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EXHIBIT 1. UNDERWRITING AGREEMENT WITH COMMUNITY BANC INVESTMENTS, INC.
Ohio State Bancshares, Inc.
111 S. Main Street
Marion, Ohio 43302
November 4, 1998
Community Banc Investments, Inc.
26 East Main Street
New Concord, Ohio 43762
Attn: Mr. Greig A. McDonald, President
RE: Underwriting of Common Stock, Par Value, $10.00, (the "Common Stock"),
to be Issued and Sold by Ohio State Bancshares, Inc.
Dear Mr. McDonald:
This letter confirms our agreement to retain Community Banc Investments,
Inc., a licensed securities dealer in Ohio ("Community Banc"), to serve as
underwriter, on a best efforts basis, of up to a maximum of 24,800 shares of the
Common Stock of Ohio State Bancshares, Inc., at a price of $47.00 per share,
subject to the terms, provisions, and conditions of this Agreement and in
accordance with the terms, provisions and conditions set forth in the Prospectus
(the "Prospectus"). The General Offering shall hereinafter collectively be
referred to as the "Offering."
1. REPRESENTATION AND WARRANTIES OF OHIO STATE BANCSHARES.
Ohio State Bancshares, Inc. represents and warrants to Community Banc that:
(a) Ohio State Bancshares, Inc., is a corporation duly organized
and existing in good standing under the laws of the State of Ohio with
corporate power and authority to own property and to carry on its business,
(b) The Offering is being made in accordance with the General
Corporation Law of the State of Ohio, and will be fully registered under
the Securities Act of 1933, as amended (the "Act"). The offering will
qualify for sale in each state in which the Company has shareholders under
each such state's respective "blue sky" laws.
(c) Ohio State Bancshares, Inc. has full corporate power and
authority to sign this Agreement and undertake the Offering as
contemplated, and no approvals or consents, except as may be required under
the Act and state securities laws is required for the consummation of the
Offering and any transactions contemplated thereby, and
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November 4, 1998
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(d) The Prospectus, any exhibits, schedules or attachments thereto,
or any written statement furnished to prospective investors by Ohio State
Bancshares, Inc. in connection with the Offering, does not or will not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make any statement therein not misleading.
There is no fact which Ohio State Bancshares, Inc. has not disclosed to
Community Banc or any prospective investor in writing which materially
affects adversely nor, so far as Ohio State Bancshares, Inc. can now
foresee, will materially affect adversely the business, prospects,
properties, profits, or condition (financial or otherwise) of Ohio State
Bancshares, Inc.
2. REPRESENTATION AND WARRANTIES OF COMMUNITY BANC.
Community Banc hereby represents and warrants to Ohio State Bancshares,
Inc. that:
(a) Community Banc is a licensed securities dealer in the State of
Ohio, which is the only state in which Community Banc will offer and sell
the Common Stock on behalf of Ohio State Bancshares, Inc., in the Offering,
and Community Banc shall remain duly licensed in such state throughout the
term of the offer and sale of the Common Stock and shall comply with all
statutes and other requirements applicable to it as a licensed securities
dealer,
(b) Community Banc will act in its capacity as underwriter of the
Common Stock only in accordance with the terms and conditions set forth
herein and in the Prospectus; and
(c) Community Banc has full corporate power and authority to sign
this Agreement and to undertake underwriting of the Offering as
contemplated.
3. SERVICES AND FEE.
Community Banc agrees to use its best efforts to sell shares of the Common
Stock of Ohio State Bancshares, Inc. in the Public Offering (as described
in the Prospectus) in Ohio. Community Banc shall have no obligation to
purchase any of the shares.
As consideration for Community Banc's services hereunder, Ohio State
Bancshares, Inc. shall pay to Community Banc (a) Two Dollars ($2.00) for
each share sold of the Common Stock sold by Community Banc in Ohio on
behalf of Ohio State Bancshares in the Public Offering. Ohio State
Bancshares shall not compensate Community Banc on behalf of Ohio State
Bancshares for any shares sold in the Rights Offering (as described in the
Prospectus). In no event will Community Banc's commission exceed 3% of the
total proceeds of the Offering.
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November 4, 1998
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4. COVENANT OF OHIO STATE BANCSHARES.
If any event shall have occurred as a result of which the Prospectus
(including any exhibits, schedules or attachments thereto) or any other
written materials previously furnished to prospective investors would
include any untrue statement of a material fact, or omit to state a
material fact necessary in order to make the statements therein nor
misleading, Ohio State Bancshares, Inc. shall notify Community Banc and,
upon Community Banc's request, shall prepare and furnish Community Banc
with a supplement or amendment to the Prospectus or other written
materials, as applicable, which will correct such statement or omission as
Community Banc may from time to time reasonably request.
5. INDEMNIFICATION.
(a) Ohio State Bancshares, Inc. shall indemnify and hold harmless
Community Banc, and each of its controlling persons within the meaning of
the Act, against any and all losses, claims, damages, liabilities, costs
and expenses (including attorneys' and experts' fees) to which Community
Banc or any such controlling person may become subject, insofar as such
losses, claims, damages, liabilities, costs and expenses (including
attorneys' and experts' fees), or actions in respect thereof, arise out of
or are based upon any actions, in connection with the Offering and sale of
the Common Stock by Ohio State Bancshares, Inc. or its agents (other than
by Community Banc, its employees or affiliates), employees or affiliates,
which are alleged to be in violation of the Act, or any other applicable
federal or state securities law or regulation or the terms and conditions
of the Offering set forth in the Prospectus.
(b) Community Banc shall indemnify and hold harmless Ohio State
Bancshares, Inc. and each of its controlling persons within the meaning of
the Act, against any and all losses, claims, damages, liabilities, costs
and expenses (including attorneys' and experts' fees) to which Ohio State
Bancshares, Inc. or any such controlling person may become subject, insofar
as such losses, claims, damages, liabilities, costs and expenses (including
attorneys' and experts' fees), or actions in respect thereof, arise out of
or are based upon the activities of Community Banc as underwriter in the
offering of the Common Stock, which are alleged to be in violation of the
Act or any other applicable federal or state securities law or regulation,
or the terms and conditions of the Offering set forth in the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under the Section 5, notify the indemnifying party of
the commencement thereof; but the
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omission to so notify the indemnifying party shall not relieve it from any
liability under the Section 5. In the event any such action is brought
against any indemnified party, and it notifies and indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, assume the defense thereof,
with counsel who shall be to the reasonable satisfaction of such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
6. REPRESENTATIONS AND INDEMNITIES TO SURVIVE THE OFFERING.
The respective indemnities, agreements, representations, warranties,
covenants and other statements of Ohio State Bancshares, Inc. and Community
Banc set forth in or made pursuant to this Agreement shall remain in full
force and effect, regardless of any investigation made by or on behalf of
Ohio State Bancshares, Inc. or Community Banc, or any controlling person of
either, and shall survive the consummation of the Offering.
7. SUCCESSORS.
This Agreement shall be binding upon and inure solely to the benefit
of Ohio State Bancshares, Inc. and Community Banc and to the extent
provided in Section 5, any person who controls Ohio State Bancshares, Inc.
or Community Banc, or their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of the
Agreement. No investor of any of the shares of the Common Stock shall be
constructed a successor or assign by reason merely of such purchase.
8. APPLICABLE LAW.
This Agreement shall be construed and enforced in accordance with the
laws of the State of Ohio and, to the extent that it may involve any United
States statute, with the laws of the United States.
9. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the parties
and no amendment, change, modification or alteration of this Agreement
shall be valid unless it is in writing and signed by the parties hereto.
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10. Original Document.
This Agreement may be executed by both parties in counterparts, each
of which shall be deemed an original, but all of such counterparts taken
together shall constitute one and the same Agreement.
If this letter accurately sets forth the understanding between us, please
sign the enclosed copy of this letter below and return the signed copy to Ohio
State Bancshares, Inc. at which time this letter will become a mutually binding
obligation.
Very truly yours,
Ohio State Bancshares, Inc.
By: /s/ Gary E. Pendleton
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Its: President and Chief Executive Officer
AGREED TO AS OF THE ABOVE DATE
COMMUNITY BANC INVESTMENTS, INC.
By: /s/ Greig A. McDonald
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Greig A. McDonald
President