Exhibit 10.46


                  VESSEL PURCHASE AND SALE AGREEMENT (PARTIAL INTEREST)
Agreement made this 31st day of October, 1996, between

                           Abejon Rotary Power Corporation
                           4960 North Harbor Drive
                           San Diego, CA 92106

                  hereinafter referred to as "SELLER;" and

                           Rotary Power International, Inc.
                           P.O. Box 128
                           Wood-Ridge, NJ 07075-128

                  hereinafter referred to as "BUYER," with reference to the
following facts:

                  WHEREAS, Hydro Lance Maritime Transport, Inc., a California
corporation, ("Hydro Lance") owes BUYER $1,110,250 for the September 30, 1996
installment payment (the "Hydro Lance Installment Obligation") pursuant to its
promissory note, and related documentation dated 2/6/96, (the "Loan Agreement");

                  WHEREAS, SELLER owes Hydro Lance $1,110,250 pursuant to its
promissory note dated 2/6/96 (the "Abejon Installment Obligation");

                  WHEREAS, SELLER owns certain shares of BUYER's common stock
which it pledged as security for payment of the Loan Agreement, 208,333 shares
of which are scheduled for release from pledge on payment of the Installment
Obligation (the "Released Shares"); and,

                  WHEREAS, Hydro Lance and BUYER are willing to satisfy the
Hydro Lance Installment Obligation, and SELLER and Hydro Lance are willing to
satisfy the Abejon Installment Obligation, as follows:

                  (a)      SELLER shall transfer to BUYER a 47.7% interest in
                           the Vessel, valued at $1,110,250, in satisfaction
                           of the Hydro Lance Installment Obligation to BUYER,
                           and BUYER shall release from pledge to SELLER the
                           Released Shares, and send confirmation of
                           satisfaction of the Hydro Lance Installment
                           Obligation to Hydro Lance; in consideration for
                           such transfer of interest in the Vessel to satisfy
                           Hydro Lance's Installment Obligation and by

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                           separate agreement, Hydro Lance will deem satisfied
                           the Abejon Installment obligation to Hydro Lance of
                           the same amount.

                  (b)      Contemporaneously therewith, SELLER and BUYER as
                           sole members shall form a limited liability
                           company, and contribute their respective interests
                           in the Vessel to the limited liability company.
                           The sole asset of the company shall be the Vessel,
                           and the members' respective percentage interests
                           therein shall be the same as their percentage
                           interests in the Vessel prior to its transfer to
                           the Company.   SELLER shall have the obligation to
                           return BUYER's capital contribution,  valued at
                           $1,110,250, on sale of the Vessel in exchange for
                           BUYER's membership interest.

                  (c)      The intent of the parties is for BUYER to
                           ultimately receive $1,110,250 cash from proceeds of
                           the sale of the Vessel, with an interest in the
                           Vessel of like value until the sale closes, and for
                           the Hydro Lance Installment Obligation and Abejon
                           Installment Obligation Lo be satisfied and the
                           Released Shares released from pledge, on transfer
                           of an interest in the Vessel to BUYER.

                  NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

                  1. The BUYER agrees to purchase and the SELLER agrees to sell
an undivided 47.7% interest as tenants in common, in the Vessel with Abejon
described herein as:

                  LIBERATED LADY, Official No. 952781, Documented Port of Long
                  Beach, California; a catamaran, 65' LOA, 31' beam, 3' draft,
                  powered by four (4) 300 HP StarDec diesel engines, complete as
                  to operational systems, propulsion and navigation systems, but
                  without a finished interior, interior carpentry, interior
                  doors and hatches, and safety apparatus, designed by Howard
                  Apolonio and Lee Engineering, built by Abejon Rotary Power
                  Corporation in California, U.S.A.

                  2. The partial interest purchase price is One Million One
Hundred Ten Thousand Two Hundred Fifty Dollars ($1,110,250) payable as follows.
RPI hereby discharges the Hydro Lance Installment Obligation of $1,110,250 and
agrees to immediately (a) release to Abejon the Released Shares and (b) send
confirmation of satisfaction of the Hydro Lance Installment Obligation to Hydro

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Lance at the address for notice provided in the Loan Agreement.
Contemporaneously herewith, RPI agrees to contribute its interest in the Vessel
purchased hereunder to Mar Trans Associates, L.L.C., a California L.L.C., in
exchange for a 47.7% membership interest therein.

                  3. The Vessel is being delivered free and clear of all debts,
claims, liens and encumbrances of any kind whatsoever, excepting only a Three
Hundred Seventy Five Thousand Dollar ($375,000) note payable to Big Bee
Holdings, an Arizona Trust, secured by a lien on the Vessel as noted
hereinafter. SELLER warrants that it has good and marketable title thereto.
SELLER will deliver to the BUYER all necessary documents for the transfer of
title on or before the closing date.

                  4. Vessel is moored at 4960 North Harbor Drive, San Diego,
California, in America's Cup Harbor together with all gear, machinery,
equipment, furnishings and all other articles and appurtenances thereto. BUYER
will accept its interest in the Vessel on the closing date and at that port and
mooring.

                  5. It is agreed that the risk of loss, injury or destruction
of said Vessel and equipment shall be borne by the SELLER until the Vessel is
delivered.

                  6. Sales or use taxes, value added taxes, duties and ad
valorem taxes and fees imposed on this Vessel, if any, are the responsibility of
the SELLER. Duties, taxes and fees on the Vessel to any state, country or
regulatory authority incurred prior to the date of closing, if any, shall be the
responsibility of the SELLER. If permission of any authority is necessary to
purchase or operate this Vessel it shall be the responsibility of the SELLER to
cooperate fully to obtain same, except that any costs created thereby shall be
borne by the SELLER.

                  7. The Vessel is purchased by BUYER "AS IS." SELLER DOES NOT
WARRANT THAT IT IS OF MERCHANTABLE QUALITY OR CAN BE USED FOR ANY PARTICULAR
PURPOSE.

                  8. This contract shall be binding on all parties herein, their
heirs, personal representative and/or assigns when this contract shall have been
signed by all parties or their fully authorized agents. SELLER agrees not to
sell the Vessel or enter into any contract for the sale of same while this
contract is in effect.

                  9. This document contains the entire agreement between the
parties hereto and is agreed and understood that there are no other duties,
obligations, liabilities or warranties, expressed or implied or otherwise,
except as therein contained.

                  10. The venue for any legal action arising out of this
contract shall be in San Diego County, in the State of California, in the United
States of America, and shall be determined by the laws of the State of
California. The prevailing party of any legal

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action or proceeding brought hereunder shall be entitled to its reasonable and
necessary expenses and legal fees.

                  11. This being a contract arranged between principals of BUYER
and SELLER, there will be no commissions or transaction fees paid to any
principal or agent of the parties to this contract.


BUYER:

ROTARY POWER INTERNATIONAL, INC.


By:/s/ Richard M.H. Thompson
   ---------------------------------
   Richard M. H. Thompson, President

SELLER:

ABEJON ROTARY POWER CORPORATION


By:/s/ Ken Brody
------------------------------------
   Ken Brody, President

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