Document:

Energy and Engine Technology Corporation Exhibit 10 Lim Stand Agr Smyth

EXHIBIT
H-2

(Smyth)

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.

	 	 	
      b.
	
      Holder
      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.

193

	 	 	
      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 limited
      liability company which is the general partner of a partnership or limited
      liability company of which the Holder is a general partner or manager, as
      the case may be, 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.
      
	
      Bankruptcy
      Standstill.
      So
      long as any of the notes or warrants referenced in paragraph 1.b. are
      outstanding, Holder agrees that he will not initiate or cause to be
      initiated on its behalf proceedings for the appointment of a trustee or
      receiver or file an involuntary action against the Company under Chapter 7
      or 11 of Title 11 of the United States Code declare a default against the
      Company or otherwise commence or caused to be commenced any collection
      proceedings against the Company or enforce or cause enforcement of any of
      his rights against the Company except pursuant to a certain Security
      Agreement and Collateral Agent Agreement entered into at or about the date
      hereof. Holder also agrees to not collect from the Company payments in
      excess of the prior monthly agreed to payments under any previously
      existing agreements with the Company.

	 	
      4.
	
      Acknowledgements.
      Holder
      acknowledges that his rights are limited to those granted under this
      Agreement and under the Security Agreement and he is not entitled to any
      other benefit under the transactions contemplated hereby and thereby. He
      also acknowledges that he has not been represented by Grushko &Mittman
      in an attorney/client capacity and that the only relationship between the
      two is with respect to Grushko & Mittman’s role as Collateral Agent
      with respect to the transactions contemplated
hereby.

	 	
      5.
      
	
      Limited
      Antidilution.
      Holder acknowledges that despite any previously existing agreements to the
      contrary with the Company his antidilution rights with regard to Company
      stock is limited as follows: 

	 	 	
      a.
	
      Antidilution
      rights shall only be granted with respect to issuances of Common Stock
      (whether by new issuances, conversion from debt instruments or exercise of
      warrants or options) for consideration less than $.10 per share, subject
      to equitable adjustment for stock splits and the like (“Antidilution
      Transactions”).

	 	 	
      b.
	
      With
      respect to Antidilution Transactions, Holder shall receive a number of
      shares so that his percentage of shares relative to such transaction
      (inclusive of his shares) is 10%. For example, if an investor were to
      receive 1000 shares, Holder would be entitled to receive 110 shares, as
      110 shares to 1110 (1000+110) shares, is 10%. In order to simplify, all
      new issuances which are Antidilution Transactions shall be multiplied by
      11% to obtain the number of shares due Holder. Any shares received by
      Holder as a result of Anti-dilution Transactions shall be subject to the
      restrictions described herein.

194

	 	
      6.
	
      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)

	 	 
	 	
      KEVIN
      W. SMYTH

	 	 
	 	
      (Print
      Name of Holder)

	 	 
	 	 
	 	
      Number
      of Shares of Common Stock

	 	
      Beneficially
      Owned

	 	 
	 	
      [DESCRIBE
      CONVERTIBLE INSTRUMENTS]

	 	 
	 	
      COMPANY:

	 	 
	 	
      ENERGY
      & ENGINE TECHNOLOGY CORPORATION

	 	 
	 	 
	 	
      By:
	 

 

 

195Energy and Engine Technology Corporation Exhibit 10 Sec Con Note

THIS
NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ENERGY & ENGINE TECHNOLOGY CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.

SECURED
CONVERTIBLE NOTE

FOR VALUE
RECEIVED, ENERGY & ENGINE TECHNOLOGY CORPORATION, a Nevada corporation
(hereinafter called "Borrower"), hereby promises to pay to LONGVIEW
FUND, LP, 600 Montgomery Street, 44th Floor, San Francisco, CA 94111, Fax: (415)
981-5300 (the
"Holder") or order, without demand, the sum of
__________________________________________ Dollars ($__________), with simple
interest accruing on April _____, 2007 (the "Maturity Date"), if not paid
sooner.

This Note
has been entered into pursuant to the terms of a subscription agreement between
the Borrower and the Holder, dated of even date herewith (the “Subscription
Agreement”), and shall be governed by the terms of such Subscription Agreement.
Unless otherwise separately defined herein, all capitalized terms used in this
Note shall have the same meaning as is set forth in the Subscription Agreement.
The following terms shall apply to this Note:

ARTICLE
I

GENERAL
PROVISIONS

	 	
      1.1
	
      Payment
      Grace Period.
      The Borrower shall have a ten (10) business day grace period to pay any
      monetary amounts due under this Note, after which grace period a default
      interest rate of fifteen percent (15%) per annum shall apply to the
      amounts owed hereunder.

	 	
      1.2
	
      Conversion
      Privileges.
      The Conversion Privileges set forth in Article II shall remain in full
      force and effect immediately from the date hereof and until the Note is
      paid in full regardless of the occurrence of an Event of Default. The Note
      shall be payable in full on the Maturity Date, unless previously converted
      into Common Stock in accordance with Article II hereof; provided, that if
      an Event of Default has occurred, the Borrower may not pay this Note,
      without the consent of the Holder, until one year after the later of the
      date the Event of Default has been cured or one year after the Maturity
      Date.

	 	
      1.3
	
      Interest
      Rate.
      Subject
      to Section 5.7 hereof, interest payable on this Note shall accrue at a
      rate per annum (the "Interest Rate") equal to the "prime rate" published
      in The Wall Street Journal from time to time, plus four percent (4%). The
      interest rate shall be increased or decreased as the case may be for each
      increase or decrease in the prime rate in an amount equal to such increase
      or decrease in the prime rate; each change to be effective as of the day
      of the change in such rate. The Interest Rate shall not be less than eight
      percent (8%) per annum. Interest on the Principal Amount shall be payable
      on October 1, 2005 and semi-annually thereafter and on the Maturity Date,
      whether by acceleration or otherwise. Interest shall compound
      annually.

196

ARTICLE
II

CONVERSION
RIGHTS

The
Holder shall have the right to convert the principal due under this Note into
Shares of the Borrower's Common Stock, $.001 par value per share (“Common
Stock”) as set forth below.

	 	
      2.1.
	
      Conversion
      into the Borrower's Common Stock.

	 	 	
      (a)
	
      The
      Holder shall have the right from and after the date of the issuance of
      this Note and then at any time until this Note is fully paid, to convert
      any outstanding and unpaid principal portion of this Note, and accrued
      interest, at the election of the Holder (the date of giving of such notice
      of conversion being a "Conversion Date") into fully paid and nonassessable
      shares of Common Stock as such stock exists on the date of issuance of
      this Note, or any shares of capital stock of Borrower into which such
      Common Stock shall hereafter be changed or reclassified, at the conversion
      price as defined in Section 2.1(b) hereof (the "Conversion Price"),
      determined as provided herein. Upon delivery to the Borrower of a
      completed Notice of Conversion, a form of which is annexed hereto,
      Borrower shall issue and deliver to the Holder within three (3) business
      days from the Conversion Date (such third day being the “Delivery Date”)
      that number of shares of Common Stock for the portion of the Note
      converted in accordance with the foregoing. At the election of the Holder,
      the Borrower will deliver accrued but unpaid interest on the Note in the
      manner provided in Section 1.3 through the Conversion Date directly to the
      Holder on or before the Delivery Date (as defined in the Subscription
      Agreement). The number of shares of Common Stock to be issued upon each
      conversion of this Note shall be determined by dividing that portion of
      the principal of the Note and interest to be converted, by the Conversion
      Price.

	 	 	
      b.
	
      Subject
      to adjustment as provided in Section 2.1(c) hereof, the Conversion Price
      per share shall be the lesser of (i) $0.12, or (ii) seventy percent (70%)
      of the average of the five lowest closing bid prices of the Common Stock
      as reported by Bloomberg L.P. for the Principal Market for the twenty
      trading days preceding a Conversion Date. Until the later of two hundred
      and seventy (270) days after the issue date of this Note, or until the
      closing bid price of the Common Stock as reported by Bloomberg L.P. for
      the Principal Market is less than $0.06, the minimum Conversion Price
      shall be $0.05.

	 	 	
      (c)
	
      The
      Conversion Price and number and kind of shares or other securities to be
      issued upon conversion determined pursuant to Section 2.1(a), shall be
      subject to adjustment from time to time upon the happening of certain
      events while this conversion right remains outstanding, as
      follows:

197

	 	 	 	
      A.
	
      Merger,
      Sale of Assets, etc. If the Borrower at any time shall consolidate with or
      merge into or sell or convey all or substantially all its assets to any
      other corporation, this Note, as to the unpaid principal portion thereof
      and accrued interest thereon, shall thereafter be deemed to evidence the
      right to purchase such number and kind of shares or other securities and
      property as would have been issuable or distributable on account of such
      consolidation, merger, sale or conveyance, upon or with respect to the
      securities subject to the conversion or purchase right immediately prior
      to such consolidation, merger, sale or conveyance. The foregoing provision
      shall similarly apply to successive transactions of a similar nature by
      any such successor or purchaser. Without limiting the generality of the
      foregoing, the anti-dilution provisions of this Section shall apply to
      such securities of such successor or purchaser after any such
      consolidation, merger, sale or conveyance.

	 	 	 	
      B.
	
      Reclassification,
      etc. If the Borrower at any time shall, by reclassification or otherwise,
      change the Common Stock into the same or a different number of securities
      of any class or classes that may be issued or outstanding, this Note, as
      to the unpaid principal portion thereof and accrued interest thereon,
      shall thereafter be deemed to evidence the right to purchase an adjusted
      number of such securities and kind of securities as would have been
      issuable as the result of such change with respect to the Common Stock
      immediately prior to such reclassification or other
  change.

	 	 	 	
      C.

       
	
      Stock
      Splits, Combinations and Dividends. If the shares of Common Stock are
      subdivided or combined into a greater or smaller number of shares of
      Common Stock, or if a dividend is paid on the Common Stock in shares of
      Common Stock, the Conversion Price shall be proportionately reduced in
      case of subdivision of shares or stock dividend or proportionately
      increased in the case of combination of shares, in each such case by the
      ratio which the total number of shares of Common Stock outstanding
      immediately after such event bears to the total number of shares of Common
      Stock outstanding immediately prior to such event..

       

	 	 	 	
      D.
	
      Share
      Issuance. So long as this Note is outstanding, if the Borrower shall issue
      or agree to issue any shares of Common Stock except for the Excepted
      Issuances (as defined in the Subscription Agreement) for a consideration
      less than the Conversion Price in effect at the time of such issue, then,
      and thereafter successively upon each such issue, the Conversion Price
      shall be reduced to such other lower issue price. For purposes of this
      adjustment, the issuance of any security carrying the right to convert
      such security into shares of Common Stock or of any warrant, right or
      option to purchase Common Stock shall result in an adjustment to the
      Conversion Price upon the issuance of the above-described security and
      again upon the issuance of shares of Common Stock upon exercise of such
      conversion or purchase rights if such issuance is at a price lower than
      the then applicable Maximum Base Price. The reduction of the Conversion
      Price described in this paragraph is in addition to other rights of the
      Holder described in this Note and the Subscription
    Agreement.

198

	 	 	
      (d)
	
      Whenever
      the Conversion Price is adjusted pursuant to Section 2.1(c) above, the
      Borrower shall promptly mail to the Holder a notice setting forth the
      Conversion Price after such adjustment and setting forth a statement of
      the facts requiring such adjustment.

	 	 	
      (e)
	
      During
      the period the conversion right exists, Borrower will reserve from its
      authorized and unissued Common Stock not less than 175% of the number of
      shares of Common Stock issuable upon the full conversion of this Note.
      Borrower represents that upon issuance, such shares will be duly and
      validly issued, fully paid and non-assessable. Borrower agrees that its
      issuance of this Note shall constitute full authority to its officers,
      agents, and transfer agents who are charged with the duty of executing and
      issuing stock certificates to execute and issue the necessary certificates
      for shares of Common Stock upon the conversion of this
    Note.

	 	
      2.2
	
      Method
      of Conversion.
      This Note may be converted by the Holder in whole or in part as described
      in Section 2.1(a) hereof and the Subscription Agreement. Upon partial
      conversion of this Note, a new Note containing the same date and
      provisions of this Note shall, at the request of the Holder, be issued by
      the Borrower to the Holder for the principal balance of this Note and
      interest which shall not have been converted or
paid.

 

	 	
      2.3
	
      Maximum
      Conversion.
      The Holder shall not be entitled to convert on a Conversion Date that
      amount of the Note in connection with that number of shares of Common
      Stock which would be in excess of the sum of (i) the number of shares of
      Common Stock beneficially owned by the Holder and its affiliates on a
      Conversion Date, (ii) any Common Stock issuable in connection with the
      unconverted portion of the Note, and (iii) the number of shares of Common
      Stock issuable upon the conversion of the Note with respect to which the
      determination of this provision is being made on a Conversion Date, which
      would result in beneficial ownership by the Holder and its affiliates of
      more than 4.99% of the outstanding shares of Common Stock of the Borrower
      on such Conversion Date. For the purposes of the provision to the
      immediately preceding sentence, beneficial ownership shall be determined
      in accordance with Section 13(d) of the Securities Exchange Act of 1934,
      as amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the
      Holder shall not be limited to aggregate conversions of only 4.99% and
      aggregate conversion by the Holder may exceed 4.99%. The Holder shall have
      the authority and obligation to determine whether the restriction
      contained in this Section 2.3 will limit any conversion hereunder and to
      the extent that the Holder determines that the limitation contained in
      this Section applies, the determination of which portion of the Notes are
      convertible shall be the responsibility and obligation of the Holder. The
      Holder may waive the conversion limitation described in this Section 2.3,
      in whole or in part, upon and effective after 61 days prior written notice
      to the Borrower. The Holder may allocate which of the equity of the
      Borrower deemed beneficially owned by the Holder shall be included in the
      4.99% amount described above and which shall be allocated to the excess
      above 4.99%.

 

199

ARTICLE
III

 

EVENT
OF DEFAULT

The
occurrence of any of the following events of default ("Event of Default") shall,
at the option of the Holder hereof, make all sums of principal and interest then
remaining unpaid hereon and all other amounts payable hereunder immediately due
and payable, upon demand, without presentment, or grace period, all of which
hereby are expressly waived, except as set forth below:

	 	
      3.1
	
      Failure
      to Pay Principal or Interest.
      The Borrower fails to pay any installment of principal, interest or other
      sum due under this Note when due and such failure continues for a period
      of ten (10) business days after the due date. The ten (10) day period
      described in this Section 3.1 is the same ten (10) business day period
      described in Section 1.1 hereof.

	 	
      3.2
	
      Breach
      of Covenant.
      The Borrower breaches any material covenant or other term or condition of
      the Subscription Agreement or this Note in any material respect and such
      breach, if subject to cure, continues for a period of ten (10) business
      days after written notice to the Borrower from the
  Holder.

	 	
      3.3
	
      Breach
      of Representations and Warranties.
      Any material representation or warranty of the Borrower made herein, in
      the Subscription Agreement, or in any agreement, statement or certificate
      given in writing pursuant hereto or in connection therewith shall be false
      or misleading in any material respect as of the date made and the Closing
      Date.

	 	
      3.4
	
      Receiver
      or Trustee.
      The Borrower shall make an assignment for the benefit of creditors, or
      apply for or consent to the appointment of a receiver or trustee for it or
      for a substantial part of its property or business; or such a receiver or
      trustee shall otherwise be appointed without the consent of the Borrower
      is not dismissed within sixty (60) days of
appointment.

	 	
      3.5
	
      Judgments.
      Any money judgment, writ or similar final process shall be entered or
      filed against Borrower or any of its property or other assets for more
      than $75,000, and shall remain unvacated, unbonded or unstayed for a
      period of forty-five (45) days.

	 	
      3.6
	
      Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law, or the issuance
      of any notice in relation to such event, for the relief of debtors shall
      be instituted by or against the Borrower and if instituted against
      Borrower are not dismissed within sixty (60) days of
      initiation.

	 	
      3.7
	
      Delisting.
      Delisting of the Common Stock from the OTC Bulletin Board (“Bulletin
      Board”) or Principal Market; failure to comply with the requirements for
      continued listing on the Bulletin Board for a period of five consecutive
      trading days; or notification from the Bulletin Board or any Principal
      Market that the Borrower is not in compliance with the conditions for such
      continued listing on the Bulletin Board or other Principal
      Market.

	 	
      3.8
	
      Non-Payment. A
      default by the Borrower under any one or more obligations in an aggregate
      monetary amount in excess of $100,000 for more than twenty days after the
      due date, unless the Borrower is contesting the validity of such
      obligation in good faith.

200

	 	
      3.9
	
      Stop
      Trade.
      An SEC or judicial stop trade order or Principal Market trading suspension
      that lasts for five or more consecutive trading
days.

	 	
      3.10
	
      Failure
      to Deliver Common Stock or Replacement Note.
      Borrower's failure to timely deliver Common Stock to the Holder pursuant
      to and in the form required by this Note and Sections 7 and 11 of the
      Subscription Agreement, or, if required, a replacement
    Note.

	 	
      3.11
	
      Non-Registration
      Event.
      The occurrence of a Non-Registration Event as described in Section 11.4 of
      the Subscription Agreement.

	 	
      3.12
	
      Reservation
      Default.
      Failure by the Borrower to have reserved for issuance upon conversion of
      the Note the amount of Common stock as set forth in this Note and the
      Subscription Agreement.

	 	
      3.13
	
      Cross
      Default. A
      default by the Borrower of a material term, covenant, warranty or
      undertaking of any other agreement to which the Borrower and Holder are
      parties, or the occurrence of a material event of default under any such
      other agreement which is not cured after any required notice and/or cure
      period.

ARTICLE
IV

SECURITY
INTEREST

	 	
      4.
	
      Security
      Interest/Waiver of Automatic Stay.
      This Note is secured by a security interest granted to the Collateral
      Agent for the benefit of the Holder pursuant to a Security Agreement, as
      delivered by Borrower to Holder. The Borrower acknowledges and agrees that
      should a proceeding under any bankruptcy or insolvency law be commenced by
      or against the Borrower, or if any of the Collateral (as defined in the
      Security Agreement) should become the subject of any bankruptcy or
      insolvency proceeding, then the Holder should be entitled to, among other
      relief to which the Holder may be entitled under the Transaction Documents
      and any other agreement to which the Borrower and Holder are parties
      (collectively, "Loan Documents") and/or applicable law, an order from the
      court granting immediate relief from the automatic stay pursuant to 11
      U.S.C. Section 362 to permit the Holder to exercise all of its rights and
      remedies pursuant to the Loan Documents and/or applicable law. THE
      BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11
      U.S.C. SECTION 362. FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND
      AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE
      BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
      11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT
      IN ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND
      REMEDIES UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The Borrower
      hereby consents to any motion for relief from stay that may be filed by
      the Holder in any bankruptcy or insolvency proceeding initiated by or
      against the Borrower and, further, agrees not to file any opposition to
      any motion for relief from stay filed by the Holder. The Borrower
      represents, acknowledges and agrees that this provision is a specific and
      material aspect of the Loan Documents, and that the Holder would not agree
      to the terms of the Loan Documents if this waiver were not a part of this
      Note. The Borrower further represents, acknowledges and agrees that this
      waiver is knowingly, intelligently and voluntarily made, that neither the
      Holder nor any person acting on behalf of the Holder has made any
      representations to induce this waiver, that the Borrower has been
      represented (or has had the opportunity to he represented) in the signing
      of this Note and the Loan Documents and in the making of this waiver by
      independent legal counsel selected by the Borrower and that the Borrower
      has discussed this waiver with counsel.

201

ARTICLE
V

 

MISCELLANEOUS

	 	
      5.1
	
      Failure
      or Indulgence Not Waiver.
      No failure or delay on the part of Holder hereof in the exercise of any
      power, right or privilege hereunder shall operate as a waiver thereof, nor
      shall any single or partial exercise of any such power, right or privilege
      preclude other or further exercise thereof or of any other right, power or
      privilege. All rights and remedies existing hereunder are cumulative to,
      and not exclusive of, any rights or remedies otherwise
      available.

	 	
      5.2
	
      Notices.
      All notices, demands, requests, consents, approvals, and other
      communications required or permitted hereunder shall be in writing and,
      unless otherwise specified herein, shall be (i) personally served, (ii)
      deposited in the mail, registered or certified, return receipt requested,
      postage prepaid, (iii) delivered by reputable air courier service with
      charges prepaid, or (iv) transmitted by hand delivery, telegram, or
      facsimile, addressed as set forth below or to such other address as such
      party shall have specified most recently by written notice. Any notice or
      other communication required or permitted to be given hereunder shall be
      deemed effective (a) upon hand delivery or delivery by facsimile, with
      accurate confirmation generated by the transmitting facsimile machine, at
      the address or number designated below (if delivered on a business day
      during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be
      received) or (b) on the second business day following the date of mailing
      by express courier service, fully prepaid, addressed to such address, or
      upon actual receipt of such mailing, whichever shall first occur. The
      addresses for such communications shall be: (i) if to the Borrower to:
      Energy
      & Engine Technology Corporation, 5308 West Plano Parkway, Plano, TX
      75093, Attn: Jolie G. Kahn, Esq., telecopier number: (972)
      732-6440,
      and (ii) if to the Holder, to the name, address and telecopy number set
      forth on the front page of this Note, with a copy by telecopier only to
      Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New
      York 10176, telecopier number: (212)
697-3575.

	 	
      5.3
	
      Amendment
      Provision.
      The term "Note" and all reference thereto, as used throughout this
      instrument, shall mean this instrument as originally executed, or if later
      amended or supplemented, then as so amended or
    supplemented.

	 	
      5.4
	
      Assignability.
      This Note shall be binding upon the Borrower and its successors and
      assigns, and shall inure to the benefit of the Holder and its successors
      and assigns.

	 	
      5.5
	
      Cost
      of Collection.
      If default is made in the payment of this Note, Borrower shall pay the
      Holder hereof reasonable costs of collection, including reasonable
      attorneys' fees.

	 	
      5.6
	
      Governing
      Law.
      This Note shall be governed by and construed in accordance with the laws
      of the State of New York. Any action brought by either party against the
      other concerning the transactions contemplated by this Agreement shall be
      brought only in the civil or state courts of New York or in the federal
      courts located in the State and county of New York. Both parties and the
      individual signing this Agreement on behalf of the Borrower agree to
      submit to the jurisdiction of such courts. The prevailing party shall be
      entitled to recover from the other party its reasonable attorney's fees
      and costs.

202

	 	
      5.7
	
      Maximum
      Payments.
      Nothing contained herein shall be deemed to establish or require the
      payment of a rate of interest or other charges in excess of the maximum
      permitted by applicable law. In the event that the rate of interest
      required to be paid or other charges hereunder exceed the maximum
      permitted by such law, any payments in excess of such maximum shall be
      credited against amounts owed by the Borrower to the Holder and thus
      refunded to the Borrower.

	 	
      5.8
	
      Shareholder
      Status.
      The Holder shall not have rights as a shareholder of the Borrower with
      respect to unconverted portions of this Note. However, the Holder will
      have all the rights of a shareholder of the Borrower with respect to the
      shares of Common Stock to be received by Holder after delivery by the
      Holder of a Conversion Notice to the
Borrower.

203

IN
WITNESS WHEREOF,
Borrower has caused this Note to be signed in its name by an authorized officer
as of the ____ day of April, 2005.

	 	
      ENERGY
      & ENGINE TECHNOLOGY CORPORATION

	 	 
	 	 
	 	 
	 	
      By:
	 
	 	 	
      Name:

	 	 	
      Title:

WITNESS:

______________________________________

204

 

NOTICE
OF CONVERSION

(To be
executed by the Registered Holder in order to convert the Note)

The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by Energy & Engine Technology
Corporation on April ____, 2005 into Shares of Common Stock of Energy &
Engine Technology Corporation (the "Borrower") according to the conditions set
forth in such Note, as of the date written below.

	
      Date
      of Conversion:
	 
	 	 
	
      Conversion
      Price:
	 
	 	 
	
      Shares
      To Be Delivered:
	 
	 	 
	
      Signature:
	 
	 	 
	
      Print
      Name:
	 
	 	 
	
      Address:
	 
	 	 
	 	 

 

 

205

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