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).
X. Xxxxxx 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.
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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.
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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.
0000 Xxxxx Xx. XX
Xxxxxxxxxxx, XX 00000
cc: M. Xxxx Xxxxxxxx & Associates
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
TO: UC Riverside Foundation
000 Xxxxxxxxxx Xxxx
University of California, Riverside
Xxxxxxxxx, XX 00000
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TO: Chancellor Xxxxxxx Xxxxxx
4148 Hinderaker Hall
University of California, Riverside
Xxxxxxxxx, XX 00000
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/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
UC Riverside Foundation and UC Regents
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx, Chancellor
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