**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 300 B Street, Santa Rosa California, 95401,
      USA hereinafter referred to as "Rotoblock"; and
      Obvio
      ! Automotoveiculos S.A., a Brasilian
      Corporation with the Headquarters at Estrada Sao Vicente No. 169 - Duque de Caxias,
      RJ25251-255 Rio de Janeiro and office at Avenida Alexandre Ferreira 391, Lagoa, Rio
      de
      Janeiro, RJ 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
      Dr.
      Monti Farrell, 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
      Dr.
      Monti Farrell (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.





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 2 nd 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 $5,000,000 (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.





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/
      Ricardo
      Silva Machado      /s/
      Matthias Heinze


By:
      Ricardo
      Silva Machaco, President     By:
      Matthias Heinze, President





July
      18,
      2006        July
      24,
      2006