Document:

Exhibit 10.1

                           ASSET ACQUISITION AGREEMENT

DATE     :        March 28, 2006

BETWEEN  :        Rotary Engine, Inc., a Nevada corporation
                  3705 Shares Place, Suite 1
                  Riviera Beach, FL 33404                 "REI"

AND      :        Rotary Engine Technologies, Inc., a Nevada corporation
                  1005 Terminal Way, Suite 110
                  Reno, NV 89502-2179                     "RETI"

AND      :        Encompass Holdings, Inc., a Nevada corporation
                  1005 Terminal Way, Suite 110
                  Reno, NV 89502-2179                     "Encompass"

AND      :        Larry Cooper, Scott Webber and Shirley Harmon
                  3705 Shares Place, Suite 1
                  Riviera Beach, FL 33404                 "Cooper-Webber-Harmon"

                                    RECITALS

         A. REI owns, maintains or controls certain assets, as more particularly
described  in this  Agreement,  including,  but not  limited to,  inventory  and
intellectual property.

         B. RETI, a  second-tier  subsidiary  of  Encompass,  desires to acquire
those certain assets of REI, and REI desires to sell such assets.

         NOW,  THEREFORE,  in consideration  of the mutual  covenants  contained
herein, it is agreed as follows:

         1. ORGANIZATION OF RETI.

                  1.1  ISSUANCE  OF  CAPITAL   STOCK.   For  good  and  valuable
consideration  to be determined by its  directors,  RETI shall issue to REI such
shares of RETI  common  stock  ("RETI  Shares")  so that  Xtreme  Engines,  Inc.
("Xtreme  Engines") shall hold 51% of the issued and outstanding RETI Shares and
REI shall hold 49% of the issued and outstanding RETI Shares.

                  1.2  ELECTION OF DIRECTORS  OF  RETI/APPOINTMENT  TO ENCOMPASS
BOARD OF  DIRECTORS.  The Board of Directors  of RETI shall  consist of five (5)
members,  of which three (3) shall be selected  by Xtreme  Engines,  and two (2)
shall be selected by REI. In addition, within six (6) months of the Closing Date
of this  Agreement,  Scott Webber shall have the option to accept an appointment
to the Board of Directors of Encompass, so long as the Consulting Agreement with
RETI  referred  to in  Section 8 of this  Agreement  is still in full  force and
effect.

                  1.3 BUY-SELL RESTRICTIONS.

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                           1.3.1 SALE BY REI In the event REI wishes to accept a
bona fide offer from a third party  ("Third  Party  Offer") to  purchase  any of
their  respective  RETI Shares,  they shall deliver a notice ("Sale  Notice") to
Xtreme Engines stating the terms and conditions of the Third Party Offer,  which
Sale Notice shall  include,  without  limitation,  the name of the proposed bona
fide purchaser,  the purchase price,  the payment terms and the number of shares
proposed to be purchased.  Xtreme Engines shall have the first right to purchase
the RETI Shares  covered by the Sale Notice on the same terms and  conditions as
set forth in the Sale Notice.  Xtreme  Engines  shall have thirty (30) days from
the date of receipt  of the Sale  Notice to elect,  by written  notice to REI to
purchase the RETI Shares covered by the Sale Notice. In the event Xtreme Engines
elects not to purchase the RETI Shares covered by the Sale Notice,  REI may sell
the RETI Shares to the bona-fide  purchaser on the original terms and conditions
set forth in the Sale Notice.

                           1.3.2  SALE BY XTREME  ENGINES.  In the event  Xtreme
Engines wishes to accept a Third Party Offer to purchase any of its RETI Shares,
Xtreme  Engines  shall  deliver  a Sale  Notice  to REI in the  same  manner  as
described in Section 1.3.1 above.  REI shall have the right,  exercisable  for a
period of thirty (30) days from the date of receipt of the Sale Notice to elect,
by written  notice,  to participate in the Xtreme Engines sale on the same terms
and conditions as set forth in the Sale Notice. To the extent that REI exercises
such right of participation,  the number of RETI Shares which Xtreme Engines may
sell pursuant to such Third Party Offer shall be  correspondingly  reduced.  The
right of  participation  by REI  shall be  subject  to the  following  terms and
conditions: (a) REI may sell all or any part of that number of RETI Shares equal
to the product  obtained by multiplying (i) the aggregate  number of RETI Shares
covered by the Sale  Notice by (ii) a  fraction  the  numerator  of which is the
number of RETI Shares held by REI and the  denominator  of which is the combined
number of RETI Shares held by REI and Xtreme Engines.

         2. AGREEMENT TO SELL AND PURCHASE.  Subject to the terms and conditions
set  forth in this  Agreement,  REI  hereby  agrees  to sell and RETI  agrees to
purchase certain assets of REI, as described in Section 3 of this Agreement.

         3. ASSETS  SOLD.  The assets sold  pursuant to this  Agreement  (all of
which are collectively  referred to herein as the "Assets"),  wherever  located,
shall be those to be  described  on Schedule  3.1 at such time as the Assets are
identified  after the completion of the appraisal  referred to in Section 3.1 of
this  Agreement.  The Assets shall be listed in Schedule  3.1 without  regard to
value. The Assets shall be congregated by REI at the warehouse  facility at 3705
Share Place, Riviera, FL.

                  3.1  TRANSFER  OF ASSETS.  To the extent any of the Assets are
not   owned,   as  of  the   date   of  this   Agreement,   by  REI  ,  REI  and
Cooper-Webber-Harmon  shall, jointly or severally,  as the case may be, transfer
and assign all right,  title and interest in and to the Assets to RETI, free and
clear of all liens and  encumbrances.  Such transfer and assignment  shall occur
prior to the transfer of title referred to in Section 10.1 of this Agreement.

                  3.2  APPRAISAL  OF ASSETS.  RETI shall  undertake  to have the
Assets  appraised by an independent  appraiser as soon as practicable  after the
effective date of this Agreement. REI shall

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provide  a list to  RETI  of any  Assets  which  are  not at the  aforementioned
warehouse  facility and shall  provide  access to the Assets for purposes of the
appraisal.

                  3.3 LIENS AND ENCUMBRANCES. The Assets shall be free and clear
of all liens and encumbrances.  In the event any of the Assets are determined by
REI not to be free and clear of liens and  encumbrances,  the amount of any such
liens and  encumbrances  shall be deducted from the Purchase Price as defined in
Section 4 of this Agreement.

         4. PURCHASE PRICE. The Purchase Price ("Purchase Price") for the Assets
shall be paid by  Encompass  through  the  issuance  to REI of a  Non-Negotiable
Convertible Promissory Note to be dated April 3, 2006 in the principal amount of
$2,960,000.00,  in the form attached  hereto as Exhibit "A" and  incorporated by
reference  ("Encompass  Note").  The Encompass  Note shall be  convertible  into
common stock of Encompass ("Encompass Shares") with a market value not to exceed
$2,960,000.00  based on the closing bid price of the Encompass  Shares as quoted
on the OTC Bulletin  Board on the Closing Date, as defined in Section 10 of this
Agreement.  REI and RETI acknowledge that the Purchase Price has been determined
by multiplying  the estimated value of the Assets of  $5,800,000.00  by 51%. The
Encompass  Note shall be issued  hereunder in payment of the Purchase Price upon
the signing of this Agreement.

         5. RESTRICTIONS ON ENCOMPASS  SHARES.  REI acknowledges and agrees that
the  certificates  evidencing  any and all of the Encompass  Shares to be issued
pursuant the exercise of the  conversion  privileges of the Encompass Note shall
include a legend reading substantially as follows:

         THE SHARES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN  REGISTERED
         UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED WITHOUT
         A VIEW  TO  DISTRIBUTION  AND MAY NOT BE  OFFERED,  SOLD,  TRANSFERRED,
         PLEDGED OR  HYPOTHECATED  IN THE ABSENCE OF AN  EFFECTIVE  REGISTRATION
         STATEMENT  FOR  THE  SHARES  UNDER  THE ACT AND  UNDER  ANY  APPLICABLE
         SECURITIES LAWS, OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION
         THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER

         6. ENCOMPASS  PURCHASE OF CERTAIN OTHER ASSETS.  Encompass has acquired
previously  certain  other  equipment  from REI, as  described  in Schedule  6.1
attached  hereto and  incorporated by reference for a purchase price of $45,000.
Encompass has paid the sum of $37,850.27  against the said purchase  price.  The
balance of said purchase price of $7,149.73, less any other yet to be determined
expenses incurred by Encompass in connection with the assets referred to in this
Section 6, shall be paid by a check  issued by RETI to REI on the  Closing  Date
referred in Section 10 of this Agreement.

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         7.  OPERATING  BUDGET  FOR  RETI.Larry  Cooper and Scott  Webber  shall
prepare a proposed  operating  budget for RETI,  including the  requirements for
capital  acquisitions,  for the succeeding  twelve months,  which budget will be
subject to the approval of RETI. Upon approval of the budget,  RETI shall become
responsible for providing all operating funds described in the budget.

         8.  MANAGEMENT  OR  CONSULTING  AGREEMENTS.  Upon the execution of this
Agreement, RETI shall enter into a consulting agreement ("Consulting Agreement")
with Scott Webber and an  employment  agreement  ("Employment  Agreement")  with
Larry Cooper. Each agreement shall have the following material provisions:

                  o        The term shall be for (sixty) 60 months from the date
                           of execution,  subject to automatic  annual  renewals
                           unless  terminated  for  cause  upon 60 days  written
                           notice;
                  o        Initial annual compensation shall be $60,000;
                  o        Annual compensation shall be increased to $120,000 at
                           such time as Aqua Xtremes, Inc., the parent company
                           of RETI, shall have either (a) delivered a minimum of
                           three hundred (300) Xboards(TM) per month to
                           customers for a period of two (2) consecutive months;
                           or (b) completed production, sale and delivery of one
                           of the RETI engines; or (c) the completed sale and
                           delivery of three thousand (3,000) 407 or 814 Wankel
                           engines.

         Upon the execution of the Consulting  Agreement,  Encompass shall issue
its common stock to Scott Webber, pursuant to a currently effective registration
statement on Form S-8, in an amount equal to $100,000,  based on the closing bid
price as quoted on the OTC Bulletin  Board on the  proposed  date of issuance of
the common stock hereunder.

         9.  APPROVAL ON  MANUFACTURING  OF RETI  PRODUCTS.  So long as REI is a
shareholder of RETI, the  manufacture of any and all products to be developed by
RETI shall  require the consent and approval of REI.  However,  such consent and
approval shall be exercised in a commercially  reasonable manner consistent with
good business practices and may not be arbitrarily or unreasonably  withheld. If
any such  consent or approval  is  withheld,  REI shall  specify to the board of
directors of RETI, in writing,  the reasons for the  withholding of such consent
and approval.

         10.  CLOSING DATE AND CLOSING.  This  Agreement  shall be closed at the
offices of  Encompass  or such other  place as is  mutually  agreed  upon by the
parties hereto. The Closing Date ("Closing Date") will be the date on which this
Agreement is executed by the parties.  On the Closing Date,  the parties,  among
other things, shall do the following:

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                  10.1 TRANSFER OF TITLE.  REI shall transfer to RETI all of the
Assets  being  sold  pursuant  to this  Agreement  by Bill of Sale,  in the form
attached hereto as Exhibit "B", or other  documents of transfer,  each in a form
acceptable to RETI,  containing  warranties  of title,  free and clear of liens,
encumbrances and security interests.

                  10.2 POSSESSION. REI shall deliver possession of the Assets to
RETI.

                  10.3 DELIVERY OF CHECK.  RETI shall deliver  payment to REI of
the amount owing pursuant to Section 6 of this Agreement.

                  10.4 DELIVERY OF ENCOMPASS  NOTE.  Encompass shall deliver the
Encompass Note to REI.

                  10.5  MISCELLANEOUS.  The  parties  hereto  shall do all other
things at the Closing to consummate and effectuate  this Agreement and all other
agreements, covenants and conditions set forth herein and therein.

                  10.6 FURTHER ACTS. If, at any time after the Closing Date, any
further action by any of the Parties to this Agreement is necessary or desirable
to carry out the  purposes  of this  Agreement  and/or  to vest in RETI,  or its
designee,  full title to the Assets, such party shall take all such necessary or
desirable action to cause such action to be taken.

         11.  REPRESENTATIONS AND WARRANTIES BY REI. REI represents and warrants
to RETI as of the effective date of this Agreement and as of the Closing Date as
follows:

                  11.1 CORPORATE  EXISTENCE.  REI is now and on the Closing Date
will be a corporation,  duly organized, validly existing and good standing under
the laws of the  State of  Nevada.  REI has all  requisite  corporate  power and
authority  to own and operate the  Assets,  and to carry on its  business as now
being conducted.

                  11.2 AUTHORIZATION. The execution, delivery and performance of
this  Agreement has been duly  authorized and approved by the Board of Directors
of REI, and this Agreement  constitutes a valid and binding  agreement of REI in
accordance with its terms.

                  11.3 NO CHANGE OF CONTROL  OF REI.  At all times from the date
of this  Agreement  forward,  there shall not occur any change in control of REI
and  consequently,  the  current  ownership  of the  controlling  voting  equity
securities of REI shall continue to be held by Larry Cooper and Scott Webber.

                  11.4  CONDITION OF ASSETS.  The Assets are being  delivered in
their current condition, "as is".

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                  11.5 TITLE. REI owns absolute, clear and unencumbered title to
the  Assets,  and the  same are now free  and  clear  of all  mortgages,  liens,
pledges,  security  interests or encumbrances of any nature  whatsoever.  On the
Closing  Date,  the  same  shall  be  conveyed  to RETI  free  and  clear of all
mortgages,  liens,  pledges,  security  interests and encumbrances of any nature
whatsoever..

                  11.6 NO  APPROVAL  OR  NOTICES  REQUIRED;  NO  CONFLICTS.  The
execution,  delivery and  performance  of this  Agreement  and each of the other
agreements, exhibits and documents referred to herein or necessary to effectuate
this Agreement (collectively,  the "Documents" or individually, the "Document"),
by REI and the consummation of the transactions  contemplated  hereby or thereby
will not:

                           11.6.1  Constitute  a violation  of any  provision of
applicable law;

                           11.6.2  Require  any  consent,  approval,  permit  or
authorization of any person or governmental authority;

                           11.6.3 Result in a breach of or a default under, with
or without the giving of notice or lapse of time,  acceleration  or  termination
of, or the creation in any party of the right to accelerate,  terminate,  modify
or  cancel  any  agreement  or other  restriction,  encumbrance,  obligation  or
liability to which REI is a party or by which it is bound or to which any of the
Assets are subject;  or

                           11.6.4  LEGAL  PROCEEDINGS;   CLAIMS.  There  are  no
claims, actions, suits,  arbitrations,  proceedings or investigations pending or
threatened  against  REI,  before  or by  any  governmental  or  nongovernmental
department,  commission,  board,  bureau,  agency  or  instrumentality,  whether
federal,  state,  local or  foreign,  or any  other  person,  and  there  are no
outstanding or unsatisfied  judgments,  orders, decrees or stipulations to which
REI  is  a  party,  which  relate  to  either  the  Assets  or  the  transaction
contemplated  herein,  or which would alone or in the aggregate  have a material
adverse effect upon the Assets..

                  11.7   ACCURACY  OF   REPRESENTATIONS   AND   WARRANTIES.   No
representation or warranty made or to be made by REI in this Agreement or in any
other  Document  furnished  or to be furnished  from time to time in  connection
herewith,  contains or will contain any  misrepresentation of a material fact or
omits or will omit to state any material fact  necessary to make the  statements
herein or therein not misleading.  There is no fact known to REI or Shareholders
which  would  materially  adversely  affect,  or  which  would,  in the  future,
materially  adversely  affect,  the  business,  prospects,  assets,  property or
condition  (financial  or otherwise)  of REI's  Business  which has not been set
forth  in this  Agreement,  except  those  facts  concerning  general  economic,
legislative,  regulatory,  or other  matters  such as may  generally  impact all
businesses of the type operated by REI.

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         12.  COVENANTS.  RETI and REI each covenant and agree with the other to
perform and observe the following covenants:

                  12.1 ACCESS TO PREMISES AND  INFORMATION.  At reasonable times
before the Closing  Date,  REI will  provide RETI and its  representatives  with
reasonable access during business hours to the Assets,  titles,  contracts,  and
records of REI and furnish such additional information as RETI from time to time
may reasonably request.

                  12.2  ADVICE  OF  CLAIMS.  From  the  effective  date  of this
Agreement to and including the Closing  Date,  REI will promptly  advise RETI in
writing of the  commencement or threat of any claims,  litigation or proceedings
against or affecting REI or the Assets,  or any event that makes or is likely to
make any  representation  or warranty  untrue,  of which REI or Larry  Cooper or
Scott Webber have notice or knowledge.

                  12.3 COOPERATION.  RETI and REI will fully cooperate with each
other and with the each other's  counsel and  accountants in connection with any
steps required to be taken as part of its obligations under this Agreement. Each
will use its best  efforts  to cause  all  conditions  to this  Agreement  to be
satisfied  as promptly  as possible  and to obtain all  consents  and  approvals
necessary  for its due and punctual  performance  of this  Agreement and for the
satisfaction of the conditions hereof on its part to be satisfied.  Neither RETI
or REI shall undertake any course of action  inconsistent with this Agreement or
which would make any  representations,  warranties or  agreements  made by it in
this  Agreement  untrue or render any  conditions  precedent  to this  Agreement
unable to be satisfied at or prior to the Closing Date.

         13.  CONDITIONS  PRECEDENT TO OBLIGATIONS  OF RETI. The  obligations of
RETI to perform and observe the covenants,  agreements and conditions  hereof to
be  performed  and observed by it at or before the Closing Date shall be subject
to the satisfaction of the following  conditions,  any of which may be expressly
waived in writing by RETI:

                  13.1 ACCURACY OF  REPRESENTATIONS  AND WARRANTIES;  COMPLIANCE
WITH  COVENANTS.  The  representations  and warranties of REI contained  herein,
including all Documents, shall have been true in all material respects when made
and shall be true in all  material  respects on and as of the Closing  Date with
the same force and effect as though  made on and as of such date,  except to the
extent that such representations and warranties are made as of a specified date,
in  which  case  such  representations  and  warranties  shall be true as of the
specified  date.  REI  shall  have  performed  in  all  material   respects  all
obligations  and  agreements  and  complied in all  material  respects  with all
covenants  and  conditions  contained  in this  Agreement  to be  performed  and
complied with by it or by them at or prior to the Closing Date.

                  13.2   LEGAL   PROCEEDINGS.   No   order   of  any   court  or
administrative  agency shall be in effect which enjoins,  restrains or prohibits
consummation   of  this   Agreement,   and  no  litigation,   investigation   or
administrative  proceeding  shall be pending or  threatened  which would enjoin,
restrain or prohibit consummation of this Agreement.

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                  13.3  TITLE.   REI  shall  have  delivered  to  RETI  evidence
satisfactory to RETI establishing REI's good and marketable title to the Assets,
free and  clear of all  liens,  mortgages,  pledges,  deeds of  trust,  security
interests, conditional sales agreements, charges, encumbrances and other adverse
claims or interests of any kind.

                  13.4 LIENS AND  ENCUMBRANCES.  All  persons  holding  security
interests,  liens,  or  encumbrances  in or against any of the Assets shall have
released such liens, security interests and encumbrances.

                  13.5  APPROVALS AND CONSENTS.  All approvals and consents from
third  parties  which are necessary  for the  consummation  of the  transactions
contemplated hereby shall have been obtained.

         14.      INDEMNIFICATION AND SURVIVAL.

                  14.1  SURVIVAL  OF   REPRESENTATIONS   AND   WARRANTIES.   All
representations  and warranties made in this Agreement shall survive the Closing
Date of this Agreement.  Any party learning of a misrepresentation  or breach of
warranty  under  this  Agreement  shall as soon as  practicable  give  notice in
writing thereof to all Parties to this Agreement.

                  14.2 INDEMNIFICATION OF RETI. REI agrees to defend,  indemnify
and hold RETI, its successors and assigns harmless from and against:

                           14.2.1   Any  and  all   claims,   liabilities,   and
obligations  of any kind and  description,  contingent or  otherwise,  including
attorney's fees and expenses of litigation,  known or unknown, arising out of or
related to, but not  limited  to, any taxes,  interest  and  penalties  assessed
against the Assets.

                           14.2.2 Any and all damages,  claims,  obligations  or
deficiencies  of any kind and  description,  contingent or otherwise,  including
attorney's fees and expenses of litigation, known or unknown, resulting from any
misrepresentation, or covenant or nonfulfillment of any agreement on the part of
REI under this Agreement or under any Document.

                           14.2.3 If any claim is  asserted  against  RETI which
would give rise to a claim by RETI  against  REI for  indemnification  under the
provisions of this Section 13, RETI shall  promptly  give written  notice to REI
concerning such claim,  and REI shall, at no expense to RETI,  defend the claim,
to the point of  nonappealable  final  judgment.  If REI fails to take  steps to
defend said claim within ten (10) days of RETI providing  written notice of said
claim,  or if REI fails to sooner defend said claim when the nature of the claim
or date of service requires  immediate  defensive  action, or if REI at any time
abandons defense of such a claim,  RETI may undertake or continue the defense of
any such  claims,  with  counsel of its own  choosing,  and shall be entitled to
indemnity from REI for all costs of such defense,  including but not limited to,
reasonable  attorney's fees, court costs and incidental  expenses of litigation.
If RETI becomes entitled to payment of indemnity  pursuant to this section,  REI
shall immediately pay to RETI the amount of said indemnity claim. RETI shall not
be entitled to indemnity from REI except for the obligations to defend set forth
in this section,  unless and until RETI has actually paid a claim, debt or other
liability  giving

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rise to a right  of  indemnity  under  this  section,  or has  incurred  a legal
obligation to do so. In such event,  RETI shall be entitled to interest from REI
at the rate of twelve  (12%)  percent  per annum  from the date of said  payment
until the indemnity claim is paid.

         15. MISCELLANEOUS PROVISIONS.

                  15.1 BENEFIT.  This Agreement  shall be binding upon and inure
to the benefit of the heirs, executors,  administrators,  successors and assigns
of REI, RETI, Encompass and Cooper-Webber-Cooper.

                  15.2 NOTICES.  All notices,  requests and other communications
hereunder  ("Notices") shall be in writing and shall be deemed to have been duly
given if delivered by hand or by  facsimile to an office of the  addressee  (and
marked in prominent  lettering  "URGENT") or, if mailed,  seventy_two (72) hours
after being mailed,  postage  prepaid,  by registered or certified mail,  return
receipt requested to the applicable party(ies) at their address set forth above.
However,  if any party  shall have  designated  in the manner  provided  above a
different  address by notice to the  others,  then  notice  shall be to the last
address so designated.

                  15.3  INTERPRETATION  AND  CONSTRUCTION.  This  Agreement  was
prepared  pursuant to and shall be construed in accordance  with the laws of the
State of Nevada. The captions of the sections of this Agreement are inserted for
convenience  only,  and  shall  not be  deemed  to  constitute  a part  of  this
Agreement.  Furthermore,  any reference in this Agreement to "this Agreement" or
"Agreement" includes all of the Schedules,  Exhibits and agreements,  which have
been  attached  to this  Agreement  and  which  are all  incorporated  herein by
reference.  In construing this Agreement,  and whenever the context so requires,
the  masculine  gender  includes the  feminine and the neuter,  and the singular
number includes the plural.

                  15.4  ARBITRATION.  A dispute or claim which  arises out of or
which relates to this agreement,  or the breach or interpretation thereof, or to
the  existence,  validity,  or  scope  of  this  agreement  or  the  arbitration
agreement,  shall be resolved by arbitration  in accordance  with the procedures
specified  herein.  The party  desiring  dispute  resolution  shall send written
notice to the other  summarizing  the dispute to be arbitrated  and advising the
other party of the neutral  arbitrator it has selected.  Within fourteen days of
the receipt thereof,  the other party shall also select a neutral arbitrator and
advise the initiating party of such selection and any additional  controversies,
claims or defenses  that it wishes to include as a part of the  arbitration.  If
the other party fails or refuses to designate its arbitrator  within the initial
fourteen-day  period above provided,  upon the request of the initiating  party,
and after a five-day  notice of the request to the other  party,  the  presiding
judge of Clark County, State of Nevada shall designate such arbitrator.  The two
arbitrators thus selected shall select a third arbitrator,  but if those two are
unable within fourteen days to agree upon such third  arbitrator,  the presiding
judge of Clark  County,  State of Nevada upon the request of either  party,  and
after a five-day  notice of the request to the other  party,  shall  designate a
third arbitrator.

                  15.5 ATTORNEY'S FEES. In the event the services of an attorney
at law are necessary to enforce any of the terms of this Agreement or to resolve
any disputes arising under this Agreement, including any arbitration proceeding,
the prevailing  Party shall be entitled to recover

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its attorney's fees from the losing Party as determined in the appropriate trial
and/or appellate court, bankruptcy court or on a Petition for Review.

                  15.6 AMENDMENT.  This Agreement may not be amended orally, but
only by instrument in writing, duly executed by all parties hereto.

                  15.7 ENTIRE AGREEMENT.  This Agreement and other agreements or
Documents  referred to herein set forth the entire  understanding of the parties
hereto  with  respect to the matters  provided  herein and  supersede  all prior
agreements,   covenants,   arrangements,   communications,   representations  or
warranties,  whether  oral or written,  by any of the parties or by any officer,
employer or representative of any party.

                  15.8  NON-WAIVER.  Failure by any Party at any time to require
performance  of another Party of any of the provisions  hereof,  shall in no way
affect any Party's  rights  hereunder  to enforce  the same,  nor shall any such
waiver of any breach be held to be a waiver of any succeeding breach or a waiver
of this non-waiver clause.

                  15.9  EXPENSES.  Each of the  parties  shall  each  pay  their
respective  expenses,  including fees and expenses of legal counsel,  investment
bankers,  brokers,  accountants  or other  representatives  or  consultants,  in
connection  with  the  transactions   contemplated  hereby,   including  without
limitation, the negotiation and preparation of this Agreement and the Documents

                  15.10 PUBLIC  ANNOUNCEMENTS.  No party to this Agreement shall
issue or approve a news  release or other  public  announcement  concerning  the
transactions contemplated by this Agreement without the prior written consent of
the  others  as to the  contents  of the  announcement  and its  release,  which
approval shall not be unreasonably withheld.

                  15.11 ADVICE OF COUNSEL.  This  Agreement  was prepared by the
Law  Office of  Robert C.  Laskowski  on behalf of RETI and  Encompass.  REI and
Cooper  -Webber-Harmon  have been advised to retain  their own legal  counsel to
represent  them in connection  with this Agreement and REI and they have elected
not to seek the advice of their own legal counsel.

Page 10. Asset Acquisition Agreement
<PAGE>
                  15.12  EXECUTION  IN  COUNTERPARTS  AND  VIA  FACSIMILE.  This
Agreement may be executed in any number of  counterparts,  all of which together
shall  constitute one original.  This Agreement may be executed with  signatures
transmitted  among  the  parties  by  facsimiles,  and no party  shall  deny the
validity of their  signature  or this  Agreement  or other  Document  signed and
transmitted via facsimile.

         IN WITNESS  WHEREOF,  the parties have executed this  Agreement the day
and year first above written.

ROTARY ENGINES, INC.                        ROTARY ENGINE TECHNOLOGIES, INC.

By: /s/ SCOTT WEBBER                     By: /s/ ARTHUR N. ROBINS
   --------------------------               ---------------------------------
   Per authority of the Board            Title: Chief Executive Officer
   of Directors                                ------------------------------

ENCOMPASS HOLDINGS, INC.
By: /s/ ARTHUR N. ROBINS                 /s/ LARRY COOPER
   -----------------------------         ------------------------------------
Title: Chief Executive Officer           Larry Cooper
      --------------------------
                                         /s/ SCOTT WEBBER
                                         ------------------------------------
                                         Scott Webber

                                         /s/ SHIRLEY HARMON
                                         ------------------------------------
                                         Shirley Harmon

Page 11. Asset Acquisition Agreement
<PAGE>
                                  Schedule 3.1

      Assets Sold Pursuant to Section 3 of the Asset Acquisition Agreement

         Any and all assets,  of whatever kind and nature,  located at or in the
warehouse  facility  located at 3705 Share Place,  Riviera,  Florida,  or at any
other location maintained by, or under the control, of Rotary Engine, Inc.

<PAGE>
                                  SCHEDULE 6.1

             ASSETS PREVIOUSLY ACQUIRED BY ENCOMPASS HOLDINGS, INC.
            DESCRIBED IN SECTION 6 OF THE ASSET ACQUISITION AGREEMENT

                                  Tri-Core CNC
                               Lapper/Grinder CNC
                              Tooling for the above
                                   Stone Table
                            Rockwell Hardness Tester
                                    Dynameter
                              Miscellaneous tooling

<PAGE>
                                   EXHIBIT "A"

                                 NON-NEGOTIABLE
                           CONVERTIBLE PROMISSORY NOTE

April 3, 2006.                                                     $2,960,000.00

         FOR VALUE RECEIVED,  ENCOMPASS  HOLDINGS,  INC. , a Nevada  corporation
("Company"),  promises  to pay to the order of  ROTARY  ENGINE,  INC.,  a Nevada
corporation  ("Holder")  the  principal  sum of Two Million Nine  Hundred  Sixty
Thousand  Dollars  ($2,960,000.00)  with  interest  thereon  at the rate of nine
percent (9%) per annum from the date hereof.

         This Note is issued  pursuant to the terms and  conditions of the Asset
Acquisition Agreement dated March 28, 2006 of the Company, the Holder and others
are a party ("Acquisition Agreement").

         1. PAYMENT  TERMS.  The whole sum of  principal  and accrued but unpaid
interest is due and payable on or about April 3, 2007 ("Maturity Date").

         2.  PREPAYMENT.  This Note may be prepaid by the  Company,  in whole or
part at any time upon ten (10)  days  prior  written  notice to Holder ( "Notice
Period")  which  notice  shall  state  the  Company's  intention  to so  prepay,
including  a statement  of the amount of such  prepayment.  Any such  prepayment
shall first be applied to any accrued but unpaid interest with the balance to be
applied to  principal.  During  the  Notice  Period,  Holder  may  exercise  the
conversion privilege of this Note as described herein.

         3. CONVERSION BY HOLDER. At any time at the option of Holder and before
the Maturity Date, the principal amount and any unpaid interest may be converted
into shares of Common Stock of the Company ("Encompass  Shares").  The number of
Encompass  Shares  into  which the  principal  amount  of this Note plus  unpaid
interest  can be  converted  shall  be  known as the  "Conversion  Amount".  The
Conversion  Amount shall be  Encompass  Shares with a market value not to exceed
$2,960,000.00  based on the closing bid price of the Common Stock of the Company
as  quoted on the OTC  Bulletin  Board on the  Closing  Date as  defined  in the
Acquisition  Agreement.  Conversion  shall be accomplished by Holder  delivering
this Note marked "Cancelled" to the Company with the Notice of Conversion in the
form attached  hereto as Exhibit "A" in exchange for a Common Stock  certificate
of the Company representing the Encompass Shares.

         4. CONVERSION UPON DEMAND OF COMPANY.  Although conversion can occur at
any time at the option of the Holder, conversion must occur at the demand of the
Company upon ten (10) day's written notice at the time of any registered  public
offering by the Company in an aggregate amount of no less than  $10,000,000,  or
upon any merger or acquisition to which the Company is a party.

Page 1 - Non-Negotiable Convertible Promissory Note
<PAGE>
         5. CONDITION UPON CONVERSION.  The Encompass Shares shall not be issued
upon  conversion  of this Note  unless  such  conversion  and the  issuance  and
delivery of the Encompass Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended,  applicable state securities laws, the Securities Exchange Act of 1934,
the rules and regulations promulgated  thereunder,  and shall further be subject
to approval of counsel for the Company with respect to such  compliance.  Holder
acknowledges  and agrees that the  certificates  evidencing the Encompass Shares
will include a legend reading substantially as follows:

                  THE  SHARES  REPRESENTED  BY THIS  CERTIFICATE  HAVE  NOT BEEN
                  REGISTERED  UNDER THE  SECURITIES ACT OF 1933. THE SHARES HAVE
                  BEEN ACQUIRED  WITHOUT A VIEW TO  DISTRIBUTION  AND MAY NOT BE
                  OFFERED,  SOLD,  TRANSFERRED,  PLEDGED OR  HYPOTHECATED IN THE
                  ABSENCE OF AN EFFECTIVE  REGISTRATION STATEMENT FOR THE SHARES
                  UNDER THE ACT AND UNDER ANY APPLICABLE  SECURITIES LAWS, OR AN
                  OPINION OF COUNSEL  ACCEPTABLE  TO THE  CORPORATION  THAT SUCH
                  REGISTRATION IS NOT REQUIRED AS TO SUCH SALE OR OFFER.

         6. DEFAULT. If the Company fails to make any payment within twenty (20)
days after  payment is due,  the entire  unpaid  principal  balance  and accrued
interest shall become  immediately due, payable and collectible at the option of
the Holder.  The Company  waives  demand for payment,  presentment  for payment,
notice of  non-payment  or  dishonor.  The Company  consents  to all  extensions
without notice for any period or periods of time and partial  payments before or
after the Maturity Date without prejudice to the Holder.

         7. WAIVER.  The Holder's  failure to exercise any option or right given
by this Note  shall not  constitute  a waiver of (a) the right to  exercise  the
option  or right at any  other  time,  or if  there is any  default  or (b) this
non-waiver provision.

         8.  COLLECTION.  The  Company  agrees to pay all costs and  expenses of
collection, including, without limitation, the reasonable attorneys' fees, costs
and disbursements of the Holder, in the event any action,  suit or proceeding is
brought by Holder to collect on this Note.

         9.  GOVERNING LAW. This Note has been executed and delivered in Nevada,
and shall be governed by and construed in accordance  with the laws of the State
of Nevada and without regard to the law of conflicts of law.  Holder agrees that
jurisdiction  and venue for all actions to enforce this Note lie solely in State
of Nevada.

Page 2 - Non-Negotiable Convertible Promissory Note
<PAGE>
         10.  NONNEGOTIABILITY.  This Note is NOT NEGOTIABLE as that term may be
defined under the laws of the State of Nevada.

COMPANY:                                          HOLDER:

ENCOMPASS HOLDINGS, INC.                          ROTARY ENGINE, INC.

By: /s/ ARTHUR N. ROBINS                          /s/ SCOTT WEBBER
   -------------------------------------------    ------------------------------
    Arthur N. Robins, Chief Executive Officer     Scott Webber, per authority of
                                                  the Board of Directors

Page 3 - Non-Negotiable Convertible Promissory Note
<PAGE>
                                   EXHIBIT "B"
                                       TO
                           ASSET ACQUISITION AGREEMENT
                              DATED MARCH 28, 2006

                                  BILL OF SALE

         The undersigned,  Rotary Engine, Inc. a Nevada  corporation,  and Larry
Cooper;  Scott Webber; and Shirley Harmon,  jointly and severally,  for good and
valuable  consideration,  and  pursuant to the terms and  condition  of an Asset
Acquisition  Agreement  dated March 28, 2006, by and among the  undersigned  and
Rotary Engine  Technology,  Inc., a Nevada  corporation and Encompass  Holdings,
Inc., a Nevada corporation,  hereby convey,  transfer and assign Xtreme Engines,
Inc,  all right,  title and  interest,  in and to all Assets  referred to in the
aforesaid Asset Acquisition Agreement.  To have and to hold the same unto Xtreme
Engines, Inc., its administrators, successors and assigns forever.

         And the undersigned do for themselves and their respective,  executors,
administrators,  successors and assigns, warrant and represent that the title to
be conveyed for the aforesaid Assets will be good,  their transfer  rightful and
free from any security interest or other lien or encumbrance.

Dated : March 28, 2006.

ROTARY ENGINE, INC.

By: /s/ SCOTT WEBBER
   -------------------------------
Scott Webber, per authority of the
Board of Directors

/s/ LARRY COOPER
----------------------------------------
Larry Cooper

/s/ SCOTT WEBBER
----------------------------------------
Scott Webber

/s/ SHIRLEY HARMON
----------------------------------------
Shirley HarmonExhibit 10.2

                              CONSULTING AGREEMENT

DATE:             March 28, 2006, to be effective as of February 14, 2006.

BETWEEN:          Rotary Engine Technologies, Inc.
                  1005 Terminal Way, Suite 110
                  Reno, NV 89502-2179                               ("Company")

AND:              Scott Webber
                  6339 Carmel Drive
                  Redding, CA 96003                                 ("Webber")

                                    RECITALS

         Webber desires to provide certain consulting and advisory services to
the Company and the Company desires to retain Webber to perform such services
pursuant to the terms and conditions of this Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants referred to
herein, the parties agree as follows:

                                    AGREEMENT

         1. RETENTION OF WEBBER. The Company hereby retains Webber to perform,
and Webber hereby agrees to perform, consulting and advisory services for the
Company upon the terms and conditions of this Agreement.

         2. TERM. The term of this Agreement shall commence on the date of this
Agreement and shall continue for sixty (60) months thereafter, subject to annual
renewals, unless earlier terminated in accordance with Section 9 of this
Agreement.

         3. DUTIES OF WEBBER. Webber agrees to provide certain consulting and
advisory services ("Services"), more specifically described in the attached
Exhibit "A", which is incorporated by reference. The Services shall be rendered
over a period of time and in such reasonable manner as may be mutually agreed
upon between the Company and Webber, consistent with Webber's other activities
and businesses. The Services shall not be in connection with the offer and sale
of securities of the Company in a capital raising transaction, nor shall such
services directly or indirectly promote or maintain a market for any of the
Company's securities.

Consulting Agreement - Page 1
<PAGE>
         4. COMPENSATION OF WEBBER.

                  4.1 CASH COMPENSATION. The annual cash compensation to be paid
to Webber for services rendered under this Agreement shall be Sixty Thousand
Dollars ($60,000.00), payable monthly. The initial annual compensation shall be
increased to $120,000.00 at such time as Aqua Xtremes, Inc., of which the
Company is a wholly-owned subsidiary, shall have either (a) delivered a minimum
of three hundred (300) Xboards(TM) per month to customers for a period of two
(2) consecutive months; or (b) completed the production, sale, and delivery of
one of the Company's engines; or (c) completed the sale and delivery of three
thousand (3,000) 407 or 814 Wankel engines.

                  4.2 NON-CASH COMPENSATION. As additional compensation,
Encompass Holdings, Inc., of which the Company is a second-tier subsidiary,
shall issue to Webber its common stock ("Encompass Shares") in an amount equal
to $100,000 based on the closing bid price of the Encompass Shares as quoted on
the OTC Bulletin Board on the date of issuance of the Encompass Shares.

         5. EXPENSES. Webber shall be entitled to reimbursement from the Company
for reasonable expenses necessarily incurred by Webber in the performance of
Webber's services under this Agreement, upon presentation of vouchers indicating
in detail the amount and business purpose of each such expense and upon
compliance with the Company's reimbursement policies established from time to
time.

         6. REGISTRATION STATEMENT. The Company shall take all corporate action
necessary to file and have declared effective a registration statement on Form
S-8, or any successor forms, with the United States Securities and Exchange
Commission, covering the issuance to Webber of the Encompass Shares.

         7. LIABILITY/INDEMNIFICATION.

                  (a) The Company agrees that Webber shall not be liable for any
damages or injury to the Company or any of its employees, agents or
representatives or for the loss of or damage to the property of the Company, in
any manner based upon the performance of duties under this Agreement, unless
such injury, loss or damage is caused by the intentional misconduct of Webber.

                  (b) The Company agrees to indemnify and hold Webber harmless
for any claims, loss, damage or costs, including attorney's fees, which are
asserted against or incurred by Webber and which are a result of the duties
performed by Webber for the Company, unless caused by the intentional misconduct
of Webber.

Consulting Agreement - Page 2
<PAGE>
                  (c) Webber agrees to indemnify and hold the Company, its
officers, directors, employees, agents and representatives harmless for any
claims, loss, damage or costs, including attorney's fees, which are asserted
against or incurred by The Company and which are a result of the duties
performed by Webber for the Company, unless caused by the intentional misconduct
of the Company.

         8. CONFIDENTIALITY.

                  8.1 CONFIDENTIALITY. Webber acknowledges and agrees that all
planning information, lists of the Company's clients, financial information, and
other Company data related to its business ("Confidential Information") are
valuable assets of the Company. Except for information that is a matter of
public record, Webber shall not, during the term of this Agreement or after the
termination of employment with the Company, disclose any Confidential
Information to any person or use any Confidential Information for the benefit of
Webber or any other person, except with the prior written consent of the
Company.

                  8.2 RETURN OF DOCUMENTS. Webber acknowledges and agrees that
all originals and copies of records, reports, documents, lists, plans, drawings,
memoranda, notes, and other documentation related to the business of the Company
or containing any Confidential Information shall be the sole and exclusive
property of the Company, and shall be returned to the Company upon the
termination of employment with the Company or upon the written request of the
Company.

                  8.3 INJUNCTION. Webber agrees that it would be difficult to
measure damages to the Company from any breach by Webber of subsections 8.1 or
8.2 and that monetary damages would be an inadequate remedy for any such breach.
Accordingly, Webber agrees that if Webber shall breach or take steps preliminary
to breaching subsections 8.1 or 8.2, the Company shall be entitled, in addition
to all other remedies it may have at law or in equity, to an injunction or other
appropriate orders to restrain any such breach, without showing or proving any
actual damage sustained by the Company.

                  8.4 NO RELEASE. Webber agrees that the termination of
employment with the Company shall not release Webber from any obligations under
subsections 8.1, 8.2 or 8.3 of this Section 8.

         9. TERMINATION.

                  9.1 TERMINATION BY PRIOR NOTICE. The services of Webber may be
terminated either by the Company, for cause, or by Webber, upon the giving of
seven (7) days' prior written notice to the other party. In addition, this
Agreement may be terminated at any time upon the mutual written agreement of the
Company and Employee. "For cause" shall be defined as the occurrence of any one
of the following events:

                           9.2.1 Webber willfully and continuously fails or
refuses to comply with

Consulting Agreement - Page 3
<PAGE>
the policies, standards, and regulations of the Company established from time to
time;

                           9.2.2 Webber engages in fraud, dishonesty, or any
other act of misconduct in the performance of Webber's duties on behalf of the
Company;

                           9.2.3 Webber fails to perform any provision of this
Agreement to be performed by Webber;

                           9.2.4 All or substantially all the assets of the
Company are sold, transferred, or otherwise disposed of, the Company's assets
are distributed to its shareholders in liquidation, or the Company's business is
discontinued; or

                           9.2.5 Webber suffers a permanent disability. For
purposes of this Agreement, "permanent disability" shall be defined as Webber's
inability, due to illness, accident, or other cause, to perform the majority of
Webber's services for a period of ninety (90) days or more despite reasonable
accommodation by the Company.

                  9.3 PRORATION OF ANNUAL COMPENSATION. Upon the termination of
Webber's services hereunder, the then current annual compensation payable to
Webber pursuant to Section 2.1 of this Agreement shall be prorated to the date
of such termination.

         10. COVENANT NOT TO COMPETE. During the term of this Agreement, and for
a period of one (1) year hereafter, Webber shall not, directly or indirectly, as
proprietor, partner, limited partner, member of a limited liability company,
shareholder, officer, director, Webber, agent or representative, engage in a
Competitive Business Activity within the United States. "Competitive Business
Activity" shall mean the usual and customary products and services provided by
the Company. In addition, during the term of his employment under this
Agreement, and for a period of one (1) year thereafter, Webber shall not,
directly or indirectly, hire the employees of the Company to engage in a
Competitive Business Activity within the United States nor shall Webber solicit
any employees or customers to leave the Company.

         11. REPRESENTATIONS AND WARRANTIES OF WEBBER. Webber represents and
warrants to the Company that there is no employment contract or any other
contractual obligation to which Webber is subject which prevents Webber from
entering into this Agreement or from performing fully Webber's services under
this Agreement.

         10. MISCELLANEOUS PROVISIONS.

                  10.1 The wavier by either the Company or Webber of a breach of
any provision of this Agreement will not operate by either the Company as a
waiver of any subsequent breach by either the Company or Webber.

                  10.2 This Agreement shall be binding upon and shall inure to
the benefit of

Consulting Agreement - Page 4
<PAGE>
both the Company and Webber and then respective successors, heirs, and legal
representatives; however, neither this Agreement nor any rights hereunder may be
assigned by either the Company or Webber without the written consent of the
other party.

                  10.3 No amendment or variation of the terms and conditions of
this Agreement shall be valid unless it is in writing and signed by the Company
and Webber.

                  10.4 All notices required or permitted to be given under this
Agreement shall be in writing. Notices may be served by certified or registered
mail, postage prepaid with return receipt requested; by private courier,
prepaid; by telex, facsimile or other telecommunications device capable of
transmitting or creating a written record; or personally. Mailed notices shall
be deemed delivered ten (10) days after mailing, properly addressed. Notices
sent by courier shall be deemed delivered on that date the courier warrants the
delivery will occur. Telex or telecommunicated notices shall be deemed delivered
when receipt is either confirmed by confirming transmission equipment or
acknowledged by the addressee or its office. Personal delivery shall be
effective when accomplished. Unless a party changes its address by giving notice
to the other party as provided herein, notices shall be delivered to the parties
at the addresses first set forth above

                  10.5 In the event suit or action is instituted to enforce any
of the terms of this Agreement, the prevailing party shall be entitled to
recover from the other party such sum as the Court may adjudge reasonable as
attorney's fees at trial or on appeal, in addition to all other sums provided by
law.

                  10.6 This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Nevada.

                  10.7 This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supercedes all prior oral or written agreements and understandings with respect
thereto.

                  10.8 This Agreement may be executed in several counterpart
copies, each of which shall be deemed an original and shall constitute one
agreement.

         IN WITNESS WHEREOF, this Agreement is executed on the day and year
first above written.

ROTARY ENGINES TECHNOLOGIES, INC.           Webber:

By:/s/ ARTHUR N. ROBINS                     /s/ SCOTT WEBBER
---------------------------------           -----------------------------------
Title: Chief Executive Officer              Scott Webber

Consulting Agreement - Page 5
<PAGE>
                                   EXHIBIT "A"

                       DESCRIPTION OF CONSULTING SERVICES

         All services involving the development of rotary engine technology and
rotary engines

Consulting Agreement - Page 6

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