OCEAN POWER CORPORATION
                                 ELEKTRYON, INC.
                               LICENSING AGREEMENT


         THIS  AGREEMENT  ("Agreement"),  made on the Effective  Date as defined
herein, is by and among Ocean Power Corporation, a Delaware corporation having a
principal place of business at 5000 Robert J. Mathews Parkway,  El Dorado Hills,
California 95762,  ("OPC"),  and Elektryon,  Inc., a Nevada corporation having a
principal  place of  business  6565  Spencer  Street,  Las Vegas,  Nevada  89119
("Licensor")  hereinafter  referred  to  as  "Party"  and  collectively  as  the
"Parties."

         WHEREAS,  Licensor  own  rights,  title and  interest in and to certain
patented and unpatented technology;

         WHEREAS,  OPC desires to obtain from  Licensor and Licensor  desires to
grant OPC certain exclusive and non-exclusive rights in and to their technology;

         NOW,  THEREFORE,  in  consideration  of  the  terms,  conditions,   and
agreements  contained  herein and other  good and  valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the Parties hereby
agree as follows:

                                    Article 1
                                   Definitions

         As used in this  Agreement,  the following  terms have the meanings set
out below and as further defined elsewhere in this Agreement.

1.1      "Affiliate(s)" means any entity:

         a)       in which Licensor or OPC controls, or is under common control,
                  or  is  directly  or  indirectly  owned  by  or  under  common
                  ownership  to the  extent of over  fifty  (50%) or more of the
                  voting shares, including shares owned beneficially by a Party;
                  or

         b)       which owns or controls Licensor or OPC.

1.2      "Licensor  Patent(s)"  means all patents issued in the United States or
         any foreign country,  or any  applications  for patents,  including any
         patents of addition,  utility models, utility patents,  design patents,
         re-issues, divisions, continuations, or the like: (i) owned by Licensor
         on the Effective  Date or during the term of this Agreement and (ii) to
         which Licensor has rights during the term of this Agreement that may be
         granted, transferred or otherwise conveyed to OPC without violating the
         terms of any obligations with respect to third parties.  A current list
         of  Licensor   Patents  is  provided   under   separate  cover  and  is
         incorporated herein.

1.3      "Effective Date" of this Agreement is the date of complete execution by
         the Parties of the signature page of this Agreement.

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1.4      "Improvements" means any Technical Information which:

         a)       reduces  production  costs,  improves  performance,  increases
                  service  life,  increases   marketability,   or  improves  the
                  appearance of Licensed Products;

         b)       any  modification to Licensed  Products which comes within the
                  scope of one or more claims of any of the Patents;

         c)       any  product,  apparatus,  or  process  which is  similar  to,
                  competitive   to,  a  substitute   or   alternative   for,  or
                  supplements or complements Licensed Products;

         d)       any  invention or discovery of any new apparatus or method for
                  producing Licensed Products, or

         e)       any new product which may be produced as Licensed Products.

1.5      "Licensed  Product(s)"  means any  product(s)  practicing  the  Patents
         and/or  Improvements  as the case may be,  pursuant  to the  terms  and
         conditions of this Agreement.

1.6      "Licensor" means Licensor.

1.7      "Patents" means the Licensor Patent(s).

1.8      "Technical Information" means inventions,  trade secrets,  confidential
         information,  and know-how  applicable on the Effective  Date or during
         the term of this  Agreement,  which the Parties have the legal right to
         convey.   Technical  Information  includes,  but  is  not  limited  to,
         research,  engineering and manufacturing information,  information with
         respect to environmental and safety requirements, analytical procedures
         and techniques,  operating procedures,  maintenance  practices,  design
         information on  manufacturing  facilities and equipment,  machinery and
         equipment  specifications,  product  test  methods,  drawings,  product
         production  processes,  computer files,  product  information and other
         general information related to Licensed Product(s).

                                    Article 2
                                 Grant of Rights

2.1      Principal  Rights  Licensed to OPC:  Licensor  hereby grants to OPC the
         non-exclusive  right and  license  within  the  United  States  and the
         exclusive,  worldwide right and license outside of the United States to
         buy, make, have made, use, distribute,  install, offer to sell and sell
         Licensed  Products for the term of this Agreement  (including the right
         to  sub-license  the  rights  granted  to OPC  herein).  OPC  shall not
         sub-license  any of  the  rights  granted  to OPC  herein  without  the
         approval  of  Licensor,   which  approval  shall  not  be  unreasonably
         withheld.  Any  sub-license  shall be  conditioned  upon  agreement  by
         sub-licensee  to the terms and conditions of this Licensing  Agreement,
         including, without limitation, Article 7 herein.

2.2      Loss of  Exclusivity:  If OPC does not buy or arrange for the sale of a
         minimum of 200 units of the Licensed  Product  during the calendar year
         2002, and a minimum of 200 such units in each calendar year thereafter,
         OPC's  exclusive  worldwide right and license outside the United States
         shall become, and thereafter remain, non-exclusive.

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<PAGE>

                                    Article 3
                                      Parts

3.1      OPC, its  Affiliates and licensees will have the right to purchase from
         Licensor  parts for the  Licensed  Products if  available  for delivery
         anywhere in the world at prices to be  negotiated  between the Parties,
         which price shall in no event exceed  Licensor's  current lowest quoted
         sales  prices.  OPC will regard  Licensor as a preferred  supplier  for
         large  commercial  generators  for so long as reasonable  standards for
         quality, delivery, and price are met by Licensor.
                                    Article 4
                                Term of Agreement

4.1      This  Agreement  shall become  effective as of the  Effective  Date and
         shall continue for a period of five (5) years.

4.2      This  Agreement  may be  terminated  by OPC or Licensor for the other's
         uncured default under Paragraph 5.1 of this Agreement.

4.3      Upon  termination of this  Agreement,  by expiration or otherwise,  all
         licenses,  rights, privileges and obligations hereunder shall cease and
         terminate  except that the licenses and rights  granted under Article 2
         hereof shall  continue as to all  Licensed  Products  manufactured,  or
         actually  in  manufacture,  during  the term of this  Agreement  by the
         Parties or by any of their  Affiliates or licensees,  for the full term
         of the Patent(s) and life of the Licensed Products. Termination of this
         Agreement  shall,  at  the  option  of  Licensor,  also  terminate  any
         sub-licenses granted hereunder by OPC.

                                    Article 5
                                     Default

5.1      Default:  A Party will be deemed in default under this  Agreement if a)
         the Party fails to pay any amount due and payable under this  Agreement
         within thirty (30) days after  written  notice that the same has become
         due and payable;  b) the Party becomes insolvent,  bankrupt,  or any of
         its assets are seized or placed in trust for the  benefit of  creditors
         and such insolvency, bankruptcy or seizure is not dissolved or cured in
         sixty (60) days; or c) the Party fails to perform any other  obligation
         required to be  performed  by it under this  Agreement  or to cure,  or
         begin to effect a cure for any such  failure,  within  thirty (30) days
         after written notice from the other Party that the time herein provided
         for such  performance  has passed.  Notwithstanding  Paragraph  5.1(b),
         Licensor  shall  not be  deemed  to be in  default  by the  filing of a
         petition  under Chapter 11 of the  Bankruptcy  Code in connection  with
         efforts by Licensor and OPC to combine or merge the parties pursuant to
         a Merger Agreement or document of similar intent.

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<PAGE>

5.2      Remedy for  Default:  OPC and Licensor may pursue any remedy under this
         Agreement or otherwise available, based on the default of the other.

                                    Article 6
                                  Remuneration

6.1      In  consideration  for the  licenses  granted  to OPC,  OPC will pay to
         Licensor  the  sum  of  One  Hundred  and  Fifty  Thousand  Dollars  US
         ($150,000)  within thirty (30) days of the execution of this Agreement.
         Pursuant to a Letter of Intent dated October 4, 2001 by and between OPC
         and Licensor,  the parties  contemplate that OPC will obtain, by merger
         or asset purchase,  substantially all of the assets of Licensor. In the
         event of such merger/asset purchase, the One Hundred and Fifty Thousand
         Dollars ($150,000) payment provided for herein shall be applied to, and
         shall reduce accordingly, the agreed upon purchase/merger price

6.2      As further  consideration for the licenses granted to OPC, OPC will pay
         to Licensor the price per licensed  product  agreed upon by the parties
         from time to time,  which  will in no event  exceed  the  lowest  price
         charged to any other  third  party  purchaser  of  Licensor's  licensed
         products.

6.3      As further  consideration for the licenses granted to OPC, OPC will pay
         to Licensor  five (5) percent of the raw cost of any licensed  product,
         on a per unit  basis,  which OPC  makes or has made by any party  other
         than Licensor.  Raw cost shall mean the sum of direct material cost and
         direct labor cost per unit.

6.4      Wire Transfer: Payment shall be made by wire transfer after delivery of
         a licensed  product and within 15 days of receipt by OPC of any invoice
         from  Licensor  payable to  Licensor's  account in the bank  identified
         below, or as otherwise requested by Licensor in writing:

                  Name of Bank:
                  Account No.:
                  Address of Bank:
                  Account Name:

                                    Article 7
                         Confidentiality of Information

7.1      Licensor and OPC each  acknowledge  that,  in the course of  performing
         their  respective  obligations  hereunder,  they will obtain or come in
         contact with confidential  information,  including  without  limitation
         Technical Information, of the other. Licensor and OPC shall:

         a)       use the other's  confidential  information  only in connection
                  with fulfilling such Party's obligations under this Agreement.
                  Officers,  employees, agents or independent contractors of OPC
                  or  Licensor   will  be  given  access  to  the   confidential
                  information  on a need to know  basis.  Each  shall  obtain an
                  agreement in a form  satisfactory to the other, from each such

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<PAGE>

                  person to whom such  disclosure is made pursuant to which such
                  person  will  agree  to be  bound  by the  provisions  of this
                  Article 7, including,  but not limited to, any third parties a
                  Party will have make any part for the Licensed Products.  Each
                  hereto shall be responsible for any breach of these provisions
                  by it or any of its employees, officers, agents or independent
                  contractors.  In the event that a Party hereto  believes it is
                  compelled  by  law to  disclose  confidential  information  of
                  another  Party,  it shall  immediately  notify  that Party and
                  shall  cooperate  with any  effort  by that  Party to obtain a
                  protective order or otherwise limit the disclosure of any such
                  confidential information. These obligations shall extend for a
                  period three (3) years from the end of the term or termination
                  of this Agreement; and

         b)       hold  all  confidential  information  of  a  Party  in  strict
                  confidence  and exercise due care with respect to its handling
                  and  protection,  consistent  with such  Party's own  policies
                  concerning protection of its confidential  information of like
                  importance, but in no event less than reasonable care.

7.2      The  obligations  set forth in Section  7.1 will not apply to a Party's
         confidential information which:

         a)       now or later becomes  generally known or available  through no
                  act or omission by the receiving Party;

         b)       the receiving Party can demonstrate it independently developed
                  its confidential information without the use of, or access to,
                  the information furnished to it by the disclosing Party;

         c)       is or becomes publicly available through issued patents(s), or
                  other printed publications;

         d)       is  hereafter  disclosed  to the  disclosing  Party by a third
                  party  having  no  obligations  of   confidentiality   to  the
                  disclosing Party with respect to such information; or

         e)       was known to the receiving Party prior to its receipt from the
                  disclosing  Party as  established  by written  records of that
                  Party.

7.3      Licensor  and OPC may  disclose  the  contents  of  this  Agreement  to
         lenders,  other financing sources and potential financing sources or as
         may be  required  in  filings  with  federal  and/or  state  securities
         authorities  provided that such lenders and the other financing sources
         and  potential  persons  have a need to know and agree to be bound by a
         confidential agreement acceptable to the Parties.  Nothing herein shall
         prevent either party from  disclosing the contents of this Agreement to
         its  shareholders or to the SEC or any other federal or state agency as
         required by any state or federal laws.

7.4      The  provisions  of this  Article 7 shall  survive  for three (3) years
         after the end of the term or the termination of this Agreement.

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                                    Article 8
                         Warranties and Representations

8.1      By Licensor:  Licensor  represents  and warrants that (i) it own(s) all
         right,  title,  and  control(s)  all  interests  in and to the Licensor
         Patents and Improvements or has the right, power and authority to grant
         all licensed rights thereto, (ii) it has the right, power and authority
         to grant all licensed rights herein, (iii) it) has the right, power and
         authority to enter into this Agreement,  (iv) to the best of its(their)
         knowledge the rights granted hereunder to OPC do not infringe any third
         party's  intellectual  property rights, and (v) its performance of this
         Agreement will not violate any agreement between Licensor and any third
         party.

8.2      By OPC: OPC  represents  and warrants that it has the right,  power and
         authority to enter into this  Agreement and that OPC's  performance  of
         this Agreement will not violate any agreement between OPC and any third
         party.

                                    Article 9
                  Technical Assistance and Technology Transfer

9.1      The Parties contemplate that OPC may require technical  assistance from
         Licensor  in  order  to  achieve  the  objectives  of  this  Agreement.
         Accordingly,  Licensor  will make  available  to OPC,  its  Affiliates,
         licensees and their employees and agents, technical consulting services
         at the lowest quoted  consulting  rates for such services from Licensor
         within  the United  States.  Licensor  will make good faith  efforts to
         provide  needed  consulting   services  or  to  arrange  for  competent
         consulting  services from qualified third parties outside of the United
         States at the sole cost of OPC.

9.2      Licensor  shall  disclose to OPC the  existing  documentation  and data
         related  to the  technology  disclosed  in  the  Licensor  Patents  and
         Improvements.  OPC will bear the  direct  cost of the  transfer  of the
         information,  including technical  assistance and time required for the
         disclosure.

                                   Article 10
                               Patent Maintenance

10.1     Licensor   shall  continue  to  maintain   responsibility   (and  costs
         associated therewith) for filing,  prosecution,  and maintenance of the
         Licensor  Patents.  OPC agrees to cooperate with Licensor in any patent
         defense as may be required under the  circumstances.  In the event that
         Licensor  desire(s) to discontinue  such activity,  Licensor shall give
         OPC  adequate  written  notice of  its/their  decision  so that OPC may
         decide  whether to have Licensor  assign  ownership of such patents and
         patent  applications to OPC so that OPC may assume  responsibility  for
         their  continued  maintenance  or  prosecution.  Where,  in OPC's  sole
         discretion,  OPC decides to assume the responsibility for the continued
         maintenance or prosecution of the applicable  Licensor Patents pursuant
         to this Section 10.1,  Licensor shall assign ownership for such patents
         and patent  applications  subject  to  Licensor  royalty-free  right to
         continue to use such patents  during the term of this Agreement and for
         the duration of such applicable patent(s).

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                                   Article 11
                                   Assignment

11.1     Nonassignability:  Except as otherwise  provided in this Agreement,  no
         Party shall be entitled to transfer, assign, convey, sell, encumber, or
         in any way  alienate  ("Transfer")  all or any  part of its  rights  or
         obligations under this Agreement,  except that a Party may at any time,
         with the prior  written  consent of the other Parties (such consent not
         to be unreasonably withheld or delayed) Transfer all, but not less than
         all, of its rights and  obligations  under this Agreement to any entity
         that owns or acquires a  controlling  portion of the stock or assets of
         such Party,  and such rights and obligations may only be Transferred by
         any  such  assignee  subject  to the  provisions  of this  Article  11.
         Transfers  in violation of this Article 11 or in violation of any other
         provision  of this  Agreement  shall be void ab initio and of no effect
         whatsoever.

                                   Article 12
                                    Covenants

12.1     Licensor  covenants to disclose to OPC on a reasonably prompt basis all
         Improvements it or its Affiliates or licensees  develop during the term
         of this Agreement.

12.2     OPC covenants to disclose to Licensor on a reasonably  prompt basis all
         Improvements it or its Affiliates or licensees  develop during the term
         of this Agreement.

                                   Article 13
                                   Integration

13.1     This  Agreement  sets  forth the  entire  agreement  and  understanding
         between  the  Parties as to the  subject  matter  hereof and merges all
         prior  discussions  between  them.  No  Party  shall  be  bound  by any
         warranties,  understanding  or  representations  with  respect  to such
         subject matter other than as expressly  provided herein or in a writing
         signed  with  or  subsequent  to  execution  hereof  by  an  authorized
         representative of the Party to be bound thereby.

                                   Article 14
                                  Severability

14.1     If at any time during the term of this  Agreement any provision  hereof
         proves to be or becomes invalid or  unenforceable  under any applicable
         law,  then  such  provision  shall be  deemed  modified  to the  extent
         necessary in order to render such provision valid and  enforceable;  if
         such provision may not be saved,  it shall be severed and the remainder
         of this Agreement shall remain in full force and effect.


                                   Article 15
                                    Headings

15.1     The captions in this Agreement are for  convenience  only and shall not
         be considered a part of or affect the construction or interpretation of
         any provision hereof.

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                                   Article 16
                           Relationship of the Parties

16.1     Nothing in this Agreement shall be construed as making OPC and Licensor
         the partner, joint venturer, agent, employer, or employee of the other.
         Neither  OPC  nor  Licensor  shall  have  the  authority  to  make  any
         statements,  representations or commitments of any kind, or to take any
         action  which  shall be binding on the other,  except as  provided  for
         herein or authorized in writing by the Party to be bound.

                                   Article 17
                          Authority and Enforceability

17.1     The  signature  of a  Party's  representative  constitutes  an  express
         representation  that said representative has the authority to bind that
         Party to the  terms of this  Agreement  and  that  the  Agreement  is a
         binding obligation of that Party, enforceable according to its terms.

                                   Article 18
                                 Communications

18.1     For the purpose of all written  communications  and notices between the
         Parties, their addresses shall be:

                  Licensor:           ELEKTRYON, INC.
                                      6565 Spencer Street
                                      Las Vegas, Nevada 89119
                                      United States of America

                                      Attn:

                                      and

                  OCEAN POWER:        Ocean Power Corporation
                                      5000 Robert J. Mathews Parkway
                                      El Dorado Hills, California 95762
                                      United States of America

                                      Attn: Joseph P. Maceda, President

         or any other  addresses  of which a Party  shall  notify  the others in
         writing.  All  notices  required  or  permitted  to be given under this
         Agreement shall be in writing and will be deemed effectively given upon
         personal  delivery or delivery by confirmed fax to the Party or Parties
         to be  notified  or two  (2)  days  after  deposit  with  a  recognized
         overnight  courier  service  with  tracking  capability  to  the  above
         address(es).

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                                   Article 19
                                  Force Majeure

19.1     No  Party  shall  be held  liable  to  another  Party  to  perform  its
         obligations  where such  performance is prevented or interfered with by
         riots, war or hostilities between any nation, acts of God, fire, storm,
         flood, earthquake,  strikes, labor disputes, shortage or curtailment of
         raw   materials,   labor  power  or  other  utility   services  or  any
         governmental restrictions.

                                   Article 20
                                  Governing Law

20.1     All  matters  of  construction,  validity,  and  performance,  shall be
         governed by and construed  and enforced in accordance  with the laws of
         the State of Delaware,  as applied to contracts made, executed,  and to
         be fully  performed  in such state by citizens  of such state,  without
         regard to its conflict or choice of law rules. All unresolved  disputes
         arising  out of or  related  to this  Agreement  shall  be  settled  by
         arbitration in accordance with the commercial  arbitration rules of the
         American  Arbitration  Association.  Arbitration  proceedings  shall be
         conducted  in the  English  language  and  take  place  in  Sacramento,
         California.

                                   Article 21
                                     Waiver

21.1     No waiver of any right or remedy in respect to any  occurrence or event
         on one  occasion  will be  deemed a waiver  of such  right or remedy in
         respect of such occurrence or event on any subsequent occasion.

                                   Article 22
                                  Publications

22.1     In the event that a Party  desires to  publish or  disclose  to a third
         party the terms of this  Agreement,  a description of the nature of the
         relationship  created by this  Agreement,  data,  costs, or performance
         attributes of any Licensed  Products,  such intent will be communicated
         to the other Party or Parties,  and such publication shall be permitted
         only upon prior agreement of the Parties. Notwithstanding any agreement
         between the Parties to the contrary,  OPC may publish that the Parties'
         have  entered into an exclusive  licensing  agreement  for the Licensor
         Patents and Improvements.



                                   Article 23
                                 Patent Marking

23.1     Each Party hereto  agrees to mark or have marked all Licensed  Products
         sold,  respectively,  by it,  or any of its  respective  Affiliates  or
         licensees,  with the word  "Patent"  or  "Patents,"  and the  number or
         numbers of the applicable OPC Patent(s) and/or Licensor Patent(s).

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<PAGE>

                                   Article 24
                                  Miscellaneous

24.1     Patent, Trademarks and Tradenames: No Party to this Agreement grants to
         another  Party any rights in any patents,  trademarks,  service  marks,
         tradenames  or any other  intellectual  property  rights of such  Party
         other than those rights specifically set out in this Agreement.

               THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK

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         IN WITNESS WHEREOF,  the Parties have executed this Agreement as of the
Effective Date, and this Agreement will be deemed dated as of such date.



                  ELEKTRYON, INC.



                  By:_______________________________________

                  Name:_____________________________________
                                          (typed or printed)

                  Title:____________________________________


                  Date:                               , 2001
                       -------------------------------------



                  OCEAN POWER CORPORATION



                  By:_______________________________________

                  Name              JOSEPH P. MACEDA,
                  ------------------------------------------

                  Title:            PRESIDENT
                        ------------------------------------

                  Date:                               , 2001
                       -------------------------------------

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