Engine Development and License Agreement
This
Agreement is entered into this the 18th day of July 2006 between Rotoblock
Corporation,
a Nevada Corporation with Head Office at 000 X Xxxxxx, Xxxxx Xxxx
Xxxxxxxxxx,
00000,
XXX hereinafter referred to as "Rotoblock";
and
Obvio
! Automotoveiculos S.A., a Brasilian
Corporation with the Headquarters at Xxxxxxx Sao Xxxxxxx No. 169 - Xxxxx
de
Caxias,
RJ25251-255 Rio de Janeiro and office at Xxxxxxx Xxxxxxxxx Xxxxxxxx 000, Xxxxx,
Xxx
xx
Xxxxxxx, XX 22470-220, Brasil, hereinafter referred to as "Obvio
!".
Rotoblock and
Obvio
!
are hereinafter jointly referred to as the "Parties".
R
E C I T A L :
WHEREAS
Xx.
Xxxxx Xxxxxxx, the inventor, designed and built a prototype Oscillating Piston
Engine
(hereinafter referred to as the "OPE") and was subsequently granted 5 (five)
US
Patents
for the design and for four applications of said engine. These five patents
have
been assigned
to Rotoblock Inc. Such assignment was a result of an "Amended and Restated
Option
Agreement" executed on September 15th,2003,
whereby Rotoblock Inc was granted an
option
to acquire said patents on or before May 315" 2007 for a consideration
of
US$1,500,000;
and
WHEREAS,
Rotoblock through its subsidiary Rotoblock Inc, a federally incorporated
corporation
in Canada has developed a second generation Oscillating Piston Engine,
which
features
the same basic design as the first generation engine prototype designed and
built by
Xx.
Xxxxx Xxxxxxx (deceased); and
WHEREAS,
after the engine was moved from Vancouver, Canada to the Head office of
Rotoblock,
being the parent company of Rotoblock Inc., the engine had made its
first
independent
run as evidenced on the video displayed on the Rotoblock website;
and
WHEREAS,
Obvio ! is in the process of manufacturing two revolutionary automobile models
namely
the 828 and the 012, powered by a traditional Internal Combustion Engine;
and
WHEREAS,
Obvio ! has studied the principles underlying the functioning of the OPE and
are
desirous
of incorporating the OPE technology into their ethanol hybrid models projected
for the
future. With a projected power to weight ratio of 2:1 the OPE is envisioned
to
make an ideal
light weight, low volume power source for such a hybrid application;
and
WHEREAS,
the
existing 2nd generation OPE was constructed as a test model, it is not
suitable
to be incorporated into an automotive application in its present configuration;
and
WHEREAS,
Obvio ! recognizes this fact and is prepared to invest the time and funding
necessary
to develop a smaller and more refined engine.
1
NOW,
THEREFORE, for
good
and
valuable consideration, the receipt and sufficiency of which
is
hereby acknowledged, the Parties, intending to be legally bound, further
agree
as follows:
The
Parties
agree to enter into a NON-EXCLUSIVE Joint Venture for the purpose of
developing
a 3rCJgeneration OPE suitable for hybrid applications. The contribution to
such
a
Joint
Venture by the parties shall be as follows:
Rotoblock:
To
provide
any and all available engineering data, calculations, drawings and electronic
files related
to the 2nd
generation OPE
To
be
responsible that all the patents are in good
standing
and that the maintenance fees are
being
paid in a timely manner.
To
exercise
the above mentioned option for all the patents on or before May 31st, 2007,
negotiate
an extension, or make whatever agreement is suitable for the inventor's
estate and
the
long
term objective of the Joint Venture.
To
granting a
license to Obvio ! for the OPE technology for US$5,OOO,OOO.00 (Five million
US
Dollar) payable in equal increments of US$500.00 per engine installed or
sold.
Obvio
!:
To
study the
existing OPE in detail in cooperation with Rotoblock engineers. If necessary
conduct
additional test runs gathering performance data.
To
establish
the design parameters of a new engine, including but not limited to space
requirement,
adaptability to CVTs and/or generators, horsepower and torque
requirements,
alternate
fuels such as ethanol, natural gas etc.
To
design and
construct a prototype engine at their facilities in Rio de Janeiro, Brazil
To
design and
build a prototype hybrid drive.
To
test,
modify and perfect the engine and drive train to a point where it can be mass
produced
and incorporated into the Obvio ! vehicles.
In
consideration for making the above contribution to the Joint Venture the parties
shall be entitled
to:
Rotoblock:
The
right of
first refusal to market any and all products manufactured by Obvio !
and/or
its subsidiaries employing patented aspects of the OPE technology which
are
not
used in
the production of Obvio ! automobiles. Fur further clarification: i.e.
engines
produced in quantities in excess of what is being absorbed into the Obvio
!
vehicle
production will have to be offered first to Rotoblock under the same terms
and
OEM
conditions as to third parties.
For
engines
employing OPE technology installed into Obvio ! vehicles or sold to third
parties,
a royalty in the amount of US$100.00 (one hundred US Dollars) per
engine
shall
be paid
to Rotoblock. Such royalty payments shall commence immediately after
the
consideration for the license as outlined above has been paid (10,000
increments
@
US$500,OO)
Obvio
!:
To
be able to
utilize the OPE technology at their discretion in perpetuity provided
Obvio
!
proceeds with due diligence in the development of the engine being
able
to offer
the latest
in combustion engine
technology.
The
parties
agree that Obvio ! may sub-contract development segments of the OPE engine/drive
train without prior approval by Rotoblock.
2
Notwithstanding
to
before mentioned Joint Venture the parties agree that Rotoblock shall
have
the
right to enter into business relationships with third parties for the purpose
of
furthering
the development of the OPE including but not limited to marine, automotive,
on-off road
and
aerospace applications.
Obvio
! shall
have the right to apply for additional patents in conjunction with the OPE
engine.
All such patents granted shall be exclusive intellectual property of Obvio
!
and
Rotoblock
shall have no claim against such patents whatsoever.
Obvio
! shall
proceed with the design of the subject OPE hybrid engine indicated above
parallel
with the development of the 828 and 012 production models. Obvio ! further
agrees to
allocate a minimum of 10% of its vehicle production, currently estimated at
50,000 units per
year,
to OPE equipped hybrid drives.
In
the
unforeseen event that such engine has not reached tested prototype state by
the
expiration
of 18 months from the date hereof, Rotoblock at its sole discretion, may revoke
the license
and declare this Agreement null and void and of no further cause and effect.
This
Agreement is and will be deemed to be made in California and for all purposes
will be
governed
exclusively by and construed and enforced in accordance with the domestic laws
prevailing
in California.
The
time is
of the essence in this agreement .
Agreed
and
executed in two originals.
Obvio
!
Automotoveiculos S.A . Rotoblock
Corporation
/s/
Xxxxxxx
Xxxxx Xxxxxxx /s/
Xxxxxxxx Xxxxxx
By:
Xxxxxxx
Xxxxx Machaco, President
By:
Xxxxxxxx Xxxxxx, President
July
18,
2006
July
24,
2006
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