AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
AMERICAN NATIONAL FINANCIAL, INC.
(formerly ATC HOLDINGS, INC.)
AND
FIDELITY NATIONAL FINANCIAL, INC.
AUGUST 21, 1998
TABLE OF CONTENTS
PAGE
1. Exchange of the Shares. . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Deliveries by Fidelity . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Deliveries by ANFI . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Representations and Warranties Concerning the Exchange. . . . . . . . . 2
3.1 Representations and Warranties of the Fidelity . . . . . . . . . . 2
3.2 Representations and Warranties of ANFI . . . . . . . . . . . . . . 4
4. Pre-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Notices and Consents . . . . . . . . . . . . . . . . . . . . . . . 5
4.3 Notice of Developments . . . . . . . . . . . . . . . . . . . . . . 5
5. Post-Closing Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.2 Fidelity Cooperation with Initial Public Offering of ANFI. . . . . 5
6. Conditions to Obligation to Close . . . . . . . . . . . . . . . . . . . 6
6.1 Conditions to Obligation of Fidelity . . . . . . . . . . . . . . . 6
6.2 Conditions to Obligation of ANFI . . . . . . . . . . . . . . . . . 6
7. General Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.1 Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.2 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7.4 Governing Law; Arbitration . . . . . . . . . . . . . . . . . . . . 8
7.5 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . 8
7.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.8 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.9 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . 9
7.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT") is entered
into as of August 21, 1998, by and between AMERICAN NATIONAL FINANCIAL, INC.
(formerly known as "ATC Holdings, Inc."), a California corporation ("ANFI"), and
FIDELITY NATIONAL FINANCIAL, INC., a Delaware corporation ("FIDELITY"). ANFI
and Fidelity are sometimes referred to collectively herein as the "PARTIES."
R E C I T A L S
A. ANFI and Fidelity are the record and beneficial owners of eighteen
hundred (1,800) shares and twelve hundred (1,200) shares of common stock,
respectively, of American Title Company, a California corporation ("ATC"), which
shares together represent 100% of the currently outstanding shares of ATC.
B. The authorized capital stock of ANFI consists of fifty million
(50,000,000) shares of common stock and five million (5,000,000) shares of
preferred stock of which two million eight hundred seventeen thousand one
hundred (2,817,100) shares of common stock have been validly issued and are
currently outstanding, after giving effect to a 6.0528 for one stock split
effected on or about August 20, 1998 (the "STOCK SPLIT").
C. ANFI and Fidelity each desire to change their respective ownership
interests in ATC through the exchange of the twelve hundred shares of ATC common
stock owned by Fidelity (the "ATC SHARES") in consideration for the issuance to
Fidelity of two million ninety-nine thousand nine hundred ninety-six (2,099,996)
shares of common stock (after giving effect to the Stock Split) of ANFI (the
"ANFI SHARES") upon the terms and conditions set forth herein. Such transaction
shall hereinafter be referred to as the "EXCHANGE." The ATC Shares and the ANFI
Shares shall sometimes collectively be referred to herein as the "SHARES."
D. Upon consummation of the Exchange, ANFI will own 100% of the
outstanding common stock of ATC. Fidelity will own approximately 42.708% of the
outstanding common stock of ANFI and will cease to have any ownership interest
in ATC.
E. The Exchange is intended to be a tax-free reorganization pursuant to
Section 368(a)(1) (B) of the Internal Revenue Code (the "CODE").
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing recitals, and of the
mutual representations, warranties, covenants and agreements contained herein,
the Parties hereto agree as follows:
1. EXCHANGE OF THE SHARES.
At the Closing, Fidelity shall transfer and assign to ANFI the ATC Shares
representing forty percent (40%) of the total outstanding shares of ATC common
stock outstanding, and ANFI shall issue to Fidelity the ANFI Shares, which shall
represent, after giving effect to such issuance, approximately 42.708% of the
total issued and outstanding shares of ANFI.
2. CLOSING.
2.1 TIME. The consummation of the Exchange contemplated herein (the
"CLOSING") will take place at the offices of counsel to ANFI, Rutan & Tucker,
LLP located at 611 Anton Boulevard, Suite 1400, Costa Mesa, California, at 10:00
a.m. (local time) on the business day immediately following the date that
approval of the Exchange is received from the California Department of Insurance
(the "DOI APPROVAL"), or at such other time and place as the parties may agree.
Failure to consummate the Exchange provided for in this Agreement on the date
and time and at the place determined pursuant to this SECTION 2.1 will not
result in the termination of this Agreement and will not relieve any party of
any obligation under this Agreement.
2.2 DELIVERIES BY FIDELITY. Concurrently with the Closing, Fidelity shall
deliver to ANFI stock certificates representing the twelve hundred (1,200) ATC
Shares duly endorsed for transfer or with duly executed stock powers attached.
2.3 DELIVERIES BY ANFI. Concurrently with the Closing, ANFI shall deliver
to Fidelity stock certificate(s) representing two million ninety-nine thousand
nine hundred ninety-six (2,099,996) ANFI Shares. All such stock certificates
shall bear any legend required by law to be set forth thereon.
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE EXCHANGE.
3.1 REPRESENTATIONS AND WARRANTIES OF THE FIDELITY. Fidelity represents
and warrants to ANFI that the statements contained in this SECTION 3.1 are
correct and complete as of the date of this Agreement and shall be complete and
correct as of the Closing.
3.1.1 ORGANIZATION OF FIDELITY. Fidelity is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
3.1.2 AUTHORIZATION OF TRANSACTION. Fidelity has full power and
authority to execute and deliver this Agreement and to perform Fidelity's
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of Fidelity, enforceable in accordance with its terms
and conditions subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law). With the
exception of obtaining DOI Approval, Fidelity need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
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3.1.3 NONCONTRAVENTION. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which Fidelity is
subject, or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to
which Fidelity is a party or by which Fidelity is bound (with the exception
of obtaining DOI Approval).
3.1.4 ATC SHARES. Fidelity holds of record and owns beneficially,
and at the Closing shall transfer to ANFI, twelve hundred (1,200) ATC
Shares, free and clear of any restrictions on transfer (other than any
restrictions under the Securities Act of 1933, as amended and any state
securities laws), taxes, security interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands. Fidelity is
not a party to any option, warrant, purchase right, or other contract or
commitment that could require Fidelity to sell, transfer, or otherwise
dispose of any ATC Shares other than pursuant to this Agreement.
3.1.5 INVESTMENT INTENT. The ANFI Shares being acquired by
Fidelity are being purchased for investment for Fidelity's own account and
not with the view to, or for resale in connection with, any distribution or
public offering thereof. Fidelity understands that the ANFI Shares have
not been registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT") or any state securities laws and that the reliance of
ANFI and others upon exemptions from registration requirements is
predicated in part upon this representation by Fidelity. Fidelity further
understands that the ANFI Shares may not be transferred or resold without
(i) registration under the Securities Act and any applicable state
securities laws, or (ii) an exemption from the registration requirements of
the Securities Act and applicable state securities laws. Fidelity hereby
represents that it qualifies as an "accredited investor" as defined in Rule
501(a) of Regulation D promulgated under the Securities Act. Fidelity
further represents that it (a) is able to bear the loss of its entire
investment in the ANFI Shares and (b) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits
and risks of the investment to be made by it pursuant to this Agreement.
3.1.6 ACCESS TO INFORMATION. Fidelity has been provided (i)
access to the books and records of ANFI, (ii) the opportunity to ask
questions of ANFI concerning the terms and conditions of its investment and
the financial condition of ANFI, and (iii) the opportunity to obtain
additional information (to the extent that ANFI possessed such information
or could acquire it without unreasonable effort or expense) necessary to
verify the accuracy of any information furnished to Fidelity or to which it
had access.
3.1.7 LEGEND. Fidelity understands and agrees that the following
legend will be placed on the certificates and instruments representing the
ANFI Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
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AS AMENDED (THE "ACT") AND MAY NOT BE PLEDGED, HYPOTHECATED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT, OR UNLESS THE CORPORATION
HAS RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE
CORPORATION, THAT SUCH REGISTRATION IS NOT REQUIRED.
The certificates representing the ANFI Shares will also bear any legend
required by the laws of any state which has jurisdiction over the offering
represented by the terms of this Agreement.
3.2 REPRESENTATIONS AND WARRANTIES OF ANFI. ANFI represents and warrants
to Fidelity that the statements contained in this SECTION 3.2 are correct and
complete as of the date of this Agreement and shall be complete and correct as
of the Closing.
3.2.1 ORGANIZATION OF ANFI. ANFI is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction
of its incorporation.
3.2.2 AUTHORIZATION OF TRANSACTION. ANFI has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of ANFI,
enforceable in accordance with its terms and conditions subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law). With the exception of obtaining DOI Approval, ANFI need
not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
3.2.3 NONCONTRAVENTION. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which ANFI is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which ANFI is a party or by which it is
bound or to which any of its assets is subject (with the exception of
obtaining DOI Approval).
3.2.4 CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of ANFI consists of fifty million (50,000,000)
shares of common stock, no par value, of which two million eight hundred
seventeen thousand one hundred (2,817,100) shares are issued and
outstanding, and five million (5,000,000) shares of preferred stock, of
which no shares are outstanding. Upon consummation of the Exchange, four
million nine hundred seventeen thousand ninety-six (4,917,096) shares of
common stock of ANFI will be issued and outstanding. All of the issued and
outstanding shares of capital stock
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of ANFI have been duly authorized and are validly issued, fully paid,
and nonassessable.
3.2.5 SECURITIES LAWS. Based in part upon the representations of
Fidelity in SECTION 3.1 hereof, no consent, authorization, approval, permit or
order of or filing with any governmental or regulatory authority is required
under current laws and regulations in connection with the execution and delivery
of this Agreement or the offer, issuance, sale or delivery of the ANFI Shares,
other than the DOI Approval.
4. PRE-CLOSING COVENANTS.
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.
4.1 GENERAL. Each of the Parties will use such party's best efforts to
take all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in SECTION 6
below).
4.2 NOTICES AND CONSENTS. The Parties will use their best efforts to
obtain any third party consents, and give any notices to, make any filings with,
and use their best efforts to obtain any authorizations, consents, and approvals
of governments and governmental agencies including, without limitation, the DOI
Approval, in connection with the Exchange.
4.3 NOTICE OF DEVELOPMENTS. Each party will give prompt written notice to
the other of any material adverse development causing a breach of any of its own
representations and warranties in SECTION 3 above. No disclosure by any party
pursuant to this SECTION 4, however, shall be deemed to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
5. POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the period following the
Closing.
5.1 GENERAL. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, including
obtaining any third party consents not obtained prior to Closing, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other party reasonably may
request, at the sole cost and expense of the requesting party. Fidelity
acknowledges and agrees that from and after the Closing ANFI will be entitled to
possession of all documents, books, records (including tax records), agreements
and financial data of any sort relating to ANFI.
5.2 FIDELITY COOPERATION WITH INITIAL PUBLIC OFFERING OF ANFI. Fidelity
shall use its reasonable best efforts to cooperate with ANFI and its agents in
connection with any proposed initial public offering of capital stock of ANFI
after the Closing.
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6. CONDITIONS TO OBLIGATION TO CLOSE.
6.1 CONDITIONS TO OBLIGATION OF FIDELITY. The obligation of Fidelity to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in SECTION 3.2
above shall be true and correct in all material respects at and as of
the Closing Date;
(b) ANFI shall have performed and complied with all of its
covenants in this Agreement in all material respects through the
Closing;
(c) Fidelity and ANFI shall have procured all of the third party
authorizations and consents specified in SECTION 3.1.2 AND SECTION
3.2.2 above, including, without limitation, the DOI Approval;
(d) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge
would (i) prevent consummation of any of the transactions contemplated
by this Agreement, (ii) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, (iii) affect
adversely the right of Fidelity to own ANFI Shares, or (iv) affect
adversely the right of ANFI to own its assets and to operate its
business (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect).
Fidelity may waive any condition specified in this SECTION 6.1 if it
executes a writing so stating at or prior to the Closing.
6.2 CONDITIONS TO OBLIGATION OF ANFI. The obligation of ANFI to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) the representations and warranties set forth in SECTION 3.1
above shall be true and correct in all material respects at and as of
the Closing Date;
(b) Fidelity shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(c) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge
would (i) prevent consummation of any of the transactions contemplated
by this Agreement or (ii) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect).
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(d) Fidelity and ANFI shall have procured all of the third party
authorizations and consents specified in SECTION 3.1.2 AND SECTION
3.2.2 above, including, without limitation, the DOI Approval;
ANFI may waive any condition specified in this SECTION 6.2 if it execute a
writing so stating at or prior to the Closing.
7. GENERAL PROVISIONS.
7.1 MODIFICATION. Neither this Agreement nor any term or provision hereof
may be amended, waived or modified in any manner without the express written
consent of the Parties hereto.
7.2 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.3 NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to Fidelity: Fidelity National Financial, Inc.
17911 Von Karman, Suite 300
Irvine, California 92614
Attn: Chief Executive Officer
If to ANFI: American National Financial, Inc.
17911 Von Karman, Suite 200
Irvine, California 92614
Attn: Chief Executive Officer
With a Copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, California 92626
Attn: Joseph D. Carruth, Esq.
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
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7.4 GOVERNING LAW; ARBITRATION.
7.4.1 This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of California without giving
effect to any choice or conflict of law provision or rule (whether of the
State of California or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
California.
7.4.2 Any controversy or claim arising out of or relating to this
Agreement or the formation, breach or interpretation hereof, will be
settled by arbitration before one arbitrator in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in
Orange County, California. Judgment upon the award rendered by the
arbitration may be entered and enforced in the court with jurisdiction over
the appropriate party. All controversies not subject to arbitration or
contesting any arbitration will be litigated in a federal or state court
located in Orange County, California (and each of the parties hereto hereby
consent to the exclusive jurisdiction of such courts and waive any
objections thereto).
7.5 AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by ANFI
and Fidelity. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any such prior or subsequent occurrence.
7.6 SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
7.7 EXPENSES. Each party shall pay its own expenses incurred in connection
with the consummation of the transactions herein specified, including without
limitation transfer fees, permit fees and fees and expenses of each party's
legal counsel, accountants and other advisers.
7.8 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
Parties intend that each representation, warranty, and covenant contained herein
shall have independent significance. If any party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty, or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant.
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7.9 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions, provided
such party is not then in default, to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the Parties and the matter, in
addition to any other remedy to which they may be entitled, at law or in equity.
7.10 COUNTERPARTS. This Agreement may be executed in two or more facsimile
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
ANFI: AMERICAN NATIONAL FINANCIAL, INC.,
a California corporation
By:
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Its:
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By:
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Its:
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FIDELITY: FIDELITY NATIONAL FINANCIAL, INC.,
a Delaware corporation
By:
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Its:
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By:
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Its:
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