EXHIBIT 99.2
ESCROW AGREEMENT IN ACCORDANCE WITH RULE 419
UNDER THE SECURITIES ACT OF 1933
ESCROW AGREEMENT, dated as of February 28, 2002, (the "Agreement") by
and between Buyenergy Corporation a Nevada corporation (the "Company") and
Galleon Merchant Banking, Inc., (the "Escrow Agent").
The Company, through its directors and officers, will sell up to
150,000 shares of Common Stock, par value $.0001 (the "shares"), as more fully
described in the Company's definitive Prospectus dated October 15, 2001
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 March 5, 2002 (the
"Prospectus").
The Company desires that the Escrow Agent accept all offering proceeds,
with no deduction of cash paid for underwriting commissions, underwriting
expenses and dealer allowances and amounts permitted to be released to the
Company under Rule 419(b)(2)(vi), a copy of which rule is attached hereto and
made a part hereof, 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.
2. Deposit of Offering Proceeds and Share Certificates. Subject to Rule
419, upon the Company's receipt and acceptance of subscriptions and
Offering Proceeds, the Company shall promptly deliver to the Escrow
Agent a certified or bank check in the amount of the Offering Proceeds
drawn to the order of the Escrow Agent or, alternatively, drawn to the
order of the Company but endorsed by the Company for collection by the
Escrow Agent and credited to the Escrow 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 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 [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. 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 (ii) written notification from the
Company to the Escrow Agent to deliver the Offering Proceeds to another
escrow agent in accordance with Paragraph 5.8 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 deliver
the Offering Proceeds and securities to such other escrow agent, as the
case may be, whereupon 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.
4. Concerning the Escrow Agent.
---------------------------
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 best 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), 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.
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 best 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 reasonable compensation from the
Company for all services rendered by it hereunder.
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.
-------------
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, two (2) 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.
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 28th day of February 2002.
By: /s/Xxxxxxxx X. Xxxxxx
---------------------
