EX-10.1: ENGINEERING, PROCUREMENT AND CONSTRUCTION OF A WAVE ENERGY POWER PLANT

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Exhibit 10.1

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

ENGINEERING, PROCUREMENT AND CONSTRUCTION OF A WAVE ENERGY
POWER PLANT

AT

"PUNTA DEL PESCADOR"

(SANTONA, SPAIN)

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CONTENTS

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1. DEFINITIONS............................................................ 6

2. OBJECT................................................................. 13

3. SCOPE.................................................................. 14

4. DOCUMENTATION.......................................................... 14

5. INDUSTRIAL INTELLECTUAL PROPERTY....................................... 15

6. INSPECTIONS AND TESTS.................................................. 16

7. ASSEMBLY AND INSTALLATION OF EQUIPMENT................................. 17

8. COMMISSIONING OF THE PLANT............................................. 18

8.1 PROTOCOL.......................................................... 18

8.2 COMMISSIONING PERIOD.............................................. 18

9. PROVISIONAL ACCEPTANCE................................................. 19

10. DEFINITIVE ACCEPTANCE.................................................. 20

11. MODIFICATIONS OF THE WORKS............................................. 21

12. CALENDAR AND TIME FOR COMPLETION....................................... 22

12.1 TIME FOR COMPLETION............................................... 22

12.2 MONTHLY PROGRESS REPORTS.......................................... 22

12.3 MONITORING AND CONTROL MEETINGS................................... 23

13. TEMPORARY SUSPENSION OF WORK........................................... 23

13.1 SUSPENSION BY THE CLIENT.......................................... 23

13.2 SUSPENSION BY COURT OR ADMINISTRATIVE AUTHORITY................... 24

13.3 SUSPENSION BY THE CONTRACTOR...................................... 24

13.4 RECOMMENCEMENT OF WORK............................................ 24

14. OTHER OBLIGATIONS OF THE CONTRACTOR.................................... 25
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14.1 CONTRACTOR'S MANPOWER............................................. 25

14.2 HEALTH AND SAFETY................................................. 26

14.3 TRAINING.......................................................... 27

14.4 COMPLIANCE WITH THE LAW........................................... 27

14.5 ENVIRONMENTAL PROTECTION.......................................... 27

14.6 EQUIPMENT AND MATERIALS........................................... 28

14.7 REPLACEMENTS PARTS AND CONSUMABLES................................ 28

15. REGULATIONS AND OFFICIAL PROVISIONS CONCERNING EQUIPMENT LICENCES AND
PERMITS................................................................ 28

16. INSURANCE

16.1 CONTRACTOR'S INSURANCE............................................ 29

16.2 INSURANCE DOCUMENTS............................................... 32

17. SUBCONTRACTING......................................................... 32

18. CONTRACT PRICE......................................................... 33

19. TERMS OF PAYMENT AND BILLING........................................... 36

19.1 SCHEDULE OF MILESTONE............................................. 36

19.2 COMPLETION OF MILESTONE........................................... 36

19.3 INVOICING......................................................... 36

20. PERFORMANCE BOND....................................................... 37

21. WARRANTIES............................................................. 38

21.1 OWNERSHIP GUARANTEE............................................... 38

21.2 QUALITY GUARANTEE................................................. 39

21.3 REPAIR AND REPLACEMENT GUARANTEE.................................. 39

21.4 POWER OUTPUT GUARANTEE............................................ 40
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21.5 ENERGY PRODUCTION GUARANTEE....................................... 40

21.6 SPARE PARTS GUARANTEE............................................. 41

21.7 LIMITATIONS ON GUARANTEES......................................... 41

22. CLIENT'S OBLIGATIONS................................................... 41

22.1 ACCESS TO THE SITE AND PERMITS.................................... 41

22.2 INFORMATION....................................................... 41

22.3 OTHER CLIENT OBLIGATIONS.......................................... 41

23. LIABILITY.............................................................. 42

24. FORCE MAJEURE.......................................................... 43

25. CHANGES IN LEGISLATION................................................. 44

26. CLIENT'S AND CONTRACTOR'S REPRESENTATIVES, NOTICES..................... 44

27. ORGANISATION........................................................... 45

28. ASSIGNMENT............................................................. 46

28. TAXES AND EXPENSES..................................................... 46

28.1. EXPENSES.......................................................... 46

28.2. TAXES............................................................. 46

29. CONFIDENTIALITY........................................................ 47

30. TERMINATION OF THE CONTRACT............................................ 49

31. DISPUTES............................................................... 50

32. CONTRACTUAL DOCUMENTS AND INTERPRETATION............................... 51

33. LANGUAGES.............................................................. 51
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ANNEXES

ANNEX I: SCOPE OF AGREEMENT

ANNEX II: SCHEDULE OF WORKS / CALENDAR

ANNEX III: TECHNICAL SPECIFICATIONS OF EQUIPMENT

ANNEX IV: MONTHLY REPORT - CONTENTS

ANNEX V: SCHEDULE OF MILESTONE

ANNEX VI: MODEL OF PROVISIONAL ACCEPTANCE CERTIFICATES

ANNEX VII: MODEL OF DEFINITIVE ACCEPTANCE CERTIFICATE

ANNEX VIII: PERFORMANCE BOND

ANNEX IX: TECHNICAL DOCUMENTATION

ANNEX X: COMMISSIONING PROTOCOL

ANNEX XI: LIST OF SUBCONTRACTORS

ANNEX XII: LIST OF AUTHORIZATIONS AND PERMITS WHICH MUST BE OBTAINED BY THE
CLIENT AND TIMELINE

ANNEX XIII: LOCATION OF THE PLANT

ANNEX XIV: PREDICTED TECHNICAL PERFORMANCE

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Agreement for the Engineering, Procurement and Construction of a Wave Energy
Power Plant

Made and entered into in Madrid on July 27, 2006.

BETWEEN

OF THE ONE PART,

IBERDROLA ENERGIAS MARINAS DE CANTABRIA, S.A., with registered offices in
Santander, Cantabria, calle Amos de Escalante, number 6, 2 B, represented by Mr.
Roberto Legaz Poignon with Spanish Identification Document number 72013299-T and
Mr. Rafael de Icaza de La Sota with Spanish Identification Document number
16.035.858-M, in their capacity as Directors, as accredited by means of the deed
of incorporation of the company signed on this date before the Notary of Madrid
Mr. Miguel Ruiz-Gallardon Garcia de la Rasilla (the "CLIENT").

AND, OF THE OTHE PART,

OCEAN POWER TECHNOLOGIES LIMITED, a company incorporated in England and Wales
Company No. 5225532) with its registered office at Warwick Innovation Centre,
Gallows Hill, Warwick CV34 6UW, United Kingdom, represented by Mr. Mark Draper,
with UK Passport number 029929083, in his capacity as Director of the company
(the "CONTRACTOR").

The CLIENT and the CONTRACTOR shall hereinafter be referred to collectively as
the "PARTIES", and individually as "PARTY".

WHEREAS

I. Whereas, IBERENOVA, OPT, SODERCAN and IDAE have entered in an agreement
dated on July 2nd, 2004 in respect of a power plant harnessing Wave Energy
in Cantabria at "Punta del Pescador", near Santona, Spain (the "SANTONA
WAVE ENERGY AGREEMENT"). Through this agreement, the parties thereto wanted
to assess the facility and the formalities as well as to confirm the
viability of the project at the site ("PHASE 1") and set the rules for
executing such a project of its viability and profitability were confirmed.

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II. Whereas, TOTAL which was interested in participating in the Santona Wave
Energy Agreement has joined the Santona Wave Energy Agreement by signing
its modification on June 17th, 2005.

III. Whereas, in January 2006 the Parties have agreed that Phase 1 had been
completed.

IV. Whereas, Phase 2A of the Santona Wave Energy Project consists of the
construction of a pilot plant of an initial power of one (01) 40 kW PB40ES
PowerBuoy, its mooring system, the underwater substation and submarine
cable both with capacity for energy evacuation of this PowerBuoy(TM) and
other nine (9) 150kW PB150 PowerBuoys(TM) and all other ancillary equipment
and services required to provide a complete installation of the
PowerBuoy(TM) 1 x 40KW PB40ES as defined in Annex I.

V. Whereas, the CLIENT resolved to sign this agreement with the CONTRACTOR,
given that the latter declares to have the necessary skill, knowledge and
experience for the required works to be executed in Phase 2A.

In virtue of the aforesaid, the Parties hereby execute this agreement for the
Engineering, Procurement and Construction of a Wave Energy Power Plant (the
"AGREEMENT"), which will be governed by the following,

CLAUSES

1. DEFINITIONS

1.1 For purposes of this Agreement, the following terms shall have the meaning
set forth beside each of them (such meanings to be equally applicable to
both the singular and plural forms of the terms defined).

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AGREEMENT Means this agreement together with all of
its Annexes.

AGREED PRICE Means the compensation due by the CLIENT to
the CONTRACTOR for the entire and
satisfactory execution of the Works
determined pursuant to Clause 18 of this
Agreement that shall be paid to the
CONTRACTOR according to the Schedule of
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Milestones.

BUSINESS DAY Means any day that is not a Saturday, Sunday
or holiday (whether a national, regional or
local holiday) in Madrid and Cantabria.

CALENDAR Means the timeline for execution of the
Works contained in Annex II.

CERTIFICATE OF COMPLETION OF Means the certificate issued by the
COMMISSIONING Contractor's Representative which accredits
that the Commissioning Period is finalized
and the Plant is ready for Provisional
Acceptance pursuant to Clause 9 of this
Agreement.

CERTIFICATE OF COMPLETION OF Means the certificate issued by the
INSTALLATION Contractor's Representative which accredits
that the Plant is ready for commissioning.

CLIENT'S REPRESENTATIVE Means the representative of the Client as
designated in Clause 26 of this agreement.

COMMISSIONING PERIOD Period commencing upon issue of the
Certificate of Completion of Installation
and finished at the signature of the
Provisional Acceptance Certificate.

CONTRACTOR'S REPRESENTATIVE Means the person appointed by the CONTRACTOR
in this Agreement under Clause 27.1, who
acts on behalf of the CONTRACTOR.

DAY Means a calendar day.

DEFINITIVE ACCEPTANCE CERTIFICATE Document to be signed by the Client and the
Contractor after conclusion of Testing
Period in accordance with Clause 10. A draft
of this document is included in Annex VII.

EQUIPMENT Means the equipment and/or materials
supplied by the
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CONTRACTOR and falling within the scope of
this Agreement, as defined in Clause 3 and
the related Annexes.

EURIBOR Means the interest rate applicable among the
banks published in Brussels for the three
months deposits in Euros as it is defined
daily in the Telerate screen, page 248,
11:00 morning time (central Europe time),
the second banking day previous to the
beginning of every period in which the
Automatic Paying System is operative in
Trans European Real Time TARGET. This rate
shall be increased, as the case may be, with
any costs, surcharges, taxes, etc, as duly
supported by documents, which are referred
to in the EURIBOR definition.

FINAL COMMISSIONING PROTOCOL Means the Commissioning Protocol delivered
by the CONTRACTOR to the CLIENT at least one
month prior to the scheduled date for
commencement of the commissioning.

FORCE MAJEURE Means any event or fact as described in
Clause 24 of this Agreement.

IBERENOVA Means Iberdrola Energias Renovables II S.A.
Sociedad Unipersonal, a company incorporated
and validly existent under the laws of
Spain; registered with the Madrid Commercial
Registry, at Section 8, Page 285710; Tax
Identification Number (C.I.F.) A-83028035,
with registered office at Madrid, Calle
Tomas Redondo, number 1.

IDAE Means Instituto para la Diversificacion y
Ahorro de la Energia, S.A., public entity
ascribed to the Ministry of
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Industry, Tourism and Commerce through the
General Secretary of Energy, with domicile
in Madrid, at Calle Madera number 8 and CIF
number Q 2820009 E.

INDEPENDENT EXPERT Means the qualified specialist appointed by
the School of Industrial Engineers of Madrid
or the Institute of Mechanical Engineers or
Electrical Engineers in London, U.K. upon
request by either Party.

INSURANCE SCHEDULE Means the required policies that the
CONTRACTOR must take out and maintain under
this Agreement.

INTELLECTUAL AND INDUSTRIAL Means all (i) trademarks, trade names,
PROPERTY Internet domain names, logos, symbols, all
applications and registrations for the
foregoing, and all goodwill associated
therewith and symbolized thereby; (ii)
patents, utility models, registrations,
invention disclosures and applications
therefore, including divisions,
continuations, continuations-in-part and
including renewals, extensions and reissues
and all inventions and discoveries whether
patentable or not; (iii) published and
unpublished works of authorship, whether
copyrightable or not (including databases
and other compilations of information),
Copyrights therein and thereto, and
registrations and applications therefore,
and all renewals, extensions, restorations
and reversions thereof; and (iv) other
industrial and intellectual property or
proprietary rights; concerning the Plant and
the PowerBuoy(TM) system.

KNOW HOW Means all the information, trade secrets,
documents, technical data, technical
knowledge, including processes, schematics,
business methods, formulae, drawings,
prototypes, models, designs, quality control
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systems, quality standards and
specifications developed or acquired by the
CONTRACTOR, presently or in the future,
concerning the Plant and the PowerBuoy(TM)
system, or its design, construction,
commissioning, use, exploitation and
assembling.

MAJOR DEFECTS Means such defects that could affect the
production of energy by the Plant and/or the
safety of the Plant and/or of the people
working therein.

MILESTONE Means the relevant stages of progress of the
Works as described under the Schedule of
Milestones and Calendar.

MINOR DEFECTS Means such material defects that are not
Major Defects.

NOTICE OF APPROVAL Means the document issued by the Client
under Clause 19.2 (i) of this Agreement.

NOTICE OF COMPLETION Means the communication sent by the
Contractor to the Client under clause 19.2
(i) which accredits the completion of a
Milestone.

NOTICE OF PENDING WORKS Means the document issued by the Client
under Clause 19.2(ii) of this Agreement.

OPT Means Ocean Power Technologies, Inc., a
company incorporated and validly existent
under the laws of New Jersey, USA; with
registered office at 1590 Reed Road,
Pennington, NJ, USA.

ORDER FOR CHANGE Means the document signed by both the Client
and the Contractor for a given modification
of the Works under clauses 11.1 or 11.2 of
this Agreement.

PARTIES Means the Client and the Contractor jointly.
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PARTY Means the Client or the Contractor, as the
context may require.

PHASE 1 Means Phase 1 of the Santona Wave Energy
Project as defined in Recital 1 of this
Agreement in which the parties to the
Project have studied and decided about the
viability of the Project at the Site.

PHASE 2A Means Phase 2A of the Santona Wave Energy
Project as defined in Recital IV of this
Agreement, consisting of the design,
manufacture, factory tests, dispatch and
unloading, ex works delivery, assembly and
commissioning of the PowerBuoy(TM) 1 x 40kW
PB40ES, its mooring system, the underwater
substation and submarine cable both with
capacity for energy evacuation of this
PowerBuoy(TM) and other nine (9) 150kW PB150
PowerBuoys(TM) and all other ancillary
equipment and services required to provide a
complete installation of the PowerBuoy(TM) 1
x 40kW PB40ES. All as described in Annex 1.

PHASE 2B Means Phase 2B of the Santona Wave Energy
Project consisting of the design,
manufacture, factory tests, dispatch and
unloading, ex-works delivery, assembly and
commissioning of the nine PowerBuoys(TM) 9 x
150kW PB150, their mooring systems,
submarine cables and all other ancillary
equipment and services required to provide a
complete installation of the PowerBuoys(TM).

PLANT Means the wave power pilot plant
PowerBuoy(TM) 1 x 40kW PB40ES, its mooring
system as well as the underwater substation
and submarine cable (both with capacity for
energy evacuation of this PowerBuoy(TM) and
other nine (9) 150kW PB150 PowerBuoys(TM).
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POWERBUOY(TM) Means the Technology owned by the Contractor.

PRELIMINARY COMMISSIONING Means the Commissioning Protocol attached to
PROTOCOL the Agreement as Annex X.

PROVISIONAL ACCEPTANCE Document to be signed by the Client and the
CERTIFICATE OR PAC Contractor to put on record the satisfactory
completion of the Commissioning Protocol,
including all Minor Defects that the
Contractor must remedy within the Testing
Period. A draft of this Document is included
in Annex VI.

SANTONA WAVE ENERGY AGREEMENT Means the agreement signed on July 2, 2004
by OPT, IBERENOVA, SODERCAN, and IDAE, and
modified on June 17, 2005 to include TOTAL
as a party.

SANTONA WAVE ENERGY PROJECT OR Means the pilot project consisting of a
SWEP power plant harnessing wave energy with an
initial installed capacity of 1.39 MW on the
north coast of Spain based on the
Technology.

SCHEDULE OF MILESTONES Means the schedule describing the progress
of the Works and the timeline for payment of
the Agreed Price contained in Annex V.

SITE Means the place where the Plant will be
installed located at the coast opposite the
"Punta del Pescador" lighthouse in Santona,
in the Cantabrian region in Spain, as
specified in Annex XIII.

SODERCAN Means Sociedad para el Desarrollo Regional
de Cantabria, S.A., a company incorporated
and validly existent under the laws of Spain
by virtue of its
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incorporation deed granted on December 15,
1984 before the Notary of Santander, Mr.
Jose Antonio Olascoega, with number 1271 of
his public protocol; registered with the
Cantabria Commercial Registry, at Volume
296, Book 101, Sheet 60 and Page S-1751; Tax
Identification Number (C.I.F) A-3904457,
with registered office at Santander, Avenida
de Los Infantes, 32, "Quinta Labat".

SPV Means the public limited company created by
IBERENOVA, IDAE, OPT, SODERCAN and TOTAL for
the construction and operation of the
Santona Wave Project as agreed under the
Santona Wave Energy Agreement.

SUBCONTRACTORS All firms or individuals contracted by the
CONTRACTOR to do part of the Works
contemplated in this Agreement.

TAXES Means any taxes, rates, special levies
("contribuciones especiales"), charges
("exacciones parafiscales") or any other
encumbrance of tax nature, required by any
administrative authority, including
surcharges, interests and penalties.

TECHNICAL DOCUMENTATION Means the documents, workshop plans,
calculations and sketches listed in Annex IX
of this Agreement.

TECHNOLOGY Means the technology for electricity
generation harnessing the energy produced by
the waves called PowerBuoy(TM) system owned
by the CONTRACTOR. In particular, it means
all the Know How and Intellectual and
Industrial Property related to the
PowerBuoy(TM) system, including the moorings
and the
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underwater substation.

TESTING PERIOD Means [**] including [**], plus any
extensions made hereunder. Period commencing
upon signature of the Provisional Acceptance
and finishing at the signature of the
Definitive Acceptance Certificate.

TIME FOR COMPLETION Means the period of time for the
Contractors' completing the assembly,
installation and commissioning of the Plant
according to this Agreement.

TOTAL Means Total Eolica S.A., a company
incorporated and validly existent under the
laws of Spain; registered with the La Coruna
Commercial Registry, at Section 8, Page
25547; Tax Identification Number (C.I.F)
A-15745706, with registered office at
Avenida Fernando de Casas Novoa, number 37,
planta B, 3 degrees A.

WORKS Means all actions, work and services for the
supply, construction and commissioning of
the Plant described in Clause 3 of this
Agreement.
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1.2 Other terms may be defined in other clauses of this Agreement.

2. OBJECT

2.1 The object of this Agreement is the supply, construction and commissioning
of the Plant, including the design, manufacture, factory tests, transport,
dispatch and unloading, ex works delivery, civil works, assembly and
commissioning and all other ancillary equipment and services required to
provide a complete installation of the Plant, all as included in Phase 2A
of the Santona Wave Energy Project and detailed in Annex I.

2.2 The CONTRACTOR undertakes to apply all reasonable efforts to complete the
supply, construction and commissioning of the Plant within the Time for
Completion as may be
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adjusted according to the terms of this Agreement and the Calendar
contained in Annex II.

2.3 The design of the equipment included in Phase 2A that will be used for
Phase 2B will endeavour to comply also with technical requirements of Phase
2B equipment.

2.4 The CONTRACTOR shall be responsible for transport of the Equipment to the
Site and all related expenses, insurance and duties shall be for the
account of the CONTRACTOR.

2.5 The Equipment supplied hereunder shall generally comply with the
requirements set forth in Annex III.

2.6 In general, the Works shall be performed in accordance with the rules of
good practice, with the utmost diligence, care and professionalism.

3. SCOPE

3.1 The CONTRACTOR shall perform the Works and shall deliver the Equipment
according to the Technical Documentation detailed in Annex IX.

3.2 The Parties expressly declare that this is an Turnkey Contract, which means
that the CONTRACTOR will carry out all and any actions or services that may
be necessary (although not expressly mentioned in the Agreement) for
completion of the Works to meet the terms of stipulated herein and those
attached in Annex II, and all applicable standards, regulations and codes,
shall be deemed included within the scope of this Agreement, even though
they may not have been expressly mentioned in this Agreement or Annexes
hereto. Anything without which the Plant would not be in adequate condition
for normal operation shall be deemed necessary.

3.3 The terminal points of the Plant are the following:

- Submarine cable: submarine cable at the entrance of the onshore
substation or cable vault if required. Such onshore substation and/or
cable vault to be supplied by the CLIENT, and no more than
approximately [**] meters from high water level at the beach.

- SCADA System: up to and including the control panel, PLCs and monitor
within the onshore substation.

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4. DOCUMENTATION

4.1 The CONTRACTOR shall deliver to the CLIENT the Technical Documentation
listed in Annex IX, within the times and on the terms stipulated therein
and according to this Clause.

4.2 Upon signing the Provisional Acceptance Certificate, the CONTRACTOR shall
hand over the "as built" documents of the Equipment in accordance with
Annex IX, and any other documentation as may be agreed between the Parties,
all the documents generated during commissioning, including any
modifications based on reasonable written comments made by the CLIENT and
agreed by the CONTRACTOR on the Provisional Acceptance.

4.3 The CONTRACTOR shall keep at the disposal of the CLIENT a full set of the
Technical Documentation by number, title, version and date of issue and all
other documents required from the CONTRACTOR under this Agreement.

4.4 The CONTRACTOR shall bear all expenses related to the preparation of the
Technical Documentation.

4.5 For the purposes of Clause 4.1 above, the CONTRACTOR shall deliver to the
CLIENT a total of three (3) copies and a set on magnetic data carrier of
the Technical Documentation, which shall be in Spanish or English. All
technical translations shall be done by professional translators.

4.6 The CLIENT shall formally provide its approval or any reasonable comments
to the Technical Documentation within [**] days of receiving the documents.
If the CLIENT fails to respond without a reasonable justification within
this period it shall be responsible for any damages or delays arising
therefrom for the CONTRACTOR, who shall pursue with the Works that do not
require such approval. The time limit for introducing any modifications in
response to formal comments that may arise shall be agreed between the
Parties, but may under no circumstances be more than a further [**] days.
Approval, the insertion of modifications or lack of response shall not
exempt the CONTRACTOR from its further obligations and liabilities under
this Agreement.

5. INDUSTRIAL INTELLECTUAL PROPERTY

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5.1 The CONTRACTOR grants to the CLIENT, who accepts, free of charge, a
non-exclusive and irrevocable license to use the Technology for (a) the
construction and commissioning of the Plant by the CONTRACTOR; and (b) the
future use and exploitation of the Plant subject to the terms of this
Agreement. The CLIENT shall only use the Technology in connection with the
Plant.

5.2 The CLIENT acknowledges and agrees that any and all rights to the
Technology, whether copyrightable or patentable or not, are the exclusive
property of the CONTRACTOR, or the CONTRACTOR has the right to use it and
grant licenses, and this Agreement creates on the CLIENT no right on such
Technology other than the license granted by this Agreement, and subject to
the terms and restrictions contained hereunder.

5.3 The CONTRACTOR holds all Intellectual and Industrial Property over its own
Technology.

5.4 The CLIENT, by virtue of this Agreement shall not acquire any rights over
the trade marks, "know-how", business secrets, trade names, information,
documentation or any other Intellectual and Industrial Property used or
developed by the CONTRACTOR in relation to the Technology.

5.5 The CLIENT hereby assigns and agrees to assign to the CONTRACTOR entire
right, title and interest in and to all inventions, improvements or
discoveries (whether or not patentable) made, conceived or first reduced to
practice by the CLIENT based on the Technology.

5.6 The owner of all Intellectual and Industrial Property and Know How over the
Technology is and shall forever be the CONTRACTOR.

5.7 The CLIENT agrees to promptly disclose the inventions, improvements and
discoveries specified hereinabove to the CONTRACTOR, and will assist in
reasonable manner to obtain for the CONTRACTOR's own benefit patents
thereon at the expense of CONTRACTOR. The CLIENT further agrees that the
obligations and undertakings stated in this paragraph shall continue beyond
the termination for any reason of this Agreement but if the CLIENT is
called upon to render such assistance after such

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termination, then it shall be entitled to a fair and reasonable fee in
addition to reimbursement of any expenses incurred at the request of the
CONTRACTOR.

6. INSPECTIONS AND TESTS

6.1 The CONTRACTOR shall allow the CLIENT to make such inspections, checks,
tests and reports as the Client may consider necessary, during the
manufacturing, assembly and testing phases, at the factories and workshops
of both the Contractor and its suppliers and/or Subcontractors.

6.2 The CONTRACTOR will inform the CLIENT in writing with a prior notice of at
least [**] Business Days, of the dates and places for inspections and tests
and, particularly, of those that the CLIENT specifically requested.

6.3 The CLIENT must inform the CONTRACTOR at least [**] Business Days in
advance of whether it will attend the inspections and tests. If the CLIENT
is unable to attend, the Contractor will either proceed in his absence, or
make reasonable effort to reschedule the test, in which case the CONTRACTOR
may adjust the Calendar accordingly.

6.4 The CLIENT may establish minimum inspection requirements to check that the
Equipment and/or Works conform to the applicable specifications to be
agreed with the CONTRACTOR. Should the CLIENT confirm and the CONTRACTOR
agree, during any inspection or test that the specifications or standards
have not been met, the CLIENT may freely reject the Equipment and/or Work
in question at no additional charge or expense and this shall not be deemed
tantamount to acceptance by the CLIENT of any delay in the Time for
Completion or alteration of the Agreed Price.

6.5 The inspections or tests by the CLIENT shall not release the CONTRACTOR
from any of its obligations or liabilities under this Agreement nor shall
they be deemed equivalent to acceptance of the Equipment thereof.

6.6 If any fault or defect is discovered during testing and/or inspection as
contemplated in Clause 6.4, the CONTRACTOR shall be responsible for
correcting the fault or defect prior to PAC.

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6.7 The CONTRACTOR shall confirm that the manufacturers of the Equipment comply
with all the requirements of the Agreement and conform to good practices in
design, engineering and manufacture.

7. ASSEMBLY AND INSTALLATION OF EQUIPMENT

7.1 Upon signature of this Agreement, the CONTRACTOR shall start each item of
the Works according to the Calendar without the need for instruction from
the CLIENT, except as outlined in Clause 7.2.

7.2 The Plant shall be installed at the Site once the CLIENT has given its
written confirmation that the required permits and consents for
installation have been obtained.

7.3 The CLIENT and the CONTRACTOR shall jointly inspect the Equipment
immediately after its arrival to the dock at [**] or other reasonable place
and issue a certificate signed by both, specifying the apparent condition
of the Equipment and any actions that may be necessary to repair or replace
forthwith any part damaged or lost during transport that may be detected
during such inspection.

7.4 Inspections by the CLIENT shall not release the CONTRACTOR from any of its
obligations and liabilities hereunder nor shall they imply acceptance of
the Plant.

7.5 As soon as the CONTRACTOR considers the assembly and installation of the
Plant complete, according to the terms of this Agreement, it shall issue a
Certificate of Completion of Installation indicating that the Plant is
ready for Commissioning.

8. COMMISSIONING OF THE PLANT

8.1 PROTOCOL

During the commissioning of the Plant, the CLIENT shall appoint an overseer, who
shall check the correct application of the Commissioning Protocols. The
CONTRACTOR shall deliver the Final Commissioning Protocol to the CLIENT that
must contain at least the tests detailed in Annex X, at least [**] prior to the
scheduled date of commencement commissioning.

The CLIENT may request the CONTRACTOR [**], as may be [**] and [**]. Any [**]
that the CLIENT asks the CONTRACTOR [**].

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In Annex X is included a preliminary Commissioning Protocol.

Each of the actions included in the Commissioning Protocol carried out during
commissioning shall be recorded in the protocol or corresponding procedure,
dated and signed by the person effecting the action and the person responsible
for commissioning.

If any fault, failure or Major Defects, as defined in this Agreement are
detected in any of the Equipment, the CONTRACTOR shall be obliged to remedy the
problem during the Commissioning Period.

8.2 COMMISSIONING PERIOD

The proper functioning of the Plant shall be checked during this Commissioning
Period according to the Final Commissioning Protocol.

For finalising the Commissioning Period is required that the Plant will be in
operation for [**] producing energy measured at the electrical output from the
PowerBuoy.

Once the Commissioning Period is finalised the CONTRACTOR shall issue a
Certificate of Completion of Commissioning and shall notify the CLIENT
indicating that the Plant is ready for Provisional Acceptance.

9. PROVISIONAL ACCEPTANCE

9.1 Upon termination of the Commissioning Period, the CONTRACTOR shall notify
the CLIENT in writing, indicating:

a) A date proposed by the CONTRACTOR for a joint visit with the
CLIENT. The proposed date shall be at least [**] Business Days
after the date of notification. If the proposed date is not
convenient for the CLIENT, it may be postponed to a later date no
more than [**] Business Days after the latest date indicated in
the initial proposal.

b) The confirmation that the Commissioning Period has finalised
satisfactorily.

c) The confirmation of delivery of all Technical Documentation under
Clause 4.

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9.2 The Equipment, temporary installations and materials left over from the
Works shall be removed by the CONTRACTOR after completing assembly, leaving
the Site totally free and clear, as a prerequisite for signing of the
corresponding PAC of the Plant.

9.3 During the joint visit, the Parties shall inspect the state of the
Equipment and complete a check list, indicating any defects and/or
irregularities detected and any pending Works. The CONTRACTOR shall remedy
within the following [**] weeks at least those [**], after which the CLIENT
and the CONTRACTOR shall proceed to do a new visit and complete a new check
list with the [**] so the CLIENT could sign the PAC of the Plant and attach
to it the list of pending matters.

9.4 If the Parties do not reach an agreement as to the existence and/or remedy
of [**] and consequent obligation of issue of the PAC, any of them may
entrust their divergence to an Independent Expert, who will decide on [**]
days from its engagement and whose decision shall be final and binding for
both Parties.

9.5 The Independent Expert will not be required and the PAC should be issued,
if the competent authority from the industry regional department of
Cantabria issues the definite start-up certificate to operate the Plant
(acta de puesta en marcha definitiva).

9.6 The [**] of the Equipment shall be listed as [**] within the times agreed
upon signing the PAC. If the [**] within the agreed times, the CLIENT may
[**] itself or commission a third party to do so, for the [**] and without
releasing the latter from its responsibilities.

9.7 If, for reasons beyond the control of the CONTRACTOR, it is not possible to
effect the commissioning of the Plant, the Parties shall agree on how to
proceed to obtain the PAC without jeopardizing the interests of the CLIENT.
In any case, provided it is signed, the PAC would contain the corresponding
reservations and the CONTRACTOR would undertake to do whatever has been
established for the Commissioning Period as soon as the impeding obstacles
have disappeared. This document shall indicate the effective date of
beginning of the Testing Period for the purposes of the Definitive
Acceptance of the Plant.

9.8 Upon signing the Provisional Acceptance Certificate ownership of the Plant
and the Equipment object of this Agreement shall be transferred to the
CLIENT. The

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CONTRACTOR shall bear the risks of loss of or damage to the Plant and the
Equipment up to the effective transfer of ownership, without prejudice to
the other guarantees and liabilities of the CONTRACTOR hereunder. The
Contractor will be responsible for the care and preservation of the Plant
until its Provisional Acceptance.

10. DEFINITIVE ACCEPTANCE

10.1. Definitive Acceptance for the Plant shall be issued after the end of the
Testing Period, provided that the pending [**] indicated in the PAC and any
others detected during the Testing Period have been remedied and provided
that the CONTRACTOR delivers the information required under Clauses 21.4
and 21.5 to confirm the fulfillment of the guaranteed values included
therein.

10.2. If the Parties do not reach an agreement as to the fulfillment of the
above criteria and consequent obligation of issue of the DAC, any of them
may entrust their divergence to an Independent Expert, who will decide on
[**] days from its engagement and whose decision shall be final and binding
for both Parties.

10.3. The CONTRACTOR shall deliver to the CLIENT an updated version of Annex XIV
based on real data collected during the Testing Period. The CONTRACTOR
shall deliver such information within [**] days following the Definitive
Acceptance for the Plant.

11. MODIFICATIONS OF THE WORKS

11.1. MODIFICATIONS AT THE CLIENT'S REQUEST

11.1.1. The CLIENT may request the CONTRACTOR to undertake any type of changes
or modifications of the Works subject to this clause.

11.1.2. Within the period of [**] Business Days of the reception of the CLIENT's
request, the CONTRACTOR should prepare and provide the CLIENT with the
following information:

a) A description of the necessary tasks in order to undertake the
requested modifications;

b) The time period for its execution;

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c) The impact of these modifications, where appropriate, on the Calendar
and the completion of the Milestone(s);

d) The consequent adjustment to the Agreed Price that will be required,
if any.

11.1.3. Once both Parties agree in writing on all the above items, they will
formalize the corresponding Order for Change that will be executed by the
CONTRACTOR according to its terms.

11.1.4. When the CLIENT asks the CONTRACTOR for a change or modification of the
Works and if the Parties do not reach an agreement as to any of the items
of the Order for Change, any of them may entrust their divergence to an
Independent Expert, who will decide on [**] days from its engagement and
whose decision shall be final and binding for both Parties.

11.1.5. For the avoidance of doubt the Parties hereby acknowledge and accept
that the changes or modifications to the Works shall not imply a reduction
of more than [**]% of the scope of the Works as detained in Annex I.

11.2. MODIFICATIONS AT THE CONTRACTOR'S REQUEST

11.2.1. The CONTRACTOR may request the CLIENT to undertake any type of changes
or modifications of the Works subject to this clause.

11.2.2. For such purposes, the CONTRACTOR will send the CLIENT a change proposal
that will contain the items described in clause 11.1.2 a) to d) as well as
an explanation of the need or convenience of the requested modification.

11.2.3. Once both Parties agree in writing on all the above items, they will
formalize the corresponding Order for Change that will be executed by the
CONTRACTOR according to its terms.

11.2.4. Should the change or modification requested not be approved by the
CLIENT, the Works will be executed as initially forseen according to this
Agreement. The lack of written agreement in a [**] days term will be
considered as a rejection of the modification requested by the CONTRACTOR.

12. CALENDAR AND TIME FOR COMPLETION

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12.1 TIME FOR COMPLETION

The CONTRACTOR estimates that the assembly, installation and commissioning of
the Plant shall be completed within the Time for Completion according to the
Calendar.

Any changes to the Calendar that affect the Time for Completion must be approved
in writing by both the CONTRACTOR and the CLIENT, except as otherwise provided
under this Agreement.

The Parties accept and agreed that the Time for Completion is an estimation
prepared on the assumption that each Milestone will be performed at a given date
and time of the year, and that any delays in the performance of Works, Force
Majeure, obtaining of licences or supply of Equipment shall have an impact on
the following stages of the Calendar and on the whole Time for Completion which
may be more proportional to referred delay.

12.2 MONTHLY PROGRESS REPORTS

The CONTRACTOR shall submit monthly progress reports covering all aspects of the
Works. The scope of this report is described in Annex IV hereto.

12.3 MONITORING AND CONTROL MEETINGS

The CONTRACTOR's Representative shall hold weekly meetings with the CLIENT's
Representative (or the engineer appointed by the CLIENT to oversee the Works
done by the CONTRACTOR) to monitor and control the progress of the Works. These
meetings may be attended by the representatives of other suppliers or
Subcontractors. The CLIENT's Representative may attend accompanied by a
specialist, acting as the CLIENT's advisor. The CONTRACTOR's and CLIENT's
Representatives may agree that such weekly meetings may be held by telephone.

13. TEMPORARY SUSPENSION OF WORK

13.1 SUSPENSION BY THE CLIENT

The CLIENT may [**] order the CONTRACTOR to suspend all or part of the Works.
Any such orders shall be made in writing, indicating the part of the Works that
is to be suspended, the effective date of suspension and the expected date for
resuming Works. If the CLIENT orders the suspension of the Works on the grounds
of non-fulfillment by the CONTRACTOR of its obligations under this Agreement,
the latter shall not be entitled to any increase in the Agreed

<PAGE>

Price, nor shall the Time for Completion be increased, and the CLIENT shall be
entitled to financial compensation for the expenses incurred as a result of this
situation, subject to documentary evidence of those expenses and the CLIENT
shall be obliged to act diligently in order to mimimise such costs. If the
CLIENT order suspension of the Works without it being due to non-fulfillment by
the CONTRACTOR of its obligations under this Agreement, the CLIENT shall
reimburse the CONTRACTOR for any expenses incurred as a result of the
suspension, subject to documentary evidence thereof, and the CONTRACTOR shall be
obliged to act diligently in order to mimimise such costs and the Time for
Completion shall be extended in accordance with the duration of the suspension.

If the suspension required by the CLIENT lasts for more than four months, the
CONTRACTOR may request the CLIENT's permission to proceed. Such request is made
by written notice. If the permission is not granted within thirty (30) days, the
CONTRACTOR may by further written notice to the CLIENT terminate the Agreement.

13.2 SUSPENSION BY COURT OR ADMINISTRATIVE AUTHORITY

In the event of suspension, halting or total or partial cessation of the Work on
the Plant ordered by any judicial or administrative authority, or by either of
the Parties following instructions from any judicial or administrative
authority, the consequences of the delay, in financial terms and in the Calendar
and the Time for Completion, shall be borne by the Party responsible for the
obligation whose non-fulfillment or incorrect fulfillment gave rise to the court
or administrative action. If this suspension, halting or cessation is not
founded on the actions or omissions of either Party, the Completion Period shall
be extended by a period of time equal to the duration of the situation or such
longer time as may be reasonable in the circumstances and the Parties shall
agree on a fair solution regarding the effects on the contractual obligations of
each Party during the suspension. The CONTRACTOR undertakes to act diligently to
protect and maintain the Works if it has commenced, to avoid any loss or damage.

If the suspension ordered by any court or administrative authority is founded on
actions for which both Parties are responsible, the costs incurred thereby shall
be borne by both Parties in equal proportions.

<PAGE>

If the suspension ordered by any judicial or administrative authority, or by
either of the Parties following instruction from any judicial or administrative
authority, is prolonged for more than 4 months either Party may terminate this
Agreement.

13.3 SUSPENSION BY THE CONTRACTOR

The CONTRACTOR may totally or partially suspend the Works when the CLIENT is in
delay of its payment obligations under this Agreement and does not cure such
delay within the thirty (30) days following written demand from the CONTRACTOR
for such purpose. The CONTRACTOR undertakes to act diligently to protect and
maintain the Works if it has commenced, to avoid any loss or damage.

If any given suspension lasts for more than 60 (sixty) days, the CONTRACTOR may
terminate this Agreement by written notice to the CLIENT.

13.4 RECOMMENCEMENT OF WORK

When the CONTRACTOR receives instructions to resume the Works on the Plant after
any suspension contemplated in the preceding paragraphs, the CONTRACTOR shall
examine the Work affected by the suspension, remedying any defect or loss
produced during the suspension and informing the CLIENT thereof upon
recommencement of the Works. The costs that the CONTRACTOR incurs from examining
and remedying the Works will be added to the Agreed Price save if suspension was
due to non fulfillment by the CONTRACTOR or if the suspension is ordered by
court or administrative authority and the CONTRACTOR is deemed responsible for
this suspension.

14. OTHER OBLIGATIONS OF THE CONTRACTOR

14.1 CONTRACTOR'S MANPOWER

The Contractor should employ necessary, sufficient and suitable personnel for
the execution of the Works, and will be liable for the performance of such
personnel with regard to the work. Any personnel hired by the Contractor and,
where appropriate, by its Subcontractors, should have sufficient qualifications,
preparation and experience for the execution of the Works object of this
Agreement. The Contractor will be in charge of hiring all labour and their
payment.

There shall be no employment relationship whatsoever between the CONTRACTOR's
employees and the CLIENT. The CLIENT shall not be liable, not even collaterally,
for the

<PAGE>

employer's obligations of the CONTRACTOR, which shall be solely answerable to
any public authority, courts and its employees.

Consequently, the CONTRACTOR shall be exclusively liable for all the legal
requirements concerning these employees. In particular, all and any
contributions payable for its employees in strict compliance of the applicable
laws and regulations in Spain, compensation for accidents and other charges
established in the prevailing labour laws shall be payable by the CONTRACTOR.

The CONTRACTOR undertakes to prove, on the simple request by the CLIENT that it
complies strictly at all times with the prevailing labour and social security
laws and regulations.

The CONTRACTOR shall be obliged to provide, for its own account, all the means,
tools and instruments required for the Works.

The CONTRACTOR's Representative shall be responsible for the discipline,
organization, management, oversight and control of the CONTRACTOR's employees,
as well as for the oversight of the suppliers and Subcontractors and shall see
that the Works are done in adequate technical and safety conditions, informing
the CLIENT's representative of any irregularities or incidents that may occur.

14.2 HEALTH AND SAFETY

The CONTRACTOR shall comply with all prevailing administrative provisions
regarding health and safety during performance of the Works. The CONTRACTOR
shall see that its employees heed the prevailing legal provisions on health and
safety at work. The CONTRACTOR shall be exclusively liable for any fines or
other penalties that may be imposed for infringement of health and safety legal
provisions affecting the Works.

The expenses relating to the foregoing (fees, insurance and third-party
liability) shall be for the account of the CONTRACTOR, except those relating to
consultants, which shall be payable by the CLIENT.

If the CONTRACTOR is forced to replace any of the persons with legal functions
on this matter, it shall give the CLIENT prior notice, indicating the reasons
for such replacement, the curriculum of the proposed substitute and legal
authorization to perform the corresponding duties, and the CLIENT shall
authorize such substitution, if appropriate, w