EXHIBIT 99.2
ESCROW AGREEMENT IN ACCORDANCE WITH RULE 419
UNDER THE SECURITIES ACT OF 1933
ESCROW AGREEMENT, dated as of April 17, 2002, (the "Agreement") by and
between Buyenergy Corporation a Nevada corporation (the "Company") and Wachovia
Bank, National Association, (the "Escrow Agent").
The Company, through the use of its underwriter, Galleon Merchant
Banking, Inc., will sell up to 150,000 shares of Common Stock, par value $.001
(the "Shares"), as more fully described in the Company's definitive Prospectus
dated April 25, 2002 comprising part of the Company's Registration Statement on
Form SB-2, as amended (the "Registration Statement") under the Securities Act of
1933, as amended (the "Act") (File No. 333-72260) declared effective on or about
April 25, 2002 (the "Prospectus").
The Company desires that the Escrow Agent accept all offering proceeds,
after deduction of cash paid for underwriting commissions, underwriting expenses
and dealer allowances and with no deduction of amounts permitted to be released
to the Company under Rule 419(b)(2)(vi) to be derived by the Company from the
sale of the Shares (the "Offering Proceeds"), as well as the share certificates
representing the Shares issued in connection with the Company's offering, in
escrow, to be held and disbursed as hereinafter provided.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Escrow Agent. The Company hereby appoints the Escrow
Agent to act in accordance with and subject to the terms of this
Agreement, and the Escrow Agent hereby accepts such appointment and
agrees to act in accordance with and subject to such terms. The Escrow
Agent is hereby directed to created and establish the Buyenergy
Corporation Escrow Account (the "Escrow Account" into which shall be
deposited and credited the amounts and share certificates or other
securities described herein.
2. Deposit of Offering Proceeds and Share Certificates. Subject to Rule
419 (the provisions of which the Escrow Agent shall not be charged with
knowledge of), upon the Company's receipt and acceptance of
subscriptions and Offering Proceeds, in the form of checks, drafts or
money orders payable to the order of BuyEnergy Escrow Account, the
Company shall promptly deliver to the Escrow Agent the Offering
Proceeds for credit to the Escrow Account. The Offering Proceeds shall
be
invested in an obligation that constitutes a "deposit," as that term
is defined in section 3(1) of the Federal Deposit Insurance Act.
The Offering Proceeds and any interest or dividend thereon, if any,
shall be held for the sole benefit of the purchasers of the Shares.
Further, such interest or dividends, if any, shall be held in the
Escrow Account until the funds are released in accordance with the
provisions of Rule 419. If the Offering Proceeds are returned to the
purchasers, the purchasers shall receive the interest or dividends, if
any. If the Offering Proceeds are released to the Company, the Company
shall receive the interest or dividends, if any.
The deposit account records of the Escrow Agent will provide that funds
in the Escrow Account are held for the benefit of the purchasers named
and identified in accordance with 12 CFR part 330.1 of the regulations
of the Federal Deposit Insurance Corporation, and the records of the
Escrow Agent, maintained in good faith and in the regular course of
business, must show the name and interest of each party to the account.
All share certificates representing the Shares issued in connection
with the Company's offering shall also be deposited by the Company
directly into the Escrow Account promptly upon issuance. The identity
of the purchasers of the securities shall be included on the stock
certificates or other documents evidencing such securities. Securities
held in the Escrow Account are to remain as issued and deposited and
shall be held for the sole benefit of the purchasers, who shall have
voting rights with respect to securities held in their names, as
provided by applicable state law. No transfer or other disposition of
securities held in the Escrow Account or any interest related to such
securities shall be permitted other than by will or the laws of descent
and distribution, or pursuant to a qualified domestic relations order
as defined by the Internal Revenue Code of 1986 as amended [26 U.S.C. 1
et seq.], or Title 1 of the Employee Retirement Income Security Act of
1974, as amended [29 U.S.C. 1001 et seq.], or the rules thereunder.
Warrants, convertible securities or other derivative securities, if
any, relating to securities held in the Escrow Account may be exercised
or converted in accordance with their terms; provided however, that
securities received upon exercise or conversion, together with any cash
or other consideration paid in connection with the exercise or
conversion, are promptly deposited into the Escrow Account.
3. Disbursement of the Escrow Account. The commission relating to a
particular sale shall be released by the Escrow Agent to the
Underwriter immediately.
Upon the earlier of (i) receipt by the Escrow Agent of a signed
representation from the Company to the Escrow Agent, that the
requirements of Rule 419(e)(1) and (e)(2) have been met, and
consummation of an acquisition(s) meeting the
requirements of Rule 419(e)(2) or then, in such event, the Escrow Agent
shall disburse the Offering Proceeds (inclusive of any interest
thereon) to the Company and the securities to the purchasers or
registered holders identified on the deposited securities or (ii)
written notification from the Company to the Escrow Agent to deliver
the Offering Proceeds to another escrow agent then, in such event, the
Escrow Agent shall deliver the Offering Proceeds and securities to such
other escrow agent. In either case, thereupon, the Escrow Agent shall
be released from further liability hereunder.
Notwithstanding the foregoing, if an acquisition meeting the
requirements of Rule 419(e)(1) has not occurred by a date within 18
months after the effective date of the Registration Statement, funds
held in the Escrow Account shall be returned by first class mail or
equally prompt means to the purchasers within five business days
following that date. The Company shall promptly inform the Escrow Agent
in writing of the effective date of the Registration Statement.
4. Concerning the Escrow Agent.
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The Escrow Agent shall not be liable for any actions taken or omitted
by it, or any action suffered by it to be taken or omitted by it, in
good faith and in the exercise of its own good faith judgment, and may
rely conclusively and shall be protected in acting upon any order,
notice demand, certificate, opinion or advice of counsel (including
counsel chosen by the Escrow Agent, the fees for any such counsel being
the obligation of the Company to pay), statement, instrument, report or
other paper or document (not only as to its due execution and the
validity and effectiveness of its provision, but also as to the truth
and acceptability of any information therein contained) which is
believed by the Escrow Agent to be genuine and to be signed or
presented by the proper person or person. Without limiting the
foregoing, the Escrow Agent shall be fully protected and shall incur no
liability whatsoever in relying upon signed representations of the
Company delivered pursuant to the provisions hereof.
The Escrow Agent shall not be bound by any notice or demand, or any
waiver, modification, termination or rescission of this Agreement
unless evidenced by a writing delivered to the Escrow Agent signed by
the proper party or parties and, if the duties or rights of the Escrow
Agent are affected, unless it shall have given its prior written
consent thereto.
The Escrow Agent shall not be responsible for the sufficiency or
accuracy, the form of, or the execution validity, value or genuineness
of any document or property received, held or delivered by it
hereunder, or of any signature or endorsement thereon, or for any lack
of endorsement thereon, or for any description therein, nor shall the
Escrow Agent be responsible or liable in any respect on account of the
identity, authority or rights of the person executing or
delivering or purporting to execute or deliver any document or property
paid or delivered by the Escrow Agent under the provisions hereof.
The Escrow Agent shall not be liable for any loss which may be incurred
by reason of any investment of any monies or properties which it holds
hereunder. The Escrow Agent shall have the right to assume, in the
absence of written notice to the contrary from the proper person or
persons, that a fact or an event by reason of which an action would or
might be taken by the Escrow Agent does not exist or has not occurred,
without incurring liability for any action taken or omitted, in good
faith and in the exercise of its own good faith judgment, in reliance
upon such assumption.
The Escrow Agent shall be indemnified and held harmless by the Company
from and against any expenses, including counsel fees and
disbursements, or loss suffered by the Escrow Agent in connection with
any action, suit or other proceeding involving any claim, or in
connection with any claim or demand, which in any way directly or
indirectly arises out of or relates to this Agreement, the services of
the Escrow Agent hereunder, the monies or other property held by it
hereunder or any such expense or loss. Promptly after the receipt by
the Escrow Agent of notice of any demand or claim or the commencement
of any action, suit or proceeding, the Escrow Agent shall, if a claim
in respect thereof shall be made against the other parties hereto,
notify such parties thereof in writing; but the failure by the Escrow
Agent to give such notice shall not relieve any party from any
liability which such party may have to the Escrow Agent hereunder. Upon
the receipt of such notice, the Escrow Agent, in its sole discretion,
may commence an action in the nature of interpleader in an appropriate
court to determine ownership or disposition of the Escrow Account or it
may deposit the Escrow Account with the clerk of any appropriate court
or it may retain the Escrow Account pending receipt of a final,
non-appealable order of a court having jurisdiction over all of the
parties hereto directing to whom and under what circumstances the
Escrow Account is to be disbursed and delivered.
The Escrow Agent shall be entitled to $1,000, plus its counsel fees
incurred relating to the execution and delivery hereof of $500 as
compensation from the Company for all services rendered by it
hereunder. In addition, to the extent necessary to retain counsel after
the execution and delivery hereof to advise it of its duties and
responsibilities hereunder, the Company shall reimburse the Escrow
Agent for the fees and expenses of such counsel. Such additional fees
and expenses shall not be paid out of the Offering Proceeds, but shall
be payable directly by the Company.
From time to time on and after the date hereof, the Company shall
deliver or cause to be delivered to the Escrow Agent such further
documents and instruments and shall do or cause to be done such further
acts as the Escrow Agent shall reasonably request (it being understood
that the Escrow Agent shall have no obligation to make such request) to
carry out more effectively the
provisions and purposes of this Agreement, to evidence compliance
herewith or to assure itself that it is protected in acting hereunder.
The Escrow Agent may resign at any time and be discharged from its
duties as Escrow Agent hereunder by its giving the Company at least
thirty (30) days' prior written notice thereof. As soon as practicable
after its resignation, the Escrow Agent shall turn over to a successor
escrow agent appointed by the Company, all monies and property held
hereunder upon presentation of the document appointing the new escrow
agent and its acceptance thereof. If no new escrow agent is so
appointed in the sixty (60) day period following the giving of such
notice of resignation, the Escrow Agent may deposit the Escrow Account
with any court it deems appropriate.
The Escrow Agent shall resign and be discharged form its duties as
Escrow Agent hereunder if so requested in writing at anytime by the
Company, provided, however, that such resignation shall become
effective only upon acceptance of appointment by a successor escrow
agent as provided above. Notwithstanding anything herein to the
contrary, the Escrow Agent shall not be relieved from liability
thereunder for its own gross negligence or its own willful misconduct.
5. Miscellaneous.
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This Agreement shall for all purposes be deemed to be made under and
shall be construed in accordance with the laws of the State of Florida.
This Agreement contains the entire agreement of the parties hereto with
respect to the subject matter hereof and, except as expressly provided
herein, may not be changed or modified except by an instrument in
writing signed by the party to be charged.
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation
thereof.
This Agreement shall be binding upon and inure to the benefit of the
respective parties hereto and their legal representatives, successors
and assigns.
Any notice or other communication required or which may be given
hereunder shall be in writing and either be delivered personally or be
mailed, certified or registered mail, return receipt requested, postage
prepaid, and shall be deemed given when so delivered personally or, if
mailed, five (5) days after the date of mailing. The parties may change
the persons and addresses to which the notices or other communications
are to be sent by giving written notice to any such change in the
manner provided herein for giving notice. The notice addresses of the
parties are as follows:
Buyenergy Corporation
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Wachovia Bank, National Association
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Corporate Trust Department
WITNESS the execution of this Agreement as of the date first above written.
BUYENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, President
This Escrow Agreement is accepted as of the 17th day of April 2002.
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/Xxxxx Xxxxx
