SDNB FINANCIAL CORP
1420 Kettner Boulevard
San Diego, California 92101
March ___, 1995
American Stock Transfer
& Trust Company
40 Wall Street
New York, New York 10005
Attn: George Karfunkel
President
Re: Agreement for Subscription Agent Services
Ladies and Gentlemen:
The purpose of this letter is to reflect the
agreement of SDNB Financial Corp. (the "Company") and
American Stock Transfer & Trust Company ("American")
regarding American's acting as the Subscription Agent (as
defined below) in connection with the Company's offering
(the "Subscription Offering") of up to 769,582 shares of its
common stock, no par value ("Common Stock"), pursuant to
transferable subscription rights at a subscription price of
$4.34 per share. The terms of the Subscription Offering are
more fully described in the Prospectus relating to such
offering. A copy of the Preliminary Prospectus is attached
hereto as Exhibit A (such document, in the form declared
effective by the Securities Exchange Commission and as it
may be subsequently amended, shall be referred to herein as
the "Prospectus"). Unless otherwise specified, capitalized
terms used herein and defined in the Prospectus shall have
the same meanings herein as set forth for them in the
Prospectus.
1. Appointment of Subscription Agent. The Company hereby
appoints American as the subscription agent (the "Subscription
Agent") for the Subscription Offering. As Subscription Agent,
American hereby agrees to perform the following services for the
Company in accordance with the terms of the Prospectus:
(a) Issue new and replacement Subscription Warrants to
Rights Holders;
(b) Mail offering materials to Rights Holders;
(c) Hold offering materials for Rights Holders whose
addresses are outside of the continental United States or are A.P.O. or
F.P.O. addresses;
(d) Attempt to sell Subscription Rights upon the
request of Rights Holders;
(e) Effect transfers, divisions, and combinations of
Subscription Warrants upon the request of Rights Holders;
(f) Collect checks from subscribing Rights Holders and
hold the proceeds in trust in an interest bearing account for the
account of the Company;
(g) Communicate with Rights Holders;
(h) Communicate with Depository Trust Company and all
brokers regarding their respective record date positions;
(i) Report to the Company daily on the total number of
shares of Common Stock subscribed for, the amount of funds received, and
the total number of Subscription Rights exercised;
(j) Consult with the Company for specific instructions
as to acceptance or rejection of subscriptions received after the
Expiration Date and subscriptions otherwise failing to comply with the
requirements of the Prospectus and the terms of the Subscription Warrants;
(k) Allocate Common Stock not required to satisfy the
Basic Subscription Rights to those Rights Holders who properly elect to
oversubscribe;
(l) After the Expiration Date, consult with the
Company regarding the disposition of unused or cancelled Subscription
Warrants;
(m) Remit subscription proceeds to the Company;
(n) Issue certificates for Common Stock to subscribing
Rights Holders; and
(o) Update the Company's share register.
2. No Solicitations. American hereby agrees that it shall
not at any time advise any person as to whether such person should
subscribe for shares of Common Stock pursuant to the Subscription
Offering or take any other action that may be deemed a solicitation.
3. Payment. In exchange for American's Subscription Agent
services, the Company hereby agrees to pay American $10,000.00,
which payment shall be due and payable upon completion of the
Subscription Offering.
4. Conditions to Subscription Agent's Performance.
American undertakes the duties and obligations imposed hereby upon the
following terms and conditions, by all of which the Company shall
be bound:
(a) American may consult with legal counsel (who may
be, but is not required to be, legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization
and protection to American as to any actions taken or omitted by
American in good faith and in accordance with such opinion;
(b) Whenever, in the performance of its duties
hereunder, American shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof is herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by the President, the Chief Financial Officer
or any Vice President of the Company and delivered to American;
and such certificate shall be full authorization to American for
any action taken or suffered in good faith by American under the
provisions hereof in reliance upon such certificate;
(c) American shall be liable hereunder only for its
own negligence or willful misconduct;
(d) American shall not be liable for or by reason of
any of the statements of fact or recitals contained in the Prospectus or
in the Subscription Warrants or be required to verify the same,
except for information contained therein that relates to American; all
statements and recitals contained in the Prospectus or in the
Subscription Warrants that do not relate to American are and shall be
deemed to have been made by the Company only.
(e) American shall not be under any responsibility in
respect of the validity of the Subscription Warrants or the execution
and delivery thereof (except the due execution thereof by American), nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in the Prospectus or in any Subscription Warrant;
nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of
Common Stock to be issued pursuant to the Subscription Offering or any
Subscription Warrant or as to whether any shares of Common Stock will,
when issued, be validly authorized and issued, fully paid,
and nonassessable.
(f) The Company agrees that it will indemnify the
Subscription Agent for, and to hold it harmless against, any loss,
liability, or expense incurred without negligence or bad faith on the
part of the Subscription Agent for anything done or omitted by the
Subscription Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises, provided that the Subscription Agent shall have
provided the Company with notice of any such claim promptly after
such claim became known to the Subscription Agent, and provided
further that the Company shall have the right to assume the
defense of any such claim upon receipt of written notice thereof
from the Subscription Agent. If the Company assumes the defense
of any such claim, the Subscription Agent shall be entitled to
participate in (but not control) the defense of any such claim at
its own expense. The Company shall not indemnify the
Subscription Agent with respect to any claim or action settled
without its consent, which consent shall not be unreasonably
withheld.
(g) The Company agrees that it will perform, execute,
acknowledge, and deliver or cause to be performed, executed,
acknowledged, and delivered all such further and other acts,
instruments, and assurances as may reasonably be required by
American for the carrying out or performing by American of the
provisions hereunder.
(h) Nothing herein shall preclude American from acting
in any other capacity for the Company.
Please indicate your acceptance of the foregoing
terms by executing this letter on the line provided below
and returning it to the undersigned.
Very truly yours,
SDNB FINANCIAL CORP.
By:
Murray L. Galinson
President and Chief
Executive Officer
Accepted and agreed to
this ____ day of March, 1995:
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By:
George Karfunkel
President