<PAGE>

                                                                    EXHIBIT 10.4

               OPTION AGREEMENT FOR PURCHASE OF EMISSIONS CREDITS

     This Option Agreement for Purchase of Emissions Credits (the "Agreement")
is made and entered into this 24 day of November, 2000 by and between OCEAN
POWER TECHNOLOGIES, INC. a New Jersey corporation, and its Affiliates (as
hereinafter defined) (collectively referred to herein as "Seller"), and WOODSIDE
SUSTAINABLE ENERGY SOLUTIONS PTY. LTD. (ACN 094 813 715), a company organized
under the laws of Australia ("Buyer");

                                   WITNESSETH:

     WHEREAS, Seller is in the business of developing, manufacturing, operating
and selling devices that capture wave energy and convert that energy into
electricity ("OPT Products");

     WHEREAS, Seller may become the beneficial owner of certain Emissions
Credits (as defined below) generated by the deployment of OPT Products;

     WHEREAS, Buyer desires to acquire from Seller, and Seller agrees to grant
to Buyer, an option to purchase such Emissions Credits upon the terms and
provisions as hereinafter set forth.

     NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged by the parties hereto and for the
mutual covenants contained herein, Seller and Buyer hereby agree as follows:

     1. DEFINITIONS.

     For the purposes of this Agreement, the following terms shall have the
meanings set forth below:

     (a)  "Affiliate" means as to any person or entity, any other person or
          entity that, directly or indirectly, through one or more
          intermediaries, controls, is controlled by, or is under common control
          with, the first person or entity, with "control" being deemed to exist
          in the event of direct or indirect ownership of 50% or more of the
          voting power or other equity interest of such person or entity.

     (b)  "Applicable Laws" means the Kyoto Protocol and applicable laws, rules,
          regulations implementing the Kyoto Protocol.

     (c)  "Compliance Period" means the first quantified emission limitation and
          reduction commitment period, as set forth in the Kyoto Protocol, but
          in no event earlier than January 1, 2008 or other date as agreed to
          between the parties from time to time but in no event later than
          December 31, 2012 or such other date as agreed to between the parties
          from time to time..

     (d)  "Convention" means the United Nations Framework Convention of Climate
          Change.


                                       1

<PAGE>

     (e)  "Destination Convention Party" means the party to the Convention in
          which the activities are located for which Buyer determines to apply
          the Emissions Credits.

     (f)  "Emissions" means (as defined in the Convention) the release of
          Greenhouse Gases and/or their precursors into the atmosphere over a
          specified area and period of time.

     (g)  "Emissions Credits" means emission reduction credits, allowances, or
          other transferable units recognized as commodities under emissions
          trading systems, auctions, markets or other transfer mechanism
          established in conjunction with Applicable Laws.

          Emission Credits are to be designated in metric tonnes of carbon
          dioxide or carbon dioxide equivalent in the case of other Greenhouse
          Gases.

     (h)  "GST" means any value added, consumption, turnover, goods and services
          tax or similar tax;

     (i)  "Greenhouse Gases" means those gaseous constituents of the atmosphere,
          both natural and anthropogenic, that absorb and re-emit infrared
          radiation (as further defined in the Convention and the Koyoto
          Protocol).

     (j)  "Kyoto Protocol" means the Kyoto Protocol to the Convention (Dec. 10,
          1997) as amended and includes all agreements adopted in succession to
          or in replacement of such Protocol from time to time.


     (k)  "Option Term" shall mean the period beginning on the commencement date
          of the Compliance Period and ending on (i) the termination date of the
          Compliance Period or (ii) the date on which Buyer has purchased the
          maximum aggregate quantity of Emissions Credits covered by the Option,
          whichever occurs first.

     (l)  "Prevailing Market Price" means (i) the price per metric tonne agreed
          by Buyer and Seller from time to time as that prevailing in the public
          market for Emissions Credits immediately prior to the date of the
          applicable Exercise Notice, or (ii) absent an agreement, the price per
          metric tonne for Emissions Credits calculated as the arithmetic
          average of the closing prices in the public market for Emissions
          Credits during the period beginning fifteen (15) days before the date
          of the relevant Exercise Notice and ending fifteen (15) days following
          the date of the relevant Exercise Notice. In the event a public market
          has not been established by the date of the applicable Exercise
          Notice, the Prevailing Market Price shall mean a reasonable price per
          metric tonne as determined by an independent expert agreed to by the
          parties or failing agreement appointed at the request of either party
          by the President for the time being of the American Arbitration
          Association, all costs associated with such appointment and
          determination to be borne by the parties in equal shares.


                                       2

<PAGE>

     (m)  "Purchase Price" means the price per metric tonne payable by Buyer to
          Seller upon exercise of the Option and purchase of Emissions Credits
          from time to time hereunder, being an amount equal to 70% of the
          Prevailing Market Price.

     (n)  "Shortfall Market Price" means the price per metric tonne calculated
          as the arithmetic average of the monthly prices for Emissions Credits
          in the public market for Emissions Credits during the twelve (12)
          months immediately preceding the end of the Option Term. In the event
          a public market has not been established by the end of the Option
          Term, the Shortfall Market Price shall mean a reasonable price per
          metric tonne as determined by an independent expert agreed to by the
          parties or failing agreement appointed at the request of either party
          by the President for the time being of the American Arbitration
          Association, all costs associated with such appointment and
          determination to be borne by the parties in equal shares. .
          Notwithstanding anything herein to the contrary, the Shortfall Market
          Price shall not exceed US$30 per metric tonne .

     (o)  "Source Convention Party" means the party to the Convention in which
          the activities are located or under the Applicable Laws of which
          Seller has obtained ownership of the Emissions Credits.

     (p)  "Taxable Supply" means any supply of goods and services which is, or
          becomes subject to, GST;

     (q)  "US$" means dollars United States of America being the lawful currency
          of United States of America.


     2. GRANT OF OPTION.

     For and in consideration of the Option Fee payable by Buyer to Seller as
set forth herein and subject to the terms and conditions of this Agreement,
Seller does hereby grant to Buyer the right and option (the "Option") to
purchase, from time to time during the Option Term, at the Purchase Price, an
aggregate of up to 500,000 metric tons of Emissions Credits upon the terms and
conditions as set forth herein.

     3. PAYMENT OF OPTION FEE.

     The Option is granted in consideration of Buyer's payment to Seller,
contemporaneous with the execution of this Agreement, of the sum of
US$600,000.00 (the "Option Fee"), by wire transfer to the account designated by
Seller. If and when the Option is exercised in accordance with the terms hereof,
the Option Fee paid by Buyer to Seller shall not apply toward the Purchase
Price.

     4. EXERCISE OF OPTION.

     Buyer may exercise this Option, in whole or in part, at any time and from
time to time during the Option Term, by giving written notice of exercise (the
"Exercise Notice") to Seller, indicating in such Exercise Notice (i) the type of
Emissions Credits desired to be purchased being those types or part of those
types available on the register of credits maintained pursuant to


                                       3

<PAGE>

clause 6, (ii) the quantity in metric tons of Emissions Credits to be purchased
being those amounts or part of those amounts available on the register of
credits maintained pursuant to clause 6, and (iii) the proposed Purchase Price
payable upon exercise. Subject to the provisions of Section 8 of this Agreement
and the determination of the applicable Purchase Price, the giving of such
Exercise Notice shall create a binding contract of purchase and sale between
Buyer and Seller with respect to the Emissions Credits covered by the Exercise
Notice. It is expressly understood and agreed that multiple exercises of the
Option shall be permitted.

     5. PURCHASE OF EMISSIONS CREDITS FOLLOWING EXERCISE.

     Within thirty (30) days following the date of the Exercise Notice, (a)
Buyer shall pay to Seller the Purchase Price for the Emissions Credits specified
in the Exercise Notice, and (b) contemporaneously therewith, Seller shall
execute and deliver to Buyer an Assignment in the form attached hereto as
Exhibit A (the "Assignment") transferring to Buyer legal title of the Emissions
Credits purchased and warranting the validity thereof.

     6. REGISTER OF CREDITS.

     The Seller shall at all times from the date of this Agreement until the
expiration of the Option Term, maintain a current register of information useful
for Buyer when electing to exercise the Option, which register shall include,
without limitation, (i) the quantity and types of Emissions Credits available to
Buyer pursuant to this Agreement, (ii) pricing, and (iii) a tally of Emissions
Credits previously purchased by Buyer from Seller, including the date of
purchase and the Purchase Price paid.

     7. OBLIGATION TO SECURE EMISSIONS CREDITS.

     (a) At all times prior to expiration of the Option Term, Seller agrees to
     use its Reasonable Best Efforts (as defined in the Stock Purchase Agreement
     of even date herewith between Buyer and Seller), and to cause all of its
     Affiliates to use their Reasonable Best Efforts, to secure all available
     legally protectable rights to any Emissions Credits to which it may be
     lawfully entitled to under Applicable Law as a result of its sale of the
     OPT Products and/or the sale of electricity produced by Seller and/or its
     Affiliates through third parties within the Source Convention Party's
     geographic boundaries.

     (b) Seller shall cause all such Emissions Credits to which Seller or its
     Affiliates may be lawfully entitled to under Applicable Law be made
     available to Buyer pursuant to the Option in the national registry (or
     equivalent mechanism established under Applicable Laws) of the Destination
     Convention Party and to be included in the register maintained by Seller
     pursuant to Section 6 hereof.

     8. FAILURE BY OPT TO SUPPLY CREDITS.

(a)  (i) In the event that Seller fails or is unable for any reason, other than
     due to the failure of Applicable Laws to allocate Emission Credits to
     Seller despite (subject to sub-paragraph (ii)) Seller's Reasonable Best
     Efforts, to sell, transfer and assign to Buyer the full quantity of
     Emissions Credits (not to exceed the maximum aggregate quantity


                                       4

<PAGE>

     covered by the Option) called by Buyer pursuant to all cumulative Exercise
     Notices received over the Option Term, Seller shall pay to Buyer, within
     twenty (20) days following expiration of the Option Term, by wire transfer
     to an account designated by Buyer, liquidated damages in an amount equal to
     (i) the shortfall in metric tons of Emissions Credits called for purchase
     by Buyer but not sold, transferred and delivered by Seller, times (ii) the
     Shortfall Market Price, times (iii) 30%. Upon payment of such liquidated
     damages, Seller and its Affiliates shall have no further obligation,
     liability or duty to Buyer.

     (ii) Notwithstanding the provisions of this Agreement, Seller may without
     breaching its obligations under this Agreement, dispose of any Emission
     Credits entered on the register pursuant to clause 6, to a third party but
     in that case these Emission Credits disposed of shall be deemed to remain
     on the register and the provisions relating to liquidated damages specified
     in sub-clause (i) are to apply as though such Emission Credits had remained
     on the clause 6 register.

(b)  In the event that Seller is unable to sell, transfer and assign to Buyer
     any quantity of Emissions Credits due to the failure of Applicable Laws to
     allocate Emissions Credits to Seller prior to expiration of the Option Term
     Seller shall pay to Buyer, within twenty (20) days following expiration of
     the Option Term, by wire transfer to an account designated by Buyer,
     liquidated damages in an amount equal to the Option Fee less the cumulative
     sum of difference between the Prevailing Market Price at the time of
     assignment of each Emission Credit to Buyer pursuant to this Agreement and
     the Purchase Price Paid by Buyer for each such Emission Credit. Upon
     payment of such liquidated damages, Seller and its Affiliates shall have no
     further obligation, liability or duty to Buyer.

     9. FAILURE BY BUYER TO PURCHASE.

     Subject to Seller complying with its obligations under Section 6 and
Section 7, including, but not limited to, recording on the Register not less
than 500 000 metric tonnes of Emissions Credits, in the event that Buyer does
not exercise its right to purchase the maximum aggregate quantity of Emissions
Credits covered by the Option during the Option Term, or if Buyer purchases less
than the maximum aggregate quantity of Emissions Credits covered by the Option
during the Option Term, Seller shall be entitled to retain the Option Fee, this
Agreement shall be of no further force and effect, and neither party hereto
shall have any further liability, obligation or duty hereunder.

     10. STAMP DUTIES AND GST.

     (a)  Stamp Duties. Buyer and Seller shall share equally in the cost of all
          statutory fees and stamp duties with respect to this Agreement, and
          the parties shall each pay their respective costs of preparation,
          review and completion of this Agreement and the Assignment.

(b) GST INDEMNITY

     (i) All payments to be made by Buyer under this agreement have been
     calculated without regard to GST. If any such payment constitutes the
     consideration for the whole


                                       5

<PAGE>

     or any part of a Taxable Supply by Seller the amount of that payment must
     be increased such that Seller will (after paying its GST liability in
     respect of the Taxable Supply) receive the amount which Seller would have
     received in the absence of a GST.

     (ii) If Seller makes any Taxable Supply to Buyer, Buyer must (save to the
     extent that Seller is entitled to be indemnified in respect of that GST by
     an increased payment under clause 10(b)(i) above) pay on demand to Seller
     an additional amount such that Seller will receive the amount (net of
     payments by it in respect of GST) which Seller would have received in the
     absence of a GST.

     (iii) If Seller becomes liable to pay any penalty or interest as a result
     of late payment of GST where that late payment is as a result of the
     failure of Buyer to comply with the terms of this clause, then Buyer must
     pay on demand to Seller an additional amount equal to the amount of that
     penalty or interest.

     11. REPRESENTATIONS AND WARRANTIES.

     Each Party represents and warrants to the other that:

     (a)  It has all necessary corporate power and authority to execute and
          deliver this Agreement and all agreements, instruments and documents
          to be executed and delivered hereunder and to consummate the
          transactions contemplated hereby and thereby, and to perform all terms
          and conditions hereof and thereof to be performed by it. The
          execution, delivery and performance of this Agreement and all
          agreements, instruments and documents to be executed and delivered by
          it hereunder, the performance of all of the terms and conditions
          hereof and thereof to be performed by it, and the consummation of the
          transactions contemplated hereby and thereby, have been duly
          authorized by all necessary corporate action, including without
          limitation, all necessary action of its board of directors (or similar
          body) and no other corporate proceedings are necessary with respect
          thereto.

     (b)  This Agreement has been duly executed and delivered by a duly
          authorized officer of such party and constitutes a legal, valid and
          binding obligation of such party, enforceable against such party in
          accordance with its terms, except as the same may be limited by
          bankruptcy, insolvency or other similar laws affecting creditors'
          rights generally and by general equity principles.

     12. INDEMNITY; LIMITATION ON DAMAGES

     Seller hereby agrees to indemnify and hold Buyer harmless from and against
any and all losses, claims, damages, liabilities, deficiencies, delinquencies,
defaults, assessments, fees, penalties or related costs or expenses, including,
but not limited to, court costs, reasonable attorneys' and accountants' fees and
disbursements (collectively referred to herein as "Claims") incurred by Buyer in
defense of claims by third parties in connection with or arising out of Seller's
breach of its obligations under this Agreement and/or the Assignment, but
reduced by any amount paid to Buyer on account of such loss by any insurance
policies which Buyer may have available. The foregoing indemnity obligation
shall expire and terminate with respect to all


                                       6

<PAGE>

Claims except for those Claims for which Seller shall have received written
notice requesting indemnity prior to the expiration of two (2) years following
termination of the Option Term. Under no circumstances shall Seller's and its
Affiliates total liability under this Agreement exceed the amount paid by Buyer
to Seller under this Agreement. In addition, under no circumstances shall Seller
, its Affiliates, or their respective officers, directors, employees or agents
be liable for special, consequential, punitive, exemplary, indirect or
incidental damages (in tort, contract, or otherwise) under or with respect to
this Agreement or the Assignment or for any failure of performance by Seller or
its Affiliates however caused.

     13. FURTHER ASSURANCES.

     Each party hereto agrees, without further consideration, to execute and
deliver any and all certificates, instruments, assignments or agreements, and to
take and do any and all other actions, as may be reasonably requested by the
other in order to fulfill the conditions, consummate and make effective the
transactions contemplated by this Agreement, including without limitation such
actions as will vest, perfect or confirm of record or otherwise in Buyer or its
designee all right, title and interest in and to the Option and all Emissions
Credits purchased upon exercise of the Option. Nothing in this Section 13 shall
be deemed to obligate either party to execute any certificate, instrument,
assignment or agreement which increases its liabilities and obligations beyond
that set forth in this Agreement.

     14. MISCELLANEOUS.

     (a)  Payment of Certain Fees and Expenses. Subject to Section 10(a), each
          of the parties hereto shall pay the fees and expenses incurred by it
          in connection with the negotiation, preparation, execution and
          performance of this Agreement, including, without limitation, brokers'
          fees, attorneys' fees and accountants' fees.

     (b)  Notices. All notices requests, demands and other communications which
          are required or may be given under this Agreement shall be in writing
          and shall be deemed to have been duly given if delivered personally,
          by facsimile or by overnight courier, or if mailed, by first class
          mail, postage prepaid, return receipt requested, in each case
          addressed as follows:

               If to Seller:

               Ocean Power Technologies, Inc.
               1590 Reed Road
               Pennington NJ 08534 USA
               Attention: George W. Taylor
               Facsimile: 1 609 730 0404 (United States of America no.)


                                       7

<PAGE>

               If to Buyer:

               Woodside Sustainable Energy Solutions Pty. Ltd.
               1 Adelaide Terrace
               Perth, Western Australia 6000
               Attention: Richard Beresford
               Facsimile: 61 8 9348 4411 (Australian no.)

or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, requests, demands and
communications shall be deemed effective on the date of delivery, transmission
or deposit, as applicable, in the case of personal delivery, facsimile or
overnight courier, or on the fifth business day after the mailing thereof.

     (c)  Entire Agreement. This Agreement (including the Exhibits hereto)
          constitutes the entire agreement between the parties hereto and
          supersedes all prior agreements and understandings, oral and written,
          between the parties hereto with respect to the subject matter hereof.

     (d)  Binding Effect; Benefit. This Agreement shall inure to the benefit of
          and be binding upon the parties hereto and their respective permitted
          heirs, personal representatives, successors and assigns.

     (e)  Assignability. This Agreement shall not be assignable by either party
          without the prior written consent of the other party; provided,
          however, that Buyer shall be entitled to assign this Agreement to an
          Affiliate of Buyer without the consent of Seller; provided that the
          Affiliate expressly agrees in writing to be bound by this Agreement by
          a form of deed satisfactory to Seller and to unconditionally assume
          all of the obligations of Buyer hereunder and Buyer unconditionally
          guarantees the performance hereof by the Affiliate by a form of
          guarantee satisfactory to the Seller.

     (f)  Amendment; Waiver. This Agreement may be amended, supplemented or
          otherwise modified only by a written instrument executed by the
          parties hereto. No waiver by any party of any of the provisions hereof
          shall be effective unless explicitly set forth in writing and executed
          by the party so waiving. The waiver by any party hereto of a breach of
          any provision of this Agreement shall not operate or be construed as a
          waiver of any subsequent breach.

     (g)  Section Headings. The section headings contained in this Agreement are
          for reference purposes only and shall not affect the meaning or
          interpretation of this Agreement.

     (h)  Severability. If any provision of this Agreement shall be declared by
          any court of competent jurisdiction to be illegal, void or
          unenforceable, all other provisions of this Agreement shall not be
          affected and shall remain in full force and effect.


                                       8

<PAGE>

     (i)  Counterparts. This Agreement may be executed in any number of
          counterparts, each of which shall be deemed to be an original and all
          of which together shall be deemed to be one and the same instrument.

     (j)  Applicable Law. This Agreement shall be governed by, and construed in
          accordance with, the laws of the State of New York, U.S.A., without
          regard to principles of conflicts of law which would refer the matter
          to the laws of another jurisdiction.

     (k)  Dispute Resolution. Any dispute, difference or question between Buyer
          and Seller with regard to this Agreement shall be resolved in
          accordance with the dispute resolution procedures set forth in Section
          8.12 of the Stock Purchase Agreement of even date herewith between
          Buyer and Ocean Power Technologies, Inc.

     (l)  Public Announcements. Except as may be required by applicable law,
          neither Buyer nor Seller shall issue any press release or otherwise
          make any public statements with respect to this Agreement or the
          transactions contemplated hereby without the prior written consent of
          the other party.


                                       9

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first above written.

                                        SELLER:

                                        OCEAN POWER TECHNOLOGIES, INC.


                                        By: /s/ Charles F. Dunleavy
                                            ------------------------------------
                                        Name: Charles F. Dunleavy
                                        Title: Vice President, Finance and
                                               Administration


                                        BUYER:

                                        WOODSIDE SUSTAINABLE ENERGY
                                        SOLUTIONS PTY. LTD.
                                        (ACN 094 813 715)


                                        By: /s/ Trevor Wilson
                                            ------------------------------------
                                        Name: Trevor Wilson
                                        Title: General Manager Woodside USA


                                       10

<PAGE>

                         Exhibit 1 - Form of Assignment


                                       11

<PAGE>

                                     FORM OF
                                   ASSIGNMENT

     THIS ASSIGNMENT (this "Assignment") dated the ____ day of , 20 , is
executed by OCEAN POWER TECHNOLOGIES, INC. a New Jersey corporation[ if
assignment is by an Affiliate replace Ocean Power Technologies with name of
Affiliate](referred to herein as "Seller"), in favor of WOODSIDE SUSTAINABLE
ENERGY SOLUTIONS PTY. LTD. (ACN 094 813 715), a company organized under the laws
of Australia ("Buyer").

                                   WITNESETH:

     WHEREAS, pursuant to an Option Agreement for Purchase of Emissions Credits
dated as of November , 2000, by and between Buyer and Seller (the "Option
Agreement"), Seller agreed to transfer to Buyer, upon exercise by Buyer of the
option therein granted, certain Emissions Credits owned by Seller in connection
with its business; and

     WHEREAS, pursuant to the Option Agreement, Buyer has exercised its option
to purchase certain Emissions Credits owned by Seller; and

     WHEREAS, this Assignment is executed in order to evidence the transfer by
Seller to Buyer of legal and beneficial title to the Emissions Credits called by
Buyer pursuant to the Option Agreement (capitalized terms not defined herein
being used as defined in the Option Agreement).

     NOW, THEREFORE, in consideration of the premises, mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. CONVEYANCE.

     Seller does hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER, SET OVER
and DELIVER unto Buyer, its successors and assigns, effective as of the date
hereof, the following Emissions Credits:

                                    [to come]

     TO HAVE AND TO HOLD the Emissions Credits, together with all and singular
the rights and appurtenances thereto in anywise belonging, unto Buyer, its
successors, assigns and legal representatives forever.

2. REPRESENTATIONS AND WARRANTIES BY SELLER.

     Seller hereby represents and warrants to Buyer, as follows:

     (a) Authority. Seller has all necessary corporate power and authority to
     execute and deliver this Assignment, to effect the transfer of title
     intended hereby, and to perform all terms and conditions hereof to be
     performed by it. The execution, delivery and performance of this Assignment
     have been duly authorized by all necessary corporate


                                       1

<PAGE>

     action, including without limitation by all necessary action of the board
     of directors (or similar body) of Seller, and no other corporate
     proceedings are necessary with respect thereto.

     (b) Validity of Agreement. This Assignment has been duly executed and
     delivered by a duly authorized officer of Seller and constitutes a legal,
     valid and binding obligation of Seller, enforceable against Seller in
     accordance with its terms, except as the same may be limited by bankruptcy,
     insolvency or other similar laws affecting creditors' rights generally and
     by general equity principles.

     (c) Ownership of Emissions Credits. Seller is the legal and beneficial
     owner of, and has good and marketable title to, the Emissions Credits, free
     and clear of all liens, pledges, securities interests, encumbrances,
     restrictions, reservations, covenants and adverse claims.

     (d) No Conflicts, Consents or Approvals. Neither the execution and delivery
     of this Assignment by Seller, nor the transfer of legal and beneficial
     ownership of the Emissions Credits from Seller to Buyer hereunder, will (i)
     conflict with or violate (A) the organizational documents of Seller, or (B)
     any federal, state, local or foreign law, rule, regulation, ordinance,
     code, order, judgment, decree or any other requirement of law applicable to
     Seller, (ii) require any consent, approval, authorization or permit of, or
     filing with or notification to, any third party, other than those obtained
     as set forth in Section 2(f).

     (e) Approvals of Governmental Agencies or Other Authority. Seller has
     obtained all approvals of all international and national regulatory
     agencies or treaty organizations necessary to transfer the Emissions
     Credits (as addressed in the Applicable Laws of the Destination Convention
     Party) to the national registry account (or equivalent mechanism
     established under Applicable Laws of the Destination Convention Party) of
     Buyer.

3. FURTHER ACTIONS.

     Seller hereto agrees, without further consideration, to execute and deliver
any and all certificates, instruments, assignments or agreements, and to take
and do any and all other actions, as may be reasonably requested by Buyer in
order to fulfill the conditions, consummate and make effective the transactions
contemplated by this Assignment, including without limitation such actions as
will vest, perfect or confirm of record or otherwise in Buyer or its designee
all right, title and interest in and to all Emissions Credits intended to be
conveyed to Buyer hereby.

4. INDEMNITY, LIMITATION ON DAMAGES

     Seller hereby agrees to indemnify and hold Buyer harmless from and against
any and all losses, claims, damages, liabilities, deficiencies, delinquencies,
defaults, assessments, fees, penalties or related costs or expenses, including,
but not limited to, court costs, reasonable attorneys' and accountants' fees and
disbursements (collectively referred to herein as "Claims") incurred by Buyer in
defense of claims by third parties in connection with or arising out of Seller's
breach of its obligations under this Agreement, but reduced by any amount paid
to Buyer on account of such loss by any insurance policies which Buyer may have
available. The


                                       2

<PAGE>

foregoing indemnity obligation shall expire and terminate with respect to all
Claims except for those Claims for which Seller shall have received written
notice requesting indemnity prior to the expiration of two (2) years following
termination of the Option Term. Under no circumstances shall Seller's and its
Affiliates total liability under this Agreement exceed the amount paid by Buyer
to Seller under this Agreement. In addition, under no circumstances shall Seller
, its Affiliates, or their respective officers, directors, employees or agents
be liable for special, consequential, punitive, exemplary, indirect or
incidental damages (in tort, contract, or otherwise) under or with respect to
this Agreement or for any failure of performance by Seller or its Affiliates
however caused.

5. HEADINGS.

     The title headings contained in this Assignment are inserted for
convenience only and shall not be deemed a part of this Assignment or considered
in construing this Assignment.

6. GOVERNING LAW.

     This Assignment shall be governed by, and construed in accordance with, the
laws of the State of New York, U.S.A., without regard to the choice of law
principles thereof.


                                       3

<PAGE>

     IN WITNESS WHEREOF, Seller has caused this instrument to be executed by its
duly authorized officers as of the date set forth above.

SELLER:
OCEAN POWER TECHNOLOGIES, INC.


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       -----------------------------

THE STATE OF __________ Section
                        Section
COUNTY OF _____________ Section

     This instrument was acknowledged before me on the ____ day of _______,
20__,____________ , _______________ of Ocean Power Technologies, Inc., a New
Jersey corporation, on behalf of said corporation.

               BUYER:
               WOODSIDE SUSTAINABLE ENERGY SOLUTIONS PTY. LTD.
               (ACN 094 813 715)

          By:
              -------------------------------
          Name:
                -----------------------------
          Title:
                -----------------------------

THE STATE OF __________ Section

     This instrument was acknowledged before me on the ____ day of _______,
20__, ____________ , _______________ of Woodside Sustainable Energy Solutions
Pty. Ltd., a company organised under the laws of Australia, on behalf of said
company.


                                       4