Document:

Series A Certificate of Designation

CERTIFICATE OF DESIGNATION 

OF THE RIGHTS, PREFERENCES, PRIVILEGES 

AND RESTRICTIONS, WHICH HAVE NOT BEEN SET 

FORTH IN THE CERTIFICATE OF INCORPORATION 

OR IN ANY AMENDMENT THERETO, 

OF THE 

SERIES A PREFERRED STOCK 

OF 

AMERICAN RESIDENTIAL FUNDING, INC. 

The undersigned, Vincent Rinehart and Veneranda Toledo, do hereby certify that: 

A.   They are the duly elected and acting President and Secretary, respectively, of American Residential Funding, Inc., a Nevada corporation (the “Company”). 

B.   Pursuant to the Unanimous Written Consent of the Board of Directors of the Company dated July 18, 2003, and Unanimous Written Consent of the Company’s shareholders dated July 18, 2003, the Board of Directors and Shareholders duly adopted the following resolutions: 

WHEREAS, the Certificate of Incorporation of the Company, as amended, authorizes a class of stock designated as Preferred Stock, no par value (the “Preferred Class”), comprising one million two hundred fifty thousand (1,250,000) shares and provides that the Board of Directors of the Company may fix the terms, including any dividend rights, dividend rates, conversion rights, voting rights, rights and terms of any redemption, redemption price or prices, and liquidation preferences, if any, of the Preferred Class; 

WHEREAS, the Board of Directors believes it in the best interests of the Company to create a series of preferred stock consisting of 1,250,000 shares and designated as the “Series A Preferred Stock” having certain rights, preferences, privileges, restrictions and other matters relating to the Series A Preferred Stock. No shares of Series A Preferred Stock have been issued; 

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby fix and determine the rights, preferences, privileges, restrictions and other matters relating do the Series A Preferred Stock as follows: 

1.  Definitions. For purposes of this Certificate of Designation, the following definitions shall apply: 

 

1.1    “Board” shall mean the Board of Directors of the Company. 

 

1.2    “Company” shall mean American Residential Funding, Inc., a Nevada corporation. 

	 
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1.3     “Common Stock” shall mean the Common Stock, no par value per share, of the Company. 

 

1.4     “Common Stock Dividend” shall mean a stock dividend declared and paid on the Common Stock that is payable in shares of Common Stock. 

 

1.5    “Distribution” shall mean the transfer of cash or property by the Company to one or more of its stockholders without consideration, whether by dividend or otherwise (except a dividend in shares of Company's stock). 

 

1.6    “Original Issue Date” shall mean the date on which the first share of Series A Preferred Stock is issued by the Company. 

 

1.7     “Original Issue Price” shall mean $0.80 per share for the Series A Preferred Stock. 

 

1.8    “Series A Preferred Stock” shall mean the Series A Preferred Stock, no par value per share, of the Company. 

 

1.9     “Subsidiary” shall mean any corporation or limited liability company of which at least fifty percent (50%) of the outstanding voting stock or membership interests, as the case may be, is at the time owned directly or indirectly by the Company or by one or more of such subsidiary corporations: 

2.  Dividend Rights . 

 

2.1    Cash Dividends . Each year, beginning on the date which is twelve (12) months following the Original Issue Date and continuing every twelve (12) months thereafter, the holders of the then outstanding Series A Preferred Stock shall be entitled to receive, not later than thirty (30) days following the end of the applicable twelve (12) month period, out of any funds and assets of the Company legally available therefore, dividends in an amount equal to ten percent (10%) of the Original Issue Price per annum. Dividends on the Series A Preferred Stock shall be cumulative, so that if dividends required to be paid on said shares for any year or years shall not have been paid, the amount of the deficiency shall be paid in full, without interest, together with any dividends due for the current year, before any distribution of any kind shall be paid to the holders of the Common Stock. No dividends (other than a Common Stock Dividend) shall be paid, and no Distribution shall be made, with respect to the Common Stock unless dividends in such amount shall have been paid or declared and set apart for payment to the holders of the Series A Preferred Stock simultaneously. 

 

2.2  Participation Rights . Other than as set forth in Section 2.1, dividends shall be declared pro rata on the Common Stock and the Series A Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders, where each holder of shares of Series A Preferred Stock is to be treated for this purpose as holding the same number of common shares as such holder owns of Series A Preferred Stock. 

	 
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2.3  Non-Cash Dividends . Whenever a dividend or Distribution provided for in this Section 2 shall be payable in property other than cash (other than a Common Stock Dividend), the value of such dividend or Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board. 

3.  Liquidation Rights. In the event of any liquidation, dissolution or winding up of the Company; whether voluntary or involuntary, the funds and assets of the Company that may be legally distributed to the Company's shareholders (the “Available Funds and Assets”) shall be distributed to shareholders in the following manner: 

 

3.1     Series A Preferred Stock. The holders of each share of Series A Preferred Stock then outstanding shall be entitled to be paid, out of the Available Funds and Assets, and prior and in preference to any payment or distribution (or any setting apart of any payment or distribution) of any Available Funds and Assets on any shares of Common Stock or subsequent series of preferred stock, an amount per share equal to the Original Issue Price of the Series A Preferred Stock plus all accrued but unpaid dividends on the Series A Preferred Stock. If upon any liquidation, dissolution or winding up of the Company, the Available Funds and Assets shall be insufficient to permit the payment to holders of the Series A Preferred Stock of their full preferential amount as described in this subsection, then all of the remaining Available Funds and Assets shall be distributed among the holders of the then outstanding Series A Preferred Stock pro rata, according to the number of outstanding shares of Series A Preferred Stock held by each holder thereof. 

 

3.2     Merger or Sale of Assets. A reorganization or any other consolidation or merger of the Company with or into any other corporation, or any other sale of all or substantially all of the assets of the Company, shall not be deemed to be a liquidation, dissolution or winding up of the Company within the meaning of this Section 3, and the Series A Preferred Stock shall be entitled only to (i) the right provided in any agreement or plan governing the reorganization or other consolidation, merger or sale of assets transaction, (ii) the rights contained in the Nevada Revised Statutes and (iii) the rights contained in other Sections hereof. 

 

3.3     Non-Cash Consideration. If any assets of the Company distributed to shareholders in connection with any liquidation, dissolution or winding up of the Company are other than cash, then the value of such assets shall be their fair market value as determined by the Board, except that any securities to be distributed to shareholders in a liquidation, dissolution or winding up of the Company shall be valued as follows: 

(a)   The method of valuation of securities not subject to investment letter or other similar restrictions on free marketability shall be as follows: 

(i)    if the securities are then traded on a national securities exchange or the Nasdaq National Market (or a similar national quotation system), then the value shall be deemed to be the average of the closing prices of the securities on such exchange or system over the ten (10) day period ending three (3) days prior to the distribution; and, 

	 
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(ii)    if actively traded over-the-counter, then the value shall be deemed to be the average of the closing bid prices over the ten (10) day period ending three (3) days prior to the distribution; and 

(iii)    if there is no active public market, then the value shall be the fair market value thereof, as determined mutually in good faith by (i) the Board of Directors of the Company and (ii) the holders of the Series A Preferred Stock acting as a group. In the event the Company and the holders cannot mutually agree upon a value, then the value shall be determined by a mutually acceptable third party licensed business valuation expert paid for equally by both parties. 

(b)  The method of valuation of securities subject to investment letter or other restrictions on free marketability shall be to make an appropriate discount from the market value determined as above in subparagraphs (a)(i), (ii) or (iii) of this subsection to reflect the approximate fair market value thereof. 

4.    Conversion Rights . The shares of Series A Preferred Stock shall not be convertible. 

5.    Call Provisions . The Series A Preferred Stock shall not be callable by the Company. 

6.    Redemption Provisions . The Series A Preferred Stock shall not be redeemable by the holders thereof. 

7.    Notices . Any notices required by the provisions of this Certificate of Designation to be given to the holders of shares of Series A Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at its address appearing on the books of the Company. 

 

8.  Voting Provisions . The Series A Preferred Stock shall not have any voting rights. 

IN WITNESS WHEREOF, the Company has caused this Certificate of Designation of Series A Preferred Stock to be duly executed by its President and attested to by its Secretary and has caused its corporate seal to be affixed hereto effective as of July 18, 2003. 

	
____________________________________
	
_____________________________________

	
Vincent Rinehart, President 
	
Veneranda Toledo, Secretary 

	
 

	 	Page 4 of 4Securities Exchange Agreement

SECURITIES EXCHANGE AGREEMENT 

by and between 

ANZA CAPITAL, INC., 

a Nevada corporation, 

AMERICAN RESIDENTIAL FUNDING, INC., 

a Nevada corporation, 

and 

SUTTER HOLDING COMPANY, INC., 

a Delaware corporation 

	 
	 	 	 
	

	 

 

SECURITIES EXCHANGE AGREEMENT 

This Securities Exchange Agreement (the “Agreement”) is entered into effective this 18th day of July, 2003 by and between Anza Capital, Inc., a Nevada corporation (“Anza”), American Residential Funding, Inc., a Nevada corporation (“AMRES”), and Sutter Holding Company, Inc., a Delaware corporation (“Sutter”). Each of Anza, AMRES, and Sutter shall be referred to as a “Party” and collectively as the “Parties.” 

RECITALS 

WHEREAS, Anza’s and Sutter’s common stock is traded on the Over the Counter Bulletin Board; 

WHEREAS, AMRES is a wholly owned subsidiary of Anza, and the securities of AMRES are not publicly traded; 

WHEREAS, the Parties desire to enter into this Securities Exchange Agreement for the purpose of diversifying their assets while improving their respective net worth; 

NOW, THEREFORE, for good and adequate consideration, the receipt of which is hereby acknowledged, the Parties covenant, promise and agree as follows: 

AGREEMENT 

1.  TERMS OF THE EXCHANGE : The Exchange shall be consummated on the following terms and conditions: 

 

(a)   On July 31, 2003 (the “Closing Date”), Sutter shall cause to be issued and shall deliver to AMRES Sixty Six Thousand Four Hundred Ninety Six (66,496) shares of Sutter common stock (the “Sutter Shares”). 

 

(b)   By the Closing Date, AMRES shall cause to be issued and shall deliver to Sutter One Million (1,000,000) shares of Series A Preferred Stock (the “AMRES Shares”), the rights, privileges, and preferences of which are set forth in the Certificate of Designation attached hereto as Exhibit A. 

 

(c)   By the Closing Date, ANZA shall cause to be issued and shall deliver to Sutter warrants to acquire One Million (1,000,000) shares of Anza common stock as set forth in the Warrant Agreement attached hereto as Exhibit B (the “Anza Warrants”). 

	 
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2.   REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY SUTTER : Sutter hereby represents, warrants and agrees as follows: 

 

(a)   Sutter is a corporation duly organized, validly existing and in good standing under the laws of Delaware, with full power and authority to own, lease, use, and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. The Company has all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and to effect the exchange of the shares in accordance with the terms hereof. 

 

(b)   The information heretofore furnished by Sutter to AMRES and Anza for purposes of or in connection with this Agreement or any transaction contemplated hereby does not, and all such information hereafter furnished by Sutter to AMRES and Anza will not (in each case taken together and on the date as of which such information is furnished), contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they are made, not misleading. 

 

(c)   The representations and warranties herein by Sutter will be true and correct in all material respects on and as of the date hereof and will, except as provided herein, survive the Closing Date. 

 

(d)   No form of general solicitation or general advertising was used by Sutter or the Company or, to the best of its actual knowledge, any other person acting on behalf of Sutter or the Company, in connection with the exchange. 

 

(e)   Sutter acknowledges that Sutter has been furnished with such financial and other information concerning AMRES and Anza, the directors and officers of AMRES and Anza, and the business of AMRES and Anza as Sutter considers necessary in connection with the transactions contemplated hereby. As a result, Sutter is familiar with the business, operations, properties, and financial condition of AMRES and Anza and has discussed with officers or legal counsel of AMRES and Anza any questions Sutter may have had with respect thereto. Sutter has consulted with his or her own legal, accounting, tax, investment and other advisers with respect to the tax treatment, merits, and risks of the transactions contemplated hereby. 

 

(f)   Sutter hereby agrees to indemnify and defend AMRES and Anza and its directors and officers and hold them harmless from and against any and all liability, damage, cost or expense incurred on account of or arising out of: 

 

(i)  Any breach of or inaccuracy in Sutter's representations, warranties or agreements herein; 

(ii)  Any action, suit or proceeding based on a claim that any of said representations, warranties or agreements were inaccurate or misleading or otherwise cause for obtaining damages or redress from AMRES or Anza or any director or officer of AMRES or Anza. 

 

(g)   The representations, warranties and agreements contained in this Agreement shall be binding on Sutter’s successors, assigns, heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of AMRES and Anza and its directors and officers. 

	 
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(h)   Sutter acknowledges and agrees that the AMRES S hares and any shares of Anza acquired upon exercise of the Anza Warrants (the “Anza Shares” and together with the AMRES Shares and the Anza Warrants the “Anza Securities”) will be “restricted securities” as that term is defined in Rule 144 under the Securities Act of 1933 (the “Act”) and, accordingly, that the Anza Securities must be held indefinitely unless they are subsequently registered under the Act and qualified under applicable state blue sky law and any other applicable securities law or exemptions from such registration and qualification as are available. Sutter understands that AMRES and/or Anza are under no obligation to register the Anza Securities under the Act, to qualify the Anza Securities under any securities law, or to comply with any exemption under the Act or any other law. Sutter understands that Rule 144 prevents the sale of any of the Anza Securities for at least one year, and only then under certain specific circumstances. Sutter agrees that it shall not sell, assign, hypothecate or otherwise transfer the AMRES Shares, Anza Warrants, or the Anza Shares during the first 280 days following the Closing Date. 

 

(i)   Sutter hereby represents that as of the Closing Date, the Sutter Shares represent less than 19.9% of the issued and outstanding common stock of Sutter. 

 

(j)   Sutter hereby agrees as follows: 

(i)  As of the date of this Agreement, the thirty (30) day trailing average transaction price(the “Stock Price”) is $11.95. 

(ii)  Based on the Stock Price, the agreed-upon value of the Sutter Shares as of the date of this Agreement is $800,000.00 (the “Initial Sutter Share Value”). 

(iii)   If, during the first twelve (12) months following the Closing Date (the “Sutter Guarantee Period”), the value of the Sutter Shares, calculated by multiplying the Stock Price (calculated as in 2(j)(ii) above as of the date which is thirty (30) days before the end of each of Anza’s applicable quarters) by the Sutter Shares, falls below the Initial Sutter Share Value, then upon delivery of written notice by Anza to Sutter (the “Notice Delivery Date”), Sutter agrees to issue to AMRES that number of additional shares of Sutter common stock (the “Supplemental Sutter Shares”) necessary so that the value of the Sutter Shares and the Supplemental Sutter Shares, when multiplied by the Stock Price on the Notice Delivery Date, shall be equal to at least the Initial Sutter Share Value. The Supplemental Sutter Shares shall be delivered within twenty (20) days of the Notice Delivery Date. 

(iv)  If, as a result of the issuance of the Supplemental Sutter Shares, the number of shares of Sutter common stock held by AMRES will exceed 19.9% of the issued and outstanding shares of Sutter common stock, then Sutter shall provide written notice of such fact to AMRES within five (5) days of the Notice Delivery Date, and AMRES and Anza shall have the option of refusing the Supplemental Sutter Shares, or assigning them to a third party for issuance thereto. 

	 
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(v)  The issuance of Supplemental Sutter Shares may take place on more than one occasion during the Sutter Guarantee Period; however, Sutter is only obligated to issue that number of shares of Sutter common stock equal to the number of Sutter Shares. 

(vi)   AMRES, Anza, or their assignees, will not be under any obligation to return any Supplemental Sutter Shares once issued and delivered. 

 

(k)   On the date of this Agreement, Sutter shall execute the Irrevocable Proxy attached hereto as Exhibit C. 

3.  REPRESENTATIONS, WARRANTIES AND AGREEMENTS BY AMRES AND ANZA : The Company hereby represents, warrants and agrees as follows: 

 

(a)   AMRES and Anza are corporations duly organized, validly existing and in good standing under the laws of Nevada, with full power and authority to own, lease, use, and operate their properties and to carry on their business as and where now owned, leased, used, operated and conducted. AMRES and Anza have all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and to effect the exchange of the shares in accordance with the terms hereof. 

 

(b)   The information heretofore furnished by AMRES and Anza to Sutter for purposes of or in connection with this Agreement or any transaction contemplated hereby does not, and all such information hereafter furnished by AMRES and Anza to Sutter will not (in each case taken together and on the date as of which such information is furnished), contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they are made, not misleading. 

 

(c)   The representations and warranties herein by AMRES and Anza will be true and correct in all material respects on and as of the date hereof and will, except as provided herein, survive the Closing Date. 

 

(d)   AMRES and Anza acknowledge that they have been furnished with such financial and other information concerning Sutter, the directors and officers of Sutter, and the business of Sutter as AMRES and Anza consider necessary in connection with the transactions contemplated hereby. As a result, AMRES and Anza are familiar with the business, operations, properties, and financial condition of Sutter and have discussed with officers or legal counsel of Sutter any questions they may have had with respect thereto. AMRES and Anza have consulted with their own legal, accounting, tax, investment and other advisers with respect to the tax treatment, merits, and risks of the transactions contemplated hereby. 

 

(e)   AMRES and Anza hereby agree to indemnify and defend Sutter and its directors and officers and hold them harmless from and against any and all liability, damage, cost or expense incurred on account of or arising out of: 

	 
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(i)  Any breach of or inaccuracy in AMRES or Anza’s representations, warranties or agreements herein; 

(ii)  Any action, suit or proceeding based on a claim that any of said representations, warranties or agreements were inaccurate or misleading or otherwise cause for obtaining damages or redress from Sutter or any director or officer of Sutter. 

      (k)   The representations, warranties and agreements contained in this Agreement shall be binding on AMRES and Anza’s successors, assigns, heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of Sutter and its directors and officers. 

 

(l)   AMRES and Anza acknowledge and agree that the Sutter Shares will be “restricted securities” as that term is defined in Rule 144 under the Act and, accordingly, that the Sutter Shares must be held indefinitely unless they are subsequently registered under the Act and qualified under applicable state blue sky law and any other applicable securities law or exemptions from such registration and qualification as are available. AMRES and Anza understand that Sutter is under no obligation to register the Sutter Shares under the Act, to qualify the Sutter Shares under any securities law, or to comply with any exemption under the Act or any other law. AMRES and Anza understand that Rule 144 prevents the sale of the Sutter Shares for at least one year, and only then under certain specific circumstances. AMRES and Anza agree that they shall not sell, assign, hypothecate or otherwise transfer the Sutter Shares or any Supplemental Sutter Shares during the first 280 days following the Closing Date. AMRES and Anza agree that they shall not buy, sell, nor transact in any way, nor will any of their officers, directors, or controlled affiliates buy, sell, nor transact in any way, in Sutter’s common stock prior to the one year anniversary of the Closing Date. 

 

(m)   On the date of this Agreement, AMRES shall execute the Irrevocable Proxy attached hereto as Exhibit D. 

4.  RESCISSION . Any Party may rescind this Agreement at any time by giving ninety (90) days advance written notice to the other Parties no later than the 275th day following the Closing Date (a “Rescission”). In the event of a Rescission: 

(a)  the Sutter Shares and any Supplemental Sutter Shares then owned or controlled by AMRES or Anza shall be returned to Sutter; 

(b)  the AMRES Shares, Anza Warrants, and any Anza Shares then owned or controlled by Sutter shall be returned to AMRES and/or Anza, respectively; 

(c)  any accrued but unpaid dividends on the AMRES Shares shall automatically extinguish and terminate; 

(d)  any Anza Shares to be issued pursuant to the exercise of Anza Warrants, but which have not yet been issued, will be cancelled and/or returned to Anza. 

	 
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In the event Anza raises at least $1 million cash in a private or public offering of its common stock to any party at a price equal to or greater than $0.80 per share, Anza shall provide written notice to Sutter and Sutter’s right to rescind this transaction (if not already expired) shall be reduced to thirty (30) days from the date of receipt of such notice, and the Anza Warrants shall be automatically exercised by the automatic surrender of the AMRES Shares, regardless of their exercise period. In the event Sutter raises at least $1 million cash in a private or public offering of its common stock to any party at a price equal to or greater than the Stock Price (calculated on the date of this Agreement), Sutter shall provide written notice to Anza and Anza’s and AMRES’ right to rescind this transaction (if not already expired) shall be reduced to thirty (30) days from the date of receipt of such notice, and Sutter shall not be required to issue any additional Supplemental Sutter Shares pursuant to Section 2(j)(iii). 

5.  CONFIDENTIALITY . Each Party hereto will hold and will cause its agents, officers, directors, attorneys, employees, consultants and advisors to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all documents and information concerning any other Party furnished it by such other Party or its representatives in connection with the subject matter hereof (except to the extent that such information can be shown to have been (i) previously known by the Party to which it was furnished, (ii) in the public domain through no fault of such Party, or (iii) later lawfully acquired from other sources by the Party to which it was furnished), and each Party will not release or disclose such information to any other person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors in connection with this Agreement. Each Party shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by the other Party if it exercises the same care as it takes to preserve confidentiality for its own similar information. Notwithstanding the foregoing, the Parties acknowledge that this Agreement shall be discussed in, and will be filed as an exhibit to, the Company’s filings with the Securities and Exchange Commission. 

6.  This Agreement may not be amended, canceled, revoked or otherwise modified except by written agreement subscribed by all of the Parties to be charged with such modification. 

7.  Any notices to be given hereunder may be effected either by personal delivery in writing, by facsimile, or by overnight mail. Facsimile or overnight mailed notices shall be addressed to the Parties at the addresses listed below. Notices will be deemed communicated as of actual receipt. 

	

    

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If to AMRES or Anza: 
	
 
	
American Residential Funding, Inc. 

	
 
	
 
	
Anza Capital, Inc. 

	
 
	
 
	
3200 Bristol Street, Suite 700 

	
 
	
 
	
Costa Mesa, CA 92626 

	
 
	
 
	
Facsimile (714) 424-0389 

	
 
	
 
	
Attn: Vince Rinehart 

	
If to Sutter: 
	
 
	
Sutter Holding Company, Inc. 

	
 
	
 
	
150 Post Street, Suite 405 

	
 
	
 
	
San Francisco, CA 94108 

	
 
	
 
	
Facsimile (415) 788-1515 

	
 
	
 
	
Attn: Robert E. Dixon 

8.  This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective partners, employees, agents, servants, heirs, administrators, executors, successors, representatives and assigns. Except as set forth in Section 2(j)(iv) above, neither Party may assign its rights, benefits, or obligations under this Agreement without the express written consent of the other Party. 

9.  All Parties hereto agree to pay their own costs and attorneys' fees except as follows: 

(a)  In the event of any action, suit or other proceeding instituted to remedy, prevent or obtain relief from a breach of this Agreement, arising out of a breach of this Agreement, involving claims within the scope of the releases contained in this Agreement, or pertaining to a declaration of rights under this Agreement, the prevailing Party shall recover all of such Party's attorneys' fees and costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. 

(b)  As used herein, attorneys' fees shall be deemed to mean the full and actual costs of any legal services actually performed in connection with the matters involved, calculated on the basis of the usual fee charged by the attorneys performing such services. 

10.  This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws. Venue for any action brought under this Agreement shall be in the appropriate court in either Orange County or San Francisco County, California, at the discretion of the Party first bringing the action. 

11.  The Parties agree and stipulate that each and every term and condition contained in this Agreement is material, and that each and every term and condition may be reasonably accomplished within the time limitations, and in the manner set forth in this Agreement. 

	 
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12.    The Parties agree and stipulate that time is of the essence with respect to compliance with each and every item set forth in this Agreement. 

13.  This Agreement, along with the exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto and supersedes any and all prior agreements, arrangements and understandings related to the subject matter hereof. No understanding, promise, inducement, statement of intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any party hereto which is not embodied in this Agreement or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no Party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant or condition not so set forth. 

14.  This Agreement may be executed in one or more counterparts, each of which when executed and delivered shall be an original, and all of which when executed shall constitute one and the same instrument. 

[remainder of page intentionally left blank] 

	

    

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IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby, execute this Agreement upon the date first set forth above. 

	
“AMRES” 
	
 
	
“Anza” 

	
 
	
 
	
 

	
 
	
 
	
 

	
American Residential Funding, Inc. 
	
 
	
Anza Capital, Inc. 

	
 
	
 
	
 

	
 
	
 
	
 

	
/s/ Vincent Rinehart 
	
 
	
/s/ Vincent Rinehart 

	

		

	
By: Vincent Rinehart
	
 
	
By: Vincent Rinehart

	

		

	
Its: President 
	
 
	
Its: President

	

		

	
“Sutter” 
	
 

	
 
	
 

	
 
	
 

	
Sutter Holding Company, Inc. 
	
 

	
 
	
 

	
 
	
 

	
/s/ Robert E. Dixon
	
 

	

	
	
By: Robert E. Dixon  
	
 

	

	
	
Its: Co-CEO and President
	
 

	

	

	

    

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Exhibit A 

Certificate of Designation 

AMRES Series A Preferred Stock 

	

   

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Exhibit B 

Anza Warrant 

	

Page of 13     

	 	Page 11 of 13	 
	

	 

Exhibit C 

Proxy 

	

    

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Exhibit D 

Proxy 

	

    

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