Exhibit 1.2
ESCROW AGREEMENT
This Escrow Agreement made and entered into as of , 2002, by and among
XxXXXXXX & COMPANY, INC., a Virginia corporation (the "Underwriter"), CARDINAL
FINANCIAL CORPORATION, a Virginia corporation ("Cardinal"), and SUNTRUST BANK, a
Georgia banking corporation (the "Escrow Agent").
R E C I T A L S:
A. Cardinal proposes to sell up to 5,000,000 shares (the "Shares") of
Cardinal's common stock, par value $1.00 (the "Common Stock"), to the public at
a price of $______ per share (the "Offering"). Cardinal reserves the right to
increase the total number of Shares by not more than 750,000 shares.
B. Cardinal has retained the Underwriter, as selling agent for Cardinal on
a best efforts basis, to sell the Shares in the Offering, and the Underwriter
has agreed to sell the Shares as Cardinal's selling agent on a best efforts
basis in the Offering, and the Underwriter has agreed to serve in this capacity,
the terms of which relationship are set forth in an Underwriting Agreement
between Cardinal and the Underwriter, the form of which is attached hereto as
Exhibit A (the "Underwriting Agreement").
C. The Underwriter will enter into agreements with other brokers/dealers
(the "Selected Dealers" or individually, the "Selected Dealer") to assist in the
sale of the Shares.
D. The Escrow Agent is willing to hold the proceeds from the Offering in
escrow pursuant to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained in this Agreement, it is hereby agreed as follows:
1. Establishment of the Escrow Account. On or prior to the date of
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commencement of the Offering, the parties shall establish a non-interest-bearing
account with the Escrow Agent, which escrow account shall be entitled "Cardinal
Financial Corporation, Escrow Account" (the "Escrow Account"). The Underwriter
shall provide instructions to the Escrow Agent to remit payment for the Shares
by wire transfer of immediately available funds as follows:
SunTrust Bank
AHA #051 000020
Credit Account #
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Account Name:
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Attention:
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FBO: Cardinal Financial Corporation
2. Escrow Period. The escrow period (the "Escrow Period") shall begin
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with the commencement of the Offering and shall terminate upon the Closing Date
(as defined in Section 5 of this Agreement), or ______________, 2002, whichever
first occurs. During the
Escrow Period, Cardinal is aware and understands that it is not entitled to any
funds received into escrow and no amounts deposited by the Escrow Agent shall
become property of Cardinal or any other entity, or be subject to the debts of
Cardinal or any other entity.
3. Deposits into the Escrow Account. Funds received from purchasers by
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the Underwriter, or Selected Dealers shall be deposited in the Escrow Account.
All money so deposited in the Escrow Account is hereinafter referred to as the
"Escrow Funds". The Escrow Account shall be a non-interest bearing account.
4. Delivery of Escrow Account Proceeds. At the Closing (as defined in
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Section 5 of this Agreement), the Underwriter and Cardinal shall provide the
Escrow Agent with written directions for the distribution of the Escrow Funds,
and the Escrow Agent agrees to distribute the Escrow Funds pursuant to such
written directions. If no direction is received on or before 5:00 p.m.,
_______________, 2002 (unless such time shall be extended by written agreement
of the Underwriter, Cardinal and the Escrow Agent), the Escrow Agent shall
return the Escrow Funds to the parties that made payments to the Escrow Account
and this Agreement shall be of no further force or effect.
5. Closing Date. The "Closing" and "Closing Date" shall be that date
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specified in the Underwriting Agreement.
6. Investment of Escrow Account. The Escrow Agent shall deposit all
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subscription funds it receives in the Escrow Account, which shall be a
non-interest-bearing bank account at SunTrust Bank.
7. Compensation of Escrow Agent. The Underwriter shall pay the Escrow
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Agent a fee for its services hereunder in an amount equal to $_______________,
which amount shall be paid on the Closing Date. In the event that the Offering
is canceled for any reason, the Underwriter shall pay the Escrow Agent its fee
within ten (10) days after all of the Escrow Funds have been refunded to the
parties that made payment to the Escrow Account. No such fee or any other monies
whatsoever shall be paid out of or chargeable to the funds on deposit in the
Escrow Account.
8. Duties and Rights of the Escrow Agent. The foregoing agreements and
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obligations of the Escrow Agent are subject to the following provisions:
(a) The Escrow Agent's duties hereunder are limited solely to the
safekeeping of the Escrow Account and the delivery of the Escrow Account in
accordance with the terms of this Agreement. It is agreed that the duties of the
Escrow Agent are only such as herein specifically provided, being purely of a
ministerial nature, and the Escrow Agent shall incur no liability whatsoever
except for negligence, willful misconduct or bad faith. The Escrow Agent shall
have no duty with respect to the Shares other than to exercise reasonable care
in acquiring and delivering the same in accordance with this Agreement.
(b) The Escrow Agent is authorized to rely on any document believed
by the Escrow Agent to be authentic in making any delivery of the Escrow Account
or otherwise acting under this Agreement. It shall have no responsibility for
the genuineness or the validity of
any document or any other item deposited with it, and it shall be fully
protected in acting in accordance with this Agreement or instructions received.
(c) Cardinal and the Underwriter hereby waive any suit, claim, demand
or cause of action of any kind that they may have or may assert against the
Escrow Agent arising out of or relating to the execution or performance by the
Escrow Agent of this Agreement, unless such suit, claim, demand or cause of
action is based upon the negligence, willful misconduct, or bad faith of the
Escrow Agent.
9. Notices. It is further agreed as follows:
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(a) All notices given hereunder will be in writing, served by
registered or certified mail, return receipt requested, postage prepaid, or by
hand-delivery , to the parties at the following addresses:
To Cardinal:
Cardinal Financial Corporation
00000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx
Attention: Xx. Xxxxx X. Xxxxxxxxx
To the Underwriter:
XxXxxxxx & Company, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, Ir.
To the Escrow Agent:
SunTrust Bank Corporate Trust
Department 000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000 Attention:
10. Miscellaneous.
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(a) This Agreement shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective successors and
assigns.
(b) If any provision of this Agreement shall be held invalid by any
court of competent jurisdiction, such holding shall not invalidate any other
provision hereof.
(c) This Agreement shall be governed by the applicable laws of the
Commonwealth of Virginia.
(d) This Agreement may not be modified except in writing signed by
the parties hereto.
(e) All demands, notices, approvals, consents, requests and other
communications hereunder shall be given in the manner provided in this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective names, all as of the date first above written.
XXXXXXXX & COMPANY, INC.
By:
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Xxxxxxx X. XxXxxxxx, Xx.
President
CARDINAL FINANCIAL CORPORATION
By:
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Xxxxxxx X. Xxxxxxxxx
Vice Chairman, President and
Chief Executive Officer
SUNTRUST BANK
By:
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Name:
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Title:
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