EXHIBIT 1.1
This Escrow Agreement (the "Agreement") dated as
of is by and between Ultimate Sports
Entertainment, Inc., a Delaware corporation (the "Corporation") and the U.S.
Bank Trust National Association (the "Escrow Agent").
RECITALS
The Corporation desires to establish an escrow account with the Escrow Agent
into which certain monies and documents will be deposited and held in escrow
in connection with a proposed offering of up to Shares of common stock
in the Corporation (the Shares) for an aggregate subscription price of up to
$ .
NOW, THEREFORE, in consideration of the premises the Parties agree as follows:
1. ESCROW FEES: The Corporation hereby agrees to pay the Escrow Agent at
the opening of escrow an advance payment for all ordinary services rendered
hereunder (the "Escrow Fee") which shall be calculated in accordance with the
Escrow Agent's standard rate schedule. The Corporation further agrees to pay
the Escrow Agent reasonable fees, which shall be agreed upon between the
Parties, for any services in addition to those provided for herein to the
extent that the Corporation has expressly requested such extraordinary
services and has been made aware of their cost in advance of their
performance.
2. DEPOSITS: The Corporation shall deliver to the Escrow Agent all
checks, drafts and money orders ("Subscription Payments") and all subscription
Agreements and other related documents ("Subscription Documents") received by
the Corporation for the purchase of Shares from the purchasers thereof
("Subscribers"), including without limitation an IRS form W-8/W-9 for each
subscriber. All Subscription Payments shall be made payable U.S. Bank Trust
National Association as Escrow Agent for
Escrow
. The Corporation shall also provide a signed IRS form W-8/W-9 to
the Escrow Agent.
3. INVESTMENT OF FUNDS: All Subscription Payments shall be deposited in a
▇.▇.▇▇▇▇ Money Market account and shall upon clearance earn per diem interest
at a rate provided by U.S. Bank for such account.
4. TERMINATION DATE: For the purpose of this Agreement, the "Termination
Date" shall be at the close of business , unless
extended for up to ( ) days by election of the
Corporation, or the Corporation may change such date to an earlier date,
either will be effective by written notice to the Escrow Agent.
5. DISBURSEMENT OF FUNDS:
(a) TERMINATION OF THE OFFERING: If the Escrow Agent has not
received on or before the Termination Date, Subscription Payments in an
aggregate amount of not less than $ , then the Escrow Agent
shall release all Subscription Payments together with all interest accrued on
such funds and the corresponding Subscription Documents, to each Subscriber
respectively, at the address given by such Subscriber in the Subscription
Agreement. All disbursements by the Escrow Agent pursuant to the section
shall be made by the Escrow Agent's usual escrow checks and shall be mailed by
first class United States Postal Services mail, postage pre-paid, as soon as
practicable but not later than the third business day after the Termination
Date.
(b) CLOSING OF OFFERING: If the Escrow Agent has received on or
before the termination date, Subscription Payments in an aggregate amount of
not less than $ , and written acceptance of each Subscriber by the
Corporation then the Escrow Agent shall disburse all Subscription Payments
plus all interest accrued on such funds, to the Corporation in immediately
available funds to .
(c) WITHDRAWAL OF OFFERING: If the Escrow Agent receives a
withdrawal notice signed by the Corporation in the form of Exhibit I attached
hereto at any time prior to the Termination Date, then the Escrow Agent shall
disburse all funds and documents held in escrow in accordance with the
provisions of subsection 5(a) above.
6. COLLECTED FUNDS: No interest shall accrue on any Subscription Payment
and no Subscription Payment shall be disbursed pursuant to Section 5 until
such Subscription Payment has been received by the Escrow Agent in immediately
available funds.
7. LIABILITY OF ESCROW AGENT: In performing any duties under the Escrow
Agreement, the Escrow Agent shall not be liable to the Corporation, the
Corporation, any Subscriber or any Party for damages, losses, or expenses,
except for gross negligence or willful misconduct on part of the Escrow
Agent. The Escrow Agent shall not incur any such liability for (I) any act or
failure to act made or omitted in good faith, or (II) any action taken or
omitted in reliance upon any instrument, including any written statement or
affidavit provided for in this Agreement that the Escrow Agent shall in good
faith believe to be genuine, nor will the Escrow Agent be liable or
responsible for forgeries, fraud, impersonations, or determining the scope of
any representative authority. In addition, the Escrow Agent may consult with
legal counsel in connection with the Escrow Agent's duties under this
Agreement and shall be fully protected in any action taken, suffered, or
permitted by it in good faith in accordance with the advice of counsel. The
Escrow Agent is not responsible for determining and verifying the authority of
any person acting or purporting to act on behalf of any party to this
Agreement.
8. FEES AND EXPENSES: It is understood that the fees and usual charges
agreed upon for services of the Escrow Agent shall be considered compensation
for ordinary services as contemplated by this Agreement. In the event that
the conditions of this Agreement are not promptly fulfilled, or if the Escrow
Agent renders any service not provided for in this Agreement, or if the
Corporation requests a substantial modification of its terms, or if any
controversy arises, or if the Escrow Agent is made a party to, or intervenes
in, any litigation pertaining to this escrow or its subject matter, the Escrow
Agent shall be reasonably compensated for such extraordinary services and
reimbursed for all costs, attorney's fees, including allocated costs of
in-house counsel, and expenses occasioned by such default, delay, controversy
or litigation and the Escrow Agent shall have the right to retain all
documents and/or other things of value at any time held by the Escrow Agent in
this escrow until such compensation, fees, costs and expenses are paid. The
Corporation promises to pay these sums upon demand. Unless otherwise
provided, the Corporation will pay all of the Escrow Agent's usual charges and
the Escrow Agent may deduct such sums from the funds deposited.
9. CONTROVERSIES: If any controversy arises between the Parties to this
Agreement, or with any other Party, concerning the subject matter of this
Agreement, its terms or conditions, the Escrow Agent will not be required to
determine the controversy or to take any action regarding it. The Escrow
Agent may hold all documents and funds and may wait for settlement of any such
controversy by final appropriate legal proceedings or other means as, in the
Escrow Agent's discretion, the Escrow Agent may require, despite what may be
set forth elsewhere in this Agreement. In such event, the Escrow Agent will
not be liable for interest or damage. Furthermore, the Escrow Agent may at
its option file an action of interpleader requiring the Parties to answer and
litigate any claims and rights among themselves. The Escrow Agent is
authorized to deposit with the clerk of the court all documents and funds held
in escrow, except all costs, expenses, charges and reasonable attorney fees
incurred by the Escrow Agent due to the interpleader action and which the
Corporation agrees to pay. Upon initiating such action, the Escrow Agent
shall be fully released and discharged of and from all obligations and
liability imposed by the terms of this Agreement.
10. INDEMNIFICATION OF ESCROW AGENT: The Corporation and its successors
and assigns agree jointly and severally to indemnify and hold the Escrow Agent
harmless against any and all losses, claims, damages, liabilities, and
expenses, including reasonable costs of investigation, counsel fees, including
allocated costs of in-house counsel and disbursements that may be imposed on
the Escrow Agent or incurred by the Escrow Agent in connection with the
performance of its duties under this Agreement, including but not limited to
any litigation arising from this Agreement or involving its subject matter.
The Escrow Agent shall have a first lien on the property and papers held under
this Agreement for such compensation and expenses.
11. WITHHOLDING OF INTEREST: The Corporation acknowledges that payment of
any interest earned on the funds invested in this escrow will be subject to
backup withholding penalties unless a properly completed Internal Revenue
Service Form W-8 or W-9 certification is submitted to Escrow Agent.
12. RESIGNATION OF ESCROW AGENT: The Escrow Agent may resign at any time
upon giving at least (30) days written notice to the Corporation provided,
however, that no such resignation shall become effective until the appointment
of a successor escrow agent which shall be accomplished as follows: The
Corporation shall use its best efforts to obtain a successor escrow agent
within thirty (30) days after receiving such notice. If the Corporation fails
to agree upon a successor escrow agent within such time, the Escrow Agent
shall have the right to appoint a successor escrow agent authorized to do
business in the state of California. The successor escrow agent shall execute
and deliver an instrument accepting such appointment and it shall without
further acts, be vested with all the estates, properties, rights, powers, and
duties of the predecessor escrow agent as if originally named as escrow
agent. The Escrow Agent shall thereupon be discharged from any further duties
and liability under this Agreement.
13. AUTOMATIC SUCCESSION: Any company into which the Agent may be merged
or with which it may be consolidated, or any company to whom Agent may
transfer a substantial amount of its Global Escrow business, shall be the
Successor to the Agent without the execution or filing of any paper or any
further act on the part of any of the Parties, anything herein to the contrary
notwithstanding.
14. TERMINATION: This Agreement shall terminate upon the completion of
the conditions of Sections 5(a) or 5(b) hereof, without any notices to any
person, unless earlier terminated pursuant to the terms hereof.
15. MISCELLANEOUS:
(a) GOVERNING LAWS: This Agreement is to be construed and interpreted
according to California law.
(b) COUNTERPART: This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(c) NOTICES: All instructions, notices and demands herein provided for
shall be in writing and shall be mailed postage prepaid, first class mail,
delivered by courier, or telecopies as follows:
If to the Corporation: If to the Escrow Agent:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇.▇. Bank Trust National Association
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
(d) AMENDMENTS: This Agreement may be amended by written notice
signed by the Corporation, except that Section 7 through Section 13 may be
amended only with the consent of the Escrow Agent. Any notice to be executed
by or on behalf of the Corporation shall be valid if signed
by .
The [Issuer] represents and agrees that it has not made nor will it in
the future make any representation that states or implies that the Escrow
Agent has endorsed, recommended or guaranteed the purchase, value, or
repayment of the Securities offered for sale by the [Issuer]. The [Issuer]
further agrees that it will insert in any prospectus, offering circular,
advertisement, subscription agreement or other document made available to
prospective purchasers of the Securities the following statement in bold face
type: "U.S. Bank Trust National Association is acting only as an escrow
agent in connection with the offering of Securities described herein, and has
not endorsed, recommended or guaranteed the purchase, value or repayment of
such Securities", and will furnish to the Escrow Agent a copy of each such
prospectus, offering circular, advertisement, subscription agreement or other
document at least 5 business days prior to its distribution to prospective
purchasers of the Securities.
THE CORPORATION: ESCROW AGENT:
Ultimate Sports Entertainment, Inc. U.S. Bank Trust National
Association
By:_____________________________ By:_____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, V.P./Escrow Officer