Exhibit 10.16
                                  Attachment I

                           Draft Project Collaborative
                      Between Ocean Power and EPRIsolutions

1.   Ocean  Power  has  developed   small  Stirling   Engine  power  system  for
     distributed power applications.

2.   Ocean Power seeks to commercialize  these systems in the U.S. and seeks the
     assistance of EPRIsolutions  and its network of electric and gas utilities.
     Ocean Power also seeks electric and gas utilities as strategic partners and
     potential distributors of its product.

3.   Ocean  Power  plans  to  form  a  new  venture   (NewCo)  in  the  U.S.  to
     commercialize  the  Stirling  Engine  and  other   distributed   generation
     technologies.

4.   EPRIsolutions  can  conduct  initial  baseline  testing at its world  class
     EPRI-PEAC  test facility in Knoxville,  TN. Such testing will provide NewCo
     with  information  regarding their product's  ability to meet US electrical
     interconnection and power quality  requirements.  EPRIsolutions  testing of
     the NewCo product will provide important referencing and products readiness
     information  for the US market.  The  details  of the Phase I approach  are
     outlined below:

5.   NewCo will provide a unit and ship it to EPRIsolutions'  test facility at a
     price estimated at about $75,000 for testing at its EPRI-PEAC facility.

6.   EPRIsolutions  will  test the unit at its own cost  under a  pre-determined
     test protocol.

7.   EPRIsolutions  will provide NewCo with a test report and will reference the
     testing in a mutually agreed upon press release.

8.   NewCo and  EPRIsolutions  will  launch a  business  collaborative  outlined
     below.

9.   NewCo will grant  EPRIsolutions an exclusive role in securing 20 beta units
     in the US,  Canada for at least a min. one year period.  EPRIsolutions  can
     also secure beta sites in Japan, and in developing  countries.  The outside
     US strategy will be developed with NewCo.

10.  NewCo will develop  pricing and terms for the beta unit for  field-testing.
     Such pricing  will be FOB TBD.  NewCo will also  provide  arrangements  for
     shipping or transporting  beta units to US test sites.  Shipping costs will
     be paid by NewCo.

11.  EPRIsolutions will obtain commitments for 20 beta units for a US field test
     and demonstration via a private R&D collaborative.

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12.  EPRIsolutions  will manage the organization of the field test effort.  This
     field test program  will include  periodic  meetings;  discussion  of field
     deployment results such as siting,  permitting,  operation and maintenance,
     etc.

13.  NewCo or the Utilities will own the beta test units. If owned by NewCo they
     will be returned at NewCo's expense after the testing period.

14.  NewCo will provide  necessary  field test support as may be required by the
     host utilities.

15.  NewCo will provide initial training for  installation  and operation.  Such
     training  could also be  developed  in concert  with  EPRIsolutions  at its
     EPRI-PEAC facility.

16.  In  return   for   EPRIsolutions   efforts   at   facilities   of   NewCo's
     commercialization  venture in the US. NewCo will develop value  proposition
     terms for both EPRIsolutions and its electric and gas members:

17.  Such terms could include the following:

     a)  NewCo  shall  issue  a  mutually   agreeable   number  of  warrants  to
         EPRIsolutions  in return  for its  purchase  of the  pre-beta  Stirling
         engine to be  validation  tested in Phase I. The strike  price for such
         warrants shall be mutually agreed upon.

     b)  NewCo shall issue  warrants to electric  and gas  utilities  for each $
         committed  by electric and gas  utilities  and paid to NewCo for a beta
         unit and  responding  EPRIsolutions'  private  R&D  collaborative  with
         NewCo.  The strike  price for such  warrants  shall be mutually  agreed
         upon.

     c)  NewCo  shall  grant each  participating  electric or gas utility in the
         field test program an option to be US distributor. Terms of such option
         will be developed.

     d)  NewCo shall grant EPRIsolutions warrants in NewCo for every $ US dollar
         of revenue  committed and paid to NewCo either  directly by electric or
         gas utilities  responding to an EPRIsolutions  private R&D solicitation
         or indirectly to NewCo via an  EPRIsolutions/NewCo  purchase order. The
         strike price for such warrants shall be mutually agreed upon.

This is a  non-binding  agreement.  Both  parties  agree to develop this project
under a best effort basis.

/s/ Dan Rastler
---------------
Dan Rastler
Area Manager
Distributed Technologies
EPRIsolutions

/s/ Joseph P. Maceda
--------------------
Joseph P. Maceda
President
Ocean Power