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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549






Form 8-K






Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934






Date of Report (Date of earliest event reported): July 31, 2003







Anza Capital, Inc.
(Exact name of registrant as specified in its charter)




Nevada
(State or other
jurisdiction of incorporation) O-24512
(Commission
File Number) 88-1273503
(I.R.S. Employer
Identification No.)


3200 Bristol Street, Suite 700
Costa Mesa, CA 92626
(Address of principal executive offices) (zip code)


[phone]
(Registrant’s telephone number, including area code)


(Former name or former address, if changed since last report.)






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Item 2. Acquisition or Disposition of Assets


On July 18, 2003, we entered into a Securities Exchange Agreement by and between Anza Capital, Inc., American Residential Funding, Inc. (“AMRES”), and Sutter Holding Company, Inc. (“Sutter”) (the “Agreement”). The purpose of the Agreement is to diversify our assets and improve our net worth. On July 31, 2003, the closing date under the Agreement, we acquired 66,496 shares of common stock of Sutter, a publicly traded company whose stock trades on the Over the Counter Bulletin Board under the symbol “SRHI.”


As consideration for the purchase of the Sutter Shares, our subsidiary, AMRES, issued to Sutter One Million (1,000,000) shares of newly created Series A Preferred Stock (the “AMRES Preferred Stock”). As additional consideration, we issued to Sutter warrants to acquire One Million (1,000,000) shares of our common stock (the “Anza Warrants”).


The AMRES Preferred Stock holder is entitled to receive a cumulative ten percent (10%) annual dividend, payable yearly. In addition, the AMRES Preferred Stock has a liquidation preference in an amount equal to its original issue price, or $0.80 per share. The AMRES Preferred Stock is not convertible, callable, redeemable, and does not have any voting rights.


The Anza Warrants are exercisable beginning in one (1) year, and for a period of four (4) years thereafter. The warrants can only be exercised by delivering one (1) shares of AMRES Preferred Stock for each share of Anza common stock to be acquired.


Under the terms of the Agreement, if during the first twelve (12) months following the closing, the value of the Sutter Shares drops below $800,000 during the thirty (30) days before the end of each of our fiscal quarters, then Sutter will issue to us additional shares of Sutter common stock. Either party may rescind the Agreement on ninety (90) days written notice up until the date which is 275 days after the closing date. Finally, AMRES and Sutter have each executed an Irrevocable Proxy granting all voting rights in the Sutter Shares and the shares of Anza common stock acquired upon exercise of the Anza Warrants to the respective Board of Directors of each company.

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EXHIBITS


Item No. Description

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4.1 Warrant dated July 31, 2003

4.2 Certificate of Designation of Series A Preferred Stock of American Residential Funding, Inc.

9.1 Irrevocable Proxy regarding Sutter Common Stock

9.2 Irrevocable Proxy regarding Anza Common Stock

10.1 Securities Exchange Agreement dated July 18, 2003










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 hereunto duly authorized.




Dated: August 1, 2003 Anza Capital, Inc.,
a Nevada corporation



/s/ Vincent Rinehart

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By Vincent Rinehart
Its: President and Chief Executive Officer




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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.


WARRANT


Anza Capital, Inc.


(Incorporated under the laws of the State of Nevada)




THIS IS TO CERTIFY that, for value received, Sutter Holding Company, Inc. (the “Holder”) is entitled, subject to the terms and conditions set forth herein, to purchase from Anza Capital, Inc., a Nevada corporation (the “Company”) up to One Million (1,000,000) fully paid and nonassessable shares of common stock of the Company (the “Warrant Securities”) at the exercise price set forth in Section 1 below, (the “Exercise Price”).


1. Exercisability . This Warrant may be exercised in whole or in part (subject to the limitation in Section 3) at any time, or from time to time, between the date which is twelve (12) months from the date hereof until 5:00 p.m. Pacific Time on the date which is five (5) years from the date hereof, by presentation and surrender hereof to the Company of a notice of election to purchase duly executed and accompanied by payment by of the Exercise Price. The Exercise Price for each share of common stock of the Company shall be one (1) share of Series APreferred Stock of American Residential Funding, Inc. (“AMRES”), which shall be surrendered to the Company along with a stock power for transfer to the Company.


2. Manner of Exercise . In case of the purchase of less than all the Warrant Securities, the Company shall cancel this Warrant upon the surrender hereof and shall execute and deliver a new warrant of like tenor for the balance of the Warrant Securities. Upon the exercise of this Warrant, the issuance of certificates for securities, properties or rights underlying this Warrant shall be made forthwith (and in any event within ten (10) business days thereafter) without charge to the Holder including, without limitation, any tax that may be payable in respect of the issuance thereof: provided, however, that the Company shall not be required to pay any tax in respect of income or capital gain of the Holder.


If and to the extent this Warrant is exercised, in whole or in part, the Holder shall be entitled to receive a certificate or certificates representing the Warrant Securities so purchased, upon presentation and surrender to the Company of the form of election to purchase attached hereto duly executed, and accompanied by payment of the purchase price.



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3. Limitations on Exercise . In no event shall the Holder be entitled to exercise any portion of this Warrant to acquire Warrant Securities if the sum of (i) the number of shares of Common Stock of the Company beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of any warrants, or other derivative securities convertible into or exchangeable for shares of Common Stock which contain a limitation similar to that set forth in this Section), and (ii) the number of shares of Common Stock of the Company issuable upon the exercise of the portion of the warrants with respect to which this determination is being made, would result in beneficial ownership by the Holder and its affiliates of more than 19.9% of the outstanding shares of Common Stock of the Company. For purposes of this section, beneficial ownership shall be determined in accordance with Rule 13d-3 of the Exchange Act and Regulations 13 D-G thereunder, except as otherwise provided in this section.


4. Adjustment in Number of Shares .


(A) Adjustment for Reclassifications . In case at any time or from time to time after the issue date the holders of the Common Stock of the Company (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received, or, on or after the record date fixed for the determination of eligible stockholders, shall have become entitled to receive, without payment therefore, other or additional stock or other securities or property (including cash) by way of stock split, spin-off, reclassification, combination of shares or similar corporate rearrangement (exclusive of any stock dividend of its or any subsidiary’s capital stock), then and in each such case the Holder of this Warrant, upon the exercise hereof as provided in Section 1, shall be entitled to receive the amount of stock and other securities and property which such Holder would hold on the date of such exercise if on the issue date he had been the holder of record of the number of shares of Common Stock of the Company called for on the face of this Warrant and had thereafter, during the period from the issue date, to and including the date of such exercise, retained such shares and/or all other or additional stock and other securities and property receivable by him as aforesaid during such period, giving effect to all adjustments called for during such period. In the event of any such adjustment, the Exercise Price shall be adjusted proportionally.


(B) Adjustment for Reorganization, Consolidation, Merger . In case of any reorganization of the Company (or any other corporation the stock or other securities of which are at the time receivable on the exercise of this Warrant) after the issue date, or in case, after such date, the Company (or any such other corporation) shall consolidate with or merge into another corporation or convey all or substantially all of its assets to another corporation, then and in each such case the Holder of this Warrant, upon the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation, merger or conveyance, shall be entitled to receive, in lieu of the stock or other securities or property to which such Holder would be entitled had the Holder exercised this Warrant immediately prior thereto, all subject to further adjustment as provided herein; in each such case, the terms of this Warrant shall be applicable to the shares of stock or other securities or property receivable upon the exercise of this Warrant after such consummation.



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5. No Requirement to Exercise . Nothing contained in this Warrant shall be construed as requiring the Holder to exercise this Warrant prior to or in connection with the effectiveness of a registration statement.


6. No Stockholder Rights . Unless and until this Warrant is exercised, this Warrant shall not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company, or to any other rights whatsoever except the rights herein expressed, and, no dividends shall be payable or accrue in respect of this Warrant.


7. Exchange . This Warrant is exchangeable upon the surrender hereof by the Holder to the Company for new warrants of like tenor representing in the aggregate the right to purchase the number of Warrant Securities purchasable hereunder, each of such new warrants to represent the right to purchase such number of Warrant Securities as shall be designated by the Holder at the time of such surrender.


Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it and reimbursement to the company of all reasonable expenses incidental thereto, and upon surrender and cancellation hereof, if mutilated, the Company will make and deliver a new warrant of like tenor and amount, in lieu hereof.


8. Elimination of Fractional Interests . The Company shall not be required to issue certificates representing fractions of securities upon the exercise of this Warrant, nor shall it be required to issue scrip or pay cash in lieu of fractional interests. All fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of securities, properties or rights receivable upon exercise of this Warrant.


9. Reservation of Securities . The Company shall at all times reserve and keep available out of its authorized shares of Common Stock or other securities, solely for the purpose of issuance upon the exercise of this Warrant, such number of shares of Common Stock or other securities, properties or rights as shall be issuable upon the exercise hereof. The Company covenants and agrees that, upon exercise of this Warrant and payment of the Principal Value, all shares of Common Stock and other securities issuable upon such exercise shall be duly and validly issued, fully paid, non-assessable and not subject to the preemptive rights of any stockholder.


10. Notices to Holder . If at any time prior to the expiration of this Warrant or its exercise, any of the following events shall occur:


(a) the Company shall take a record of the holders of any class of its securities for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of current or retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; or


(b) the Company shall offer to all the holders of a class of its securities any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option or warrant to subscribe therefor; or



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(c) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or merger) or a sale of all or substantially all of its property, assets and business as an entirety shall be proposed.


then, in any one or more said events, the Company shall give written notice of such event to the Holder at least fifteen (15) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholder entitled to such dividend, distribution, convertible or exchangeable securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of closing the transfer books, as the case may be.


11. Transferability . This Warrant may be transferred or assigned by the Holder only with the express written permission of the Company.


12. Informational Requirements . The Company will transmit to the Holder such information, documents and reports as are generally distributed to stockholders of the Company concurrently with the distribution thereof to such stockholders.


13. Notice . Notices to be given to the Company or the Holder shall be deemed to have been sufficiently given if delivered personally or sent by overnight courier or messenger, or by facsimile transmission. Notices shall be deemed to have been received on the date of personal delivery or facsimile transmission. The address of the Company and of the Holder shall be as set forth in the Company’s books and records.


14. Consent to Jurisdiction and Service . The Company consents to the jurisdiction of any court of the State of California, and of any federal court located in California, in any action or proceeding arising out of or in connection with this Warrant. The Company waives personal service of any summons, complaint or other process in connection with any such action or proceeding and agrees that service thereof may be made, by certified mail directed to the Company at the location provided in Section 13 hereof, or, in the alternative, in any other form or manner permitted by law. Either Orange County or San Francisco County, California shall be proper venue, at the discretion of the Party first bringing the action.


15. Successors . All the covenants and provisions of this Warrant shall be binding upon and inure to the benefit of the Company, the Holder and their respective legal representatives, successors and assigns.


16. Attorneys Fees . In the event the Holder or any holder hereof shall refer this Warrant to an attorney to enforce the terms hereof, the Company agrees to pay all the costs and expenses incurred in attempting or effecting collection hereunder, including reasonable attorney`s fees, whether or not suit is instituted.



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17. Governing Law . THIS WARRANT SHALL BE GOVERNED, CONSTRUED AND INTERPRETED UNDER THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO THE RULES GOVERNING CONFLICTS OF LAW.


IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by the signature of its President and to be delivered in Santa Ana, California.






Dated: July 31, 2003 Anza Capital, Inc.,
a Nevada corporation


/s/ Vincent Rinehart

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By: Vincent Rinehart
Its: President










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[FORM OF ELECTION TO PURCHASE]




The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by this Warrant Certificate for, and to purchase securities of Anza Capital, Inc. and herewith makes payment of ___________ shares of Series A Preferred Stock of American Residential Funding, Inc. therefore, and requests that the certificates for such securities be issued in the name of, and delivered to _______________________, whose address is _________________________________________.








Dated: ____________________, 20___ _________________________________
By: ______________________________







(Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate)




________________________________________________
(Insert Social Security or Other
Identifying Number of Holder)




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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




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IRREVOCABLE PROXY




The undersigned stockholder of Sutter Holdings Company, Inc., a Delaware corporation (“Sutter”), hereby irrevocably (to the full extent permitted by law) appoints Robert E. Dixon and any individual designated by said individual, the attorney and proxy of the undersigned with full power of substitution and resubstitution, to the full extent of the undersigned’s rights and respect to 66,946 shares of common stock of Sutter beneficially owned by the undersigned as of the date hereof (the “Sutter Shares”). In the event of the death or total disability of Robert E. Dixon during the term of this Proxy, then the Board of Directors of Sutter, acting as a whole, shall automatically be appointed the attorney and proxy of the undersigned with respect to the Sutter Shares until the termination of this Proxy by its terms. This Proxy shall be in full force and effect until the earlier to occur of (y) the undersigned’s valid sale or transfer of some or all of the Sutter Shares to a third party not under common control with the undersigned, or (z) two (2) years from the date hereof.


This Proxy is irrevocable (to the fullest extent permitted by law), shall be deemed coupled with an interest, and is granted in connection with the Securities Exchange Agreement of even date hereof by and among Anza Capital, Inc., the undersigned, and Sutter (the “Agreement”). Any and all certificates representing the Sutter Shares shall bear a legend stating that such shares are the subject of this Proxy.


The attorney and proxy named above shall be empowered at any time prior to termination of this Proxy to exercise all voting and other rights (including, without limitation, the power to execute and deliver written consent with respect to the Sutter Shares) of the undersigned in his own discretion at every annual or special meeting of the stockholders of Sutter and at every continuation or adjournment thereof, and on every action or approval by written consent of the stockholders of Sutter in lieu of any such meeting.


Any obligation of the undersigned hereunder shall be binding upon successors and assigns of the undersigned.


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If any term or other provision of this Proxy is determined to be invalid, illegal, or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Proxy shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the undersigned agrees with Sutter to negotiate in good faith to modify this Proxy so as to effect the original intent of the parties as closely as possible.




Dated: July 31, 2003 American Residential Funding, Inc.,
a Nevada corporation

/s/ Vincent Rinehart ______________________________
By: Vincent Rinehart
Its: President





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IRREVOCABLE PROXY




The undersigned (i) a stockholder of American Residential Funding, Inc., a Nevada corporation (“AMRES”), and (ii) a warrantholder of Anza Capital, Inc., a Nevada corporation (“Anza”), hereby irrevocably (to the full extent permitted by law) appoints Vincent Rinehart and any individual designated by said individual, the attorney and proxy of the undersigned with full power of substitution and resubstitution, to the full extent of the undersigned’s rights and respect to (a) the 1,000,000 shares of Series A Preferred stock of the Company beneficially owned by the undersigned as of the date hereof (the “Preferred Shares”), and (b) the 1,000,000 shares of common stock of Anza which may be acquired by the undersigned upon exercise of the warrant dated July 31, 2003 (the “Warrant Shares”). In the event of the death or total disability of Vincent Rinehart during the term of this Proxy, then the Board of Directors of Anza, acting as a whole, shall automatically be appointed the attorney and proxy of the undersigned with respect to the Preferred Shares and the Warrant Shares until the termination of this Proxy by its terms. This Proxy shall be in full force and effect until the earlier to occur of (y) the undersigned’s valid sale or transfer of some or all of the Preferred Shares or the Warrant Shares to a third party not under common control with the undersigned, or (z) two (2) years from the date hereof.


This Proxy is irrevocable (to the fullest extent permitted by law), shall be deemed coupled with an interest, and is granted in connection with the Securities Exchange Agreement of even date hereof by and among Anza, AMRES, and the undersigned (the “Agreement”). Any and all certificates representing the Preferred Shares and/or the Warrant Shares shall bear a legend stating that such shares are the subject of this Proxy.


The attorney and proxy named above shall be empowered at any time prior to termination of this Proxy to exercise all voting and other rights (including, without limitation, the power to execute and deliver written consent with respect to the Preferred Shares and/or the Warrant Shares) of the undersigned in his own discretion at every annual or special meeting of the stockholders of AMRES or Anza, as applicable, and at every continuation or adjournment thereof, and on every action or approval by written consent of the stockholders of AMRES or Anza, as applicable, in lieu of any such meeting.


Any obligation of the undersigned hereunder shall be binding upon successors and assigns of the undersigned.


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If any term or other provision of this Proxy is determined to be invalid, illegal, or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Proxy shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the undersigned agrees with AMRES and/or Anza to negotiate in good faith to modify this Proxy so as to effect the original intent of the parties as closely as possible.




Dated: July 31, 2003 Sutter Holding Company, Inc.,
a Delaware corporation

/s/ Robert E. Dixon

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By: Robert E. Dixon
Its: Co-CEO and President




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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





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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 [phone]
Attn: Vince Rinehart





If to Sutter: Sutter Holding Company, Inc.
150 Post Street, Suite 405
San Francisco, CA 94108
Facsimile [phone]
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

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By: Vincent Rinehart By: Vincent Rinehart

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Its: President Its: President

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“Sutter”


Sutter Holding Company, Inc.


/s/ Robert E. Dixon

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By: Robert E. Dixon

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Its: Co-CEO and President

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Exhibit A


Certificate of Designation
AMRES Series A Preferred Stock

[teicker]

E-loan: Aktie verliert nach Quartalszahlen 10 Prozent

Die E-loan Inc., ein amerikanischer Online-Kredit-Anbieter, hat seine Ergebnisse für das abgelaufene dritte Quartal vorgelegt und die Erwartungen der Analysten übertroffen.

Während Analysten einen Gewinn von 10 Cents je Aktie erwarteten, meldete das Unternehmen einen Überschuss von 8,0 Mio. Dollar oder 12 Cents je Aktie nach einem Plus von 3,1 Mio. Dollar oder 5 Cents je Aktie im Vorjahreszeitraum. Der Umsatz stieg um 54 Prozent auf 43,8 Mio. Dollar.

Für das Gesamtjahr rechnet das Unternehmen mit einem Gewinn von 22 Mio. Dollar oder 34 Cents je Aktie bei Umsätzen von 159 Mio. Dollar. Analysten erwarten für diesen Zeitraum einen Gewinn von 37 Cents je Aktie.

Aktuell verliert die Aktie 10,4 Prozent auf 3,50 Dollar.

[Gosputin]

Rates in holding pattern
Quiet in bond markets keeps mortgages steady

The national average rate on the benchmark 30-year mortgage remained planted at 6.05 percent in the week ending Oct. 24, unchanged from the previous week, Freddie Mac said Thursday.


Mortgage Expo makes shopping for a loan quick and easy. Compare rates from over 800 lenders and 10,000 loan programs.

The mortgage agency, in its weekly tracking survey, also said the average 15-year loan was up slightly to 5.39 percent from 5.36 percent. The adjustable-rate loan pegged to a one-year Treasury index fell slightly to 3.76 percent from 3.79 percent.

Each of the three loan types required the payment of an average 0.7 points to achieve the rate.

Freddie Mac (FRE: news, chart, profile) Chief Economist Frank Nothaft said a quiet week in the bond markets held rates in place.

"There was no financial news that would push rates either up or down significantly," Nothaft said.

The relatively low rates continued to prop up home sales, Nothaft noted.

"Judging by the current flow of mortgage applications reported by the Mortgage Bankers Association, it looks like we will close out the year in record-breaking territory again. The dollar volume of home sales for the year will almost certainly surpass that of any other in real-estate history."

The MBA said that mortgage applications for home purchases rose 7.5 percent in the week ended Oct. 17. At the same time, refinance applications continued to drop, down nearly 6 percent, as the refi boom of the past two years left fewer consumers with high-rate loans.

The MBA forecast this week that mortgage originations in 2003 would hit a record $3.3 trillion, on the strength of record refinancing, accounting for about two-thirds of the total.

But next year originations will be cut in half, to $1.6 trillion, estimates Doug Duncan, the MBA`s chief economist. Almost all of the decline will come in refinance business, he told the group`s annual convention in San Diego this week. See full story.