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                                                                    Exhibit 10.9

                               SECOND AMENDMENT TO
                               -------------------

                       ADVANCED ENGINE TECHNOLOGIES, INC.
                       ----------------------------------

                            2000 STOCK INCENTIVE PLAN
                            -------------------------

     Pursuant to the resolutions adopted by the Board of Directors of Advanced
Engine Technologies, Inc. at a meeting of the Board of Directors held on October
12, 2001, the Advanced Engine Technologies, Inc. 2000 Stock Incentive Plan is
amended as follows:

     1.   Section 2 is amended to add the following definition:

          ""Family Member" means any child, stepchild, grandchild, parent,
     stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
     mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
     or sister-in-law, including adoptive relationships, any person sharing the
     Optionee's household (other than a tenant or employee), a trust in which
     these persons (or the Optionee) control the management of assets, and any
     other entity in which these persons (or the Optionee) own more than fifty
     percent of the voting interests."

     2.   Section 10(a) is amended and restated in its entirety to read as
          follows:

          "(a) An Option may not be sold, pledged, assigned, hypothecated,
     transferred, or disposed of in any manner other than by will or by the laws
     of descent or distribution and may be exercised, during the lifetime of the
     Optionee, only by the Optionee. Notwithstanding the foregoing, to the
     extent that the Administrator so authorizes at the time an Option is
     granted or amended, (i) such Option may be assigned pursuant to a qualified
     domestic relations order as defined by the Code, and exercised by the
     spouse of the Optionee who obtained such Option pursuant to such qualified
     domestic relations order, and (ii) such Option may be assigned, in whole or
     in part, during the Optionee's lifetime to one or more Family Members of
     the Optionee. Rights under the assigned portion may be exercised by the
     Family Member(s) who acquire a proprietary interest in such Option pursuant
     to the assignment. The terms applicable to the assigned portion shall be
     the same as those in effect for the Option immediately before such
     assignment and shall be set forth in such documents issued to the assignee
     as the Administrator deems appropriate."

     This Second Amendment to the 2000 Stock Incentive Plan of Advanced Engine
Technologies, Inc. is made and shall be effective as of April 27, 2001.

                                      -48-<PAGE>

                                                                   Exhibit 10.10

                           MEMORANDUM OF UNDERSTANDING

                            CHARITABLE GIFT AGREEMENT

     This Charitable Gift Agreement ("Agreement") is made as of June 7, 1999
between Advanced Engine Technologies, Inc. ("AET"), UC Riverside Foundation
("Foundation") and the Regents of the University of California ("UC") with
reference to the following facts:

     A.   The Foundation and UC are operated for educational purposes and are
          organizations described in Section 501(c)(3) of the Internal Revenue
          Code ("Code"); the Foundation and UC are not private foundations as
          described under IRS Code Section 509(a).

     B.   Bourns College of Engineering has established the College of
          Engineering Center for Environmental Research and Technology
          ("CE-CERT") as a division of the College which is supported by the
          University of California, Riverside ("UCR") and by contract and grants
          awarded from various external funding agencies. From the establishment
          of its initial endowment, CE-CERT's funding has increased and will
          continue to increase as a result of gifts from additional private
          sources and contracts and grants from funding entitles and agencies.

     C.   AET wishes to make a substantial gift to the Foundation for the
          purpose of creating an endowment which will provide financial
          resources to CE-CERT at the UC Riverside campus for collaborative
          research on the development of advanced engine technologies for future
          applications. Furthermore, AET wishes to have the gift used to help
          match the Challenge Grant established by Ford Motor Company as well as
          to encourage other private funding sources to support CE-CERT.

     D.   The Foundation and UC wish to accept the gift from AET on the terms
          and conditions set forth in this Agreement.

     THEREFORE, AET, the Foundation, and UC agree as follows:

     1.   The above facts, to wit: A., B., C., D., are hereby incorporated by
          this reference as though set forth in full at this point.

     2.   AET pledges to give to the Foundation marketable securities in the
          agreement amount of 1,000,000 shares of common stock of the company
          restricted under Rule 144 ("Gift Funds"), currently publicly traded at
          $7 1/4 a share on June 4, 1999. The Gift Funds will be donated to the
          Foundation as follows:

          a.   One fifth of the agreement amount, a total of 200,000 shares of
               stock, on June 8, 1999.

          b.   The remaining marketable securities to be donated in four annual
               installments of not less than 200,000 each, commencing on June 7,
               2000, in marketable securities having a fair market value on the
               dates of the gifts.

                                      -49-

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     3.   The Gift Funds shall be used to establish an endowed fund managed by
          the Foundation. When the fair market value of the funds donated
          reaches $1,000,000, the following conditions will apply:

          a.   The income from the endowed fund which shall be made available to
               UCR for the benefit and support of CE-CERT, including but not
               limited to, the following uses and purposes, pending approval by
               appropriate University officials:

               1)   To designate Advanced Engine Technologies as "Sustaining
                    Benefactor" in a prominent location in the temporary
                    facility and letter in any permanent facility. Such
                    recognition shall be prominently displayed within the
                    CE-CERT facility and such recognition will continue to be
                    used in perpetuity irrespective of the location of CE-CERT.
                    Publicity and publications listing supporters of CE-CERT
                    will refer to the name set forth in this paragraph in
                    perpetuity.

          b.   When the fair market value of the funds donated reaches
               $2,000,000, the following conditions will apply:

               1)   To establish an endowed chair in engineering at a level
                    determined by UCR. The Chair will be named in perpetuity
                    "Advanced Engine Technologies Chair in Engineering."

          c.   When the fair market value of the funds donated reaches
               $3,500,000, the following conditions will apply:

               1)   To establish an endowed scholarship in engineering at a
                    level determined by UCR. The scholarship will be named in
                    perpetuity "Advanced Engine Technologies Scholarship."

               2)   To establish an endowed graduate fellowship in engineering
                    at a level determined by UCR. The fellowship will be named
                    in perpetuity "Advanced Engine Technologies Fellowship."

          d.   When the fair market value of the funds donated reaches
               $4,000,000, the following conditions will apply:

               1)   To establish an endowed postdoctoral fellowship in
                    engineering at a level determined by UCR. The Chair will be
                    named in perpetuity "Advanced Engine Technologies
                    Postdoctoral Fellowship."

          e.   When the fair market value of the funds donated reaches
               $5,000,000 or more, the following conditions will apply:

               1)   To name a physical area in the temporary facility and in any
                    permanent facility in perpetuity "Advanced Engine
                    Technologies Engine Research Laboratory." Such name shall be
                    prominently displayed within the CE-CERT facility and such
                    name will continue to be used in perpetuity irrespective of
                    the location of CE-CERT. All publicity will refer to the
                    laboratory by the name set forth in this paragraph in
                    perpetuity.

                                      -50-

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     4.   The Foundation and UC each represents and warrants respectively as
          follows:

          a.   That it is a non-profit organizations duly organized, validly
               existing, and in good standing under and pursuant to the laws of
               the State of California.

          b.   That it is exempt from taxation under Section 501(e)(3) of the
               Code, and that it is not private foundations under Section 509(a)
               of the Code. UC is exempt as a State institution and under
               Section 501(e)(3).

          c.   Until all of the marketable securities are paid to the
               Foundation, the Foundation or UC respectively agree to inform
               Advanced Engine Technologies immediately of material alterations
               in the Foundation's or the UC's organization, structure or
               activities, or of any change, either anticipated or actual, which
               may adversely affect its income tax exempt status as represented
               in this Agreement.

          d.   Until all of the marketable securities are paid to the
               Foundation, Advanced Engine Technologies agrees to inform the
               Foundation immediately of material alterations in the company's
               organization or of any change, either anticipated or actual,
               which may adversely affect its status as a publicly traded
               company with marketable securities as represented in this
               Agreement.

     5.   We understand that an administrative fee shall be assessed in
          accordance with UCR policy on administrative fees. We further
          understand that the principal of the Fund may be combined with other
          funds for investment purposes.

     6.   If, in the judgment of the Chancellor, the designated use of
          expendable Fund distribution is impossible, then the Chancellor may
          use the Fund distribution of further the objectives and purposes of
          UCR, as he/she determines to be consistent with Advanced Engine
          Technologies interests and intentions.

     7.   This Agreement shall be binding on, and shall inure to the benefit of,
          Advanced Engine Technologies, the Foundation, UC and their respective
          successors in interest.

     8.   All notices, request, demands and other communications under this
          Agreement shall be in writing and shall e addressed as follows.

     TO:  Advanced Engine Technologies, Inc.
          9909 Osuna Rd. NE
          Albuquerque, NM  87111

          cc:  M. Neil Cummings & Associates
               1800 Avenue of the Stars, Suite 1000
               Los Angeles, CA 90067

     TO:  UC Riverside Foundation
          257 Highlander Hall
          University of California, Riverside
          Riverside, CA 92521

                                      -51-

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     TO:  Chancellor Raymond Orbach
          4148 Hinderaker Hall
          University of California, Riverside
          Riverside, CA  92521

     Any or party or representative may change his, her, or its address for
purposes of this paragraph by giving the other parties and representatives
written notice of the new address in the manner set forth above.

     9.   This Agreement shall be construed in accordance with, and governed by,
          the laws of the State of California as applied to contracts that are
          executed and performed in California.

     The  parties of this Agreement have duly executed it as of the day and year
first above written.

          Advanced Engine Technologies, Inc.

     By: /s/ Murray J. Bailey
        --------------------------------------------------
             Murray J. Bailey

             UC Riverside Foundation and UC Regents

     By: /s/ Raymond L. Orbach
        -----------------------------------------
             Raymond L. Orbach, Chancellor

                                      -52-

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