Exhibit 10.4

                                    AGREEMENT

THIS AGREEMENT is made the _23_ day of May 2000.

BETWEEN:  STEVEN CHARLES MANTHEY  (hereinafter  called  "Steven") of 1 Promenade
          Offices Robina Town Centre Gold Coast Queensland Australia

AND:      ADVANCED ENGINE TECHNOLOGIES,  INC. (hereinafter call "AETI") of 11150
          W. Olympic Boulevard # 1020 Los Angeles, California United States.


WHEREAS:

A.   Steven is the inventor of a  revolutionary  engine known as the OX2 Engine.
     ("OX2 Engine");

B.   An OX2 Engine is currently at the  University  of  California  at Riverside
     being tested for and on behalf of AET and its shareholders  ("OX2 Prototype
     Engine");

C.   Steven and AETI wish to improve  and develop  the OX2  Prototype  Engine so
     that it is capable of becoming a commercial viable engine.

D.   Steven  shall  provide,  for a period  of two  years  from the date of this
     Agreement,  for the  benefit of AETI and its  shareholders,  the  following
     maintenance and development program:

         (i)   Preventive  maintenance  to ensure that the OX2 Prototype  Engine
               remains in good working order; and

         (ii)  Remedial  maintenance  to be  carried  out on the  OX2  Prototype
               Engine in order to rectify a malfunction;

E.   Steven shall deliver to AETI, for the benefit of AETI and its shareholders,
     the following products:

         (i)   A Front Port Assembly with a Direct Fuel Injection System for the
               OX2 Prototype Engine;

         (ii)  A second OX2 Prototype  Engine for testing ("OX2 Second Prototype
               Engine"); and

                                       1
<PAGE>

         (iii) A  third  OX2  Prototype  Engine  that is  adapted  to run a 25KW
               Caterpillar Generator Set ("OX2 Third Prototype Engine");

         The  aforementioned  engines are  collectively  referred to as the "OX2
Engines".

F.   Steven shall  forthwith  assign to AETI all patents or  patentable  rights,
     including developments and improvements, that have arisen or may arise as a
     result of the above mentioned  maintenance and development  program and OX2
     Engines.

G.   Steven  shall  provide  the above  mentioned  maintenance  and  development
     program and OX2 Engines to AETI without remuneration from AETI; and

H.   Steven,  AETI and Advanced Engine Technology PTY LTD, an Australian Company
     (AETPTY) are, concurrently  herewith,  entering into a Release Agreement of
     even date.

WHEREBY IT IS AGREED:

1.   This  Agreement  shall commence as from the date hereof and remain in force
     for a  period  of two  years,  or until  otherwise  terminated  under  this
     Agreement, whichever is earlier.

2.   Steven  shall  design and  manufacture  for the  benefit  of AETI,  and its
     shareholders, the following OX2 Engine products:

         (a)      A Front Port assembly with a Direct Fuel Injection  System for
                  the OX2 Prototype  Engine.  This product shall be available to
                  deliver  to AETI in no less  than 3 months  and no more than 6
                  months from the date of this Agreement.

         (b)      The OX2  Second  Prototype  Engine,  which  will be ready  for
                  adaption to the electronic control system of the OX2 Prototype
                  Engine. This OX2 Second Prototype Engine shall be available to
                  deliver  to AETI in no less than 6 months  and no more than 12
                  months from the date of this Agreement; and

         (c)      The Third OX2 Prototype Engine, is adapted to be able to run a
                  25KW  Caterpillar  Generator  Set.  This OX2  Third  Prototype
                  Engine  shall be  available to deliver to AETI in no less than
                  18 months  and no more  than 24  months  from the date of this
                  Agreement.

3.   All the costs to ship and  transport  the products  (including  all the OX2
     Engines) to and from AETI shall be paid by AETI.

                                       2
<PAGE>

4.   Steven  shall for the  duration of this  Agreement  provide  the  following
     maintenance program:

         (a)      Preventive maintenance to ensure that the OX2 Engines remains
                  in good working order; and

         (b)      Remedial maintenance to be carried out on the OX2 Engines in
                  order to rectify a malfunction.

5.   The  maintenance  and  development  program shall include the supply of any
     replacement  parts that are or have been manufactured by Steven or that are
     capable of being manufactured by Steven.

6.   The maintenance  and  development  program shall exclude the maintenance of
     the electronic control system for the OX2 Prototype Engine.

7.   AETI shall reimburse  Steven all proper out of pocket expenses  incurred by
     Steven and any other necessary  personnel in traveling to the United States
     for and on behalf of AETI (including carrying out the maintenance  program)
     including and not limited to:

         (a)      Economy class air travel;

         (b)      Accommodation (equivalent to that of Extended Stay);

         (c)      Motor Vehicle Hire (mid size automobile);

         (d)      Mobile telephone and usage charges, and

         (e)      Food and travel allowance of US$100.00 per person per day or
                  part thereof

8.       Steven may sub-contract for the performance of this Agreement or any
         part of this Agreement.

9.       Steven shall forthwith assign to AETI all patents or patentable rights,
         including developments and improvements,  that have arisen or may arise
         as a result of the above mentioned  maintenance and development program
         and OX2 Engines.

10.      Steven  shall be  entitled  to claim  authorship  of the  design of the
         products  manufactured  wholly or substantially to his designs and AETI
         shall be entitled to publish the name of Steven in connection therewith
         without his written consent.

                                       3
<PAGE>

11.      (a)      No right under this Agreement shall be deemed to be waived by
                  a party except if such waiver is in writing signed by the
                  party alleged to waive the right.

         (b)      A waiver by a party pursuant to the proceeding sub-clause will
                  not prejudice its rights in respect of any  subsequent  breach
                  of this Agreement by the other party.

         (c)      Subject to the proceeding sub-clause any failure by a party to
                  enforce  any  clause of this  Agreement,  or any  forbearance,
                  delay or indulgence  granted by a party to the other shall not
                  be construed as a waiver of the first-mentioned party's rights
                  under this Agreement.

12.      This Agreement  constitutes the entire  Agreement  between the parties.
         Any prior arrangements, agreements, representations or undertakings are
         superseded.  Any  modification  or  alteration  of any  clause  of this
         Agreement will not be valid except in writing signed by each party.

13.      This Agreement  will be governed by and construed  according to laws of
         the  State of  California,  USA.  The  parties  agree to  submit to the
         jurisdiction  of the  courts  and  tribunals  located  in the  State of
         California.

14.      The Agreement may be terminated  forthwith by AETI by notice in writing
         to Steven in the event of Steven  being unable  through  illness or any
         other  incapacity  from carrying out the terms of this  Agreement for a
         period of two months.

15.      Without  limiting the  generality of any other clause in this Agreement
         Steven may terminate  this  Agreement  immediately by notice in writing
         if:

         (a)      any payment due from AETI to Steven pursuant to this Agreement
                  remains unpaid for a period of 14 days; or

         (b)      AETI breaches any clause of this  Agreement and such breach is
                  not remedied within 7 days or written notice by Steven.

16.      (a)      Notices under this Agreement may  be  delivered  by  hand,  by
         registered  mail,  or by  facsimile  to the  addresses  of the  parties
         specified in or notified pursuant to this Agreement.

         (b)      Notice will be deemed given:

                  (i)      In the case of hand delivery or registered mail, upon
                           written  acknowledgment  of  receipt of an officer or
                           other   duly    authorized    employee,    agent   or
                           representative of the receiving party; or

                  (ii)     In the case of a facsimile, upon proof of completion
                           of transmission.

                                       4
<PAGE>

17.      Any dispute  arising in connection  with this Agreement which cannot be
         settled by  negotiation  between the  parties or their  representatives
         shall  be  submitted  to  arbitration  in the City  and  County  of Los
         Angeles, California, USA, in accordance with the commercial arbitration
         rules of JAMS-ENDISPUTE, or any other qualified arbitration association
         (located in Los Angeles,  California)  upon which the parties  mutually
         agree.

IN WITNESS the parties  hereto have duly  executed  this  Agreement  on the date
first above written.

SIGNED SEALED AND DELIVERED         )
by the said                         )
STEVEN CHARLES MANTHEY              )
In the Presence of:                 )        /s/ Steven Charles Manthey
                                           ------------------------------
                                               STEVEN CHARLES MANTHEY






THE COMMON SEAL OF ADVANCED               )
ENGINE TECHNOLOGIES, INC. was duly        )
affixed in accordance with its articles   )
of associations in the presence of:       )   /s/ Carroll Shelby
                                            ----------------------------
                                                CARROLL SHELBY
                                                DIRECTOR/PRESIDENT

/s/ Neil Cummings
-------------------------------------
NEIL CUMMINGS
COMPANY SECRETARY/TREASURER



                                       5