EXHIBIT H1 LIMITED STANDSTILL AGREEMENT
LIMITED
STANDSTILL AGREEMENT
This
AGREEMENT (the "Agreement") is made as of the ___ day of April, 2005, by the
signatories
hereto (each a "Holder"), in connection with his ownership of equity of Energy
& Engine Technology Corporation, a Nevada corporation (the
"Company").
NOW,
THEREFORE, for good and valuable consideration, the sufficiency and receipt of
which consideration are hereby acknowledged, Holder agrees as
follows:
1. |
Background. |
a.
|
Holder
is the beneficial owner of the amount of shares of the Common Stock,
$0.001 par value, of the Company (“Common Stock”) designated on the
signature page hereto. |
x. |
Xxxxxx
acknowledges that the Company has entered into or will enter into an
agreement with each subscriber (“Subscription Agreement”) to the
Company’s
secured
convertible promissory notes and warrants
(the “Subscribers”), for the sale of an aggregate of up to $1,500,000 of
secured
convertible promissory notes and warrants to
the Subscribers (the “Offering”). Holder understands that, as a condition
to proceeding with the Offering, the Subscribers have required, and the
Company has agreed to provide an agreement from the Holder to refrain from
selling any securities of the Company for a period of twelve months from
the Actual Effective Date, as defined in the Subscription Agreement (the
"Restriction Period"). |
2. |
Share
Restriction. |
a. |
Holder
hereby agrees that during the Restriction Period, the Holder will not sell
or otherwise dispose of any shares of Common Stock or any options,
warrants or other rights to purchase shares of Common Stock or any other
security of the Company which Holder owns or has a right to acquire as of
the date hereof or hereafter, other than in connection with an offer made
to all shareholders of the Company or any merger, consolidation or similar
transaction involving the Company. Holder further agrees that the Company
is authorized to and the Company agrees to place "stop orders" on its
books to prevent any transfer of shares of Common Stock or other
securities of the Company held by Holder in violation of this
Agreement. |
b. |
Any
subsequent issuance to and/or acquisition of shares or the right to
acquire shares by Holder will be subject to the provisions of this
Agreement. |
c. |
The
foregoing restrictions notwithstanding the Holder may sell during the
Restriction Period, up to five percent (5%) of the amount of shares of
Common Stock actually owned by Holder on the Initial Closing Date (as
defined in the Subscription Agreement). In no event may more than one
percent (1%) of the amount of shares of Common Stock actually owned by the
Holder on the Initial Closing Date be sold during any thirty (30) day
period. |
190
d.
|
Notwithstanding
the foregoing restrictions on transfer, the Holder may, at any time and
from time to time during the Restriction Period, transfer the Common Stock
(i) as bona fide gifts or transfers by will or intestacy, (ii) to any
trust for the direct or indirect benefit of the undersigned or the
immediate family of the Holder, provided that any such transfer shall not
involve a disposition for value, (iii) to a partnership or LLC which is
the general partner of a partnership or LLC of which the Holder is a
general partner or manager, provided, that, in the case of any gift or
transfer described in clauses (i), (ii) or (iii), each donee or transferee
agrees in writing to be bound by the terms and conditions contained herein
in the same manner as such terms and conditions apply to the undersigned.
For purposes hereof, "immediate family" means any relationship by blood,
marriage or adoption, not more remote than first
cousin. |
3. |
Miscellaneous. |
a. |
At
any time, and from time to time, after the signing of this Agreement
Holder will execute such additional instruments and take such action as
may be reasonably requested by the Subscribers to carry out the intent and
purposes of this Agreement. |
b. |
This
Agreement shall be governed, construed and enforced in accordance with the
laws of the State of New York
without regard to conflicts of laws principles that would result in the
application of the substantive laws of another jurisdiction, except to the
extent that the securities laws of the state in which Holder resides and
federal securities laws may apply. Any proceeding brought to enforce this
Agreement may be brought exclusively in courts sitting in New York County,
New York. |
c. |
This
Agreement contains the entire agreement of the Holder with respect to the
subject matter hereof. |
d. |
This
Agreement shall be binding upon Holder, its legal representatives,
successors and assigns. |
e. |
This
Agreement may be signed and delivered by facsimile and such facsimile
signed and delivered shall be enforceable. |
f. |
The
Company agrees not to take any action or allow any act to be taken which
would be inconsistent with this Agreement. |
IN
WITNESS WHEREOF, and intending to be legally bound hereby, Holder has executed
this Agreement as of the day and year first above written.
Dated:
April ___, 2005
HOLDER: | |
(Signature
of Holder) | |
(Print
Name of Holder) | |
Number
of Shares of Common Stock | |
Beneficially
Owned |
191
COMPANY: | ||
ENERGY
& ENGINE TECHNOLOGY CORPORATION | ||
By: |
192