Ocean Power Corp.(fka PWREQ)

[Blue54]

In October of 2006, the Company signed a term sheet, subsequently amended on
September 18, 2007, with Trinad Capital Master Fund Ltd. (the "Plan Sponsor") to
sponsor a Chapter 11 plan of reorganization, which was filed with the Bankruptcy
Court on January 15, 2008 ("Plan"). The Plan identifies NorthStar Systems
International, Inc. as a potential merger candidate to be merged into the
Company ("Merger Candidate"). Under the terms of the proposed Plan, the Plan
Sponsor would pay $500,000 to the Company's estate, and creditors of the Company
would receive a pro rata cash payment and stock consideration in the newly
merged entity. The aforementioned consideration would be distributed to
unsecured creditors of the Company under the proposed Plan. If the existing
unsecured creditors of the Company approve the Plan, the creditors and the
existing stockholders of the Company would own approximately 6% and 1%,
respectively, of the merged company; provided, however, that in the event that
the unsecured creditors vote as a class to reject the Plan and the Plan is
confirmed under the cram-down provisions of Section 1129(b) of the Code, the
creditors and the existing stockholders of the Company would own approximately
4% and 0%, respectively, of the merged company. The merger contemplated by the
Plan would be subject to various closing conditions including, without
limitation, (i) confirmation of the Plan, (ii) the negotiation and execution of
definitive documents in form acceptable to the Plan Sponsor and the Merger
Candidate, (iii) the satisfactory completion of the Plan Sponsor's due diligence
on the Merger Candidate, and (iv) the absence of any material adverse change in
the business of the Merger Candidate. The merger would be consummated pursuant
to a merger agreement, which would contain, among other things, detailed and
appropriate representations and warranties, affirmative and negative covenants
and closing conditions customary for transactions of that type. The Plan Sponsor
may withdraw at any time prior to the confirmation of the Plan and gives no
assurance that agreement will be reached with the Merger Candidate with respect
to the terms of such merger agreement.