and expenses of such arbitration or litigation, including reasonable fees and disbursements of counsel (both at trial and in appellate proceedings). - 11 - 12 IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be executed by their respective duly authorized representatives as of the day and year first above written. "SELLER" CHICAGO TITLE INSURANCE CORPORATION By: ------------------------------------ Name: Title: "BUYER" AMERICAN NATIONAL FINANCIAL, INC. By: ------------------------------------ Name: Title: - 12 - 13 SCHEDULE 1.01(b) FIXED ASSETS [TO FOLLOW] 14 SCHEDULE 1.03 ASSUMED LIABILITIES 1. The Assumed Liabilities shall include all equipment leases associated with the Purchased Assets. [MORE TO FOLLOW] 15 SCHEDULE 1.05 SUBLEASES 1. Buyer and Seller shall enter into a sublease relating to Seller's real property lease for the premises described as _________________ (the "Main Office Sublease"). The Main Office Sublease shall provide for terms and conditions identical to those set forth in the existing lease. 2. Buyer and Seller shall enter into a sublease relating to Seller's real property lease for the premises described as _________________ (the "______ Sublease"). The ______Sublease shall provide for terms and conditions identical to those set forth in the existing lease. 3. Buyer and Seller shall enter into a sublease relating to Seller's real property lease for the premises described as _________________ (the "______ Sublease"). The ______Sublease shall provide for terms and conditions identical to those set forth in the existing lease. 4. Buyer and Seller shall enter into a sublease relating to Seller's real property lease for the premises described as _________________ (the "______ Sublease"). The ______Sublease shall provide for terms and conditions identical to those set forth in the existing lease. 5. Buyer and Seller shall enter into a sublease relating to Seller's real property lease for the premises described as _________________ (the "______ Sublease"). The ______Sublease shall provide for terms and conditions identical to those set forth in the existing lease. 16 SCHEDULE 2.01 FIDUCIARY ASSETS AND FIDUCIARY ACCOUNTS [TO FOLLOW] 17 SCHEDULE 4.04 REQUIRED CONSENTS 1. Consents for the Subleases by the landlords of the related properties. 18 EXHIBIT A BILL OF SALE [TO FOLLOW] EX-11 3 a66735ex11.txt EXHIBIT 11 1 EXHIBIT 11 AMERICAN NATIONAL FINANCIAL, INC. AND SUBSIDIARIES COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------- ---------------- 2000 1999 2000 1999 ------ ------ ------ ------ Net earnings, basic basis ......... $ 817 $ 743 $1,128 $6,186 ====== ====== ====== ====== Weighted average basic shares ..... 7,368 7,150 7,303 6,773 ------ ------ ------ ------ Basic earnings per share .......... $ 0.11 $ 0.10 $ 0.15 $ 0.91 ====== ====== ====== ====== Diluted net earnings .............. $ 817 $ 743 $1,128 $6,186 ====== ====== ====== ====== Weighted average shares outstanding during the period, basic basis .. 7,368 7,150 7,303 6,773 Effect of dilutive options ........ -- -- -- 44 ------ ------ ------ ------ Weighted average shares outstanding during the period, diluted basis 7,368 7,150 7,303 6,817 ====== ====== ====== ====== Diluted earnings per share ........ $ 0.11 $ 0.10 $ 0.15 $ 0.91 ====== ====== ====== ======
EX-27 4 a66735ex27.txt FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 8,529 8,880 8,510 2,404 0 20,093 11,348 3,683 51,400 14,274 0 0 0 0 31,613 51,400 60,168 60,168 0 58,256 0 0 0 1,912 784 0 0 0 0 1,128 .15 .15
-----END PRIVACY-ENHANCED MESSAGE-----