Exhibit
4.1


 


YA GLOBAL
INVESTMENTS, L.P.


101 Hudson Street,
Suite 3700


Jersey City, NJ
07302


 


August 30, 2007


 


Open
Energy Corporation


514
Via De La Valle


Suite
200


Solana
Beach, California  92075


Attention:          David
Saltman


 


Re:       Open Energy Corporation—Registration of Common Stock


 


Dear
Mr. Saltman:


 


Within five (5) business days after Open Energy
Corporation (“OEGY”) files its Annual Report on Form 10-KSB and is able
to acquire the necessary expert consents, we hereby request that, and OEGY hereby
agrees to, register up to 4,000,000 shares of common stock, par value $0.001,
of OEGY (the “Shares”) held by YA Global Investments, L.P. (f/k/a
Cornell Capital Partners, L.P.) (“YA Global”) pursuant to Rule 462(b) of
the 1933 Securities Act, as amended (the “New Registration Statement”). The
New Registration Statement shall register the Shares for resale by YA Global
and incorporate the contents of OEGY’s registration statement on Form SB-2
(File No. 333-136987) that was declared effective on October 25, 2006 (the “Initial
Registration Statement”). Notwithstanding the foregoing, the New
Registration Statement shall only register additional shares of OEGY’s common
stock in an amount and at a price that together represent no more that 20% of
the shares originally subject to the Initial Registration Statement that remain
unsold as of the date of the New Registration Statement. YA Global and OEGY
hereby acknowledge that the Indemnification provisions of the registration
rights agreement between the parties dated March 30, 2006 apply to the Shares
included in the New Registration Statement.


 


This
letter shall confirm that we will not request further registration of OEGY
shares of common stock held by us until at least 90 days after the effective
date of the New Registration Statement.


 


Similarly, this letter shall also confirm that we
hereby waive our right of first negotiation under Section 4(n) of the
Securities Purchase Agreement, dated March 30, 2006 (the “2006 SPA”) and
Section 4(m) of the Securities Purchase Agreement, dated March 30, 2007 (the “2007
SPA”) on a one time basis and solely with respect to the “Capital Raising
Offer” letter from the OEGY to us, dated August 6, 2007 and the up to $1,000,000
unsecured note and warrant bridge financing that OEGY is contemplating with
several investors, including, among others, Everest Asset Management (the “Bridge
Financing”), provided the terms of each transaction are not materially
changed from those provided to us. We also hereby provide our consent, as
required by Section 4(k) of both the 2006 SPA and 2007 SPA to complete either
transaction proposed in the “Capital Raising Offer” letter or the Bridge
Financing.


 


We hereby consent to OEGY increasing the number of
shares allocated to its stock option plan by 8,000,000 for a total of
16,500,000. As consideration for this consent, OEGY agrees that, so long as any
obligation under the Secured
Convertible Debenture, dated March 31, 2006 (the “2006 Debenture”), or
the Secured Convertible Debenture, dated March 29, 2007 (the “2007 Debenture”)
is outstanding, grants of options in
excess of 8,500,000 shares to purchase OEGY securities pursuant to OEGY’s
existing


 

















 


option plan shall not vest sooner than two
(2) years from the date hereof. In addition, this letter shall confirm
that neither the 2006 Debenture nor the 2007 Debenture is currently in default.


 


OEGY represents and confirms to YA Global that the
amounts owed, together with interest accrued and accruing thereon, and any
applicable redemption premiums now or hereafter payable by OEGY to YA Global
under the 2006 SPA, the 2007 SPA, the secured convertible debentures issued
thereunder, and all documents and agreements entered into in connection
therewith, including without limitation, all outstanding principal, accrued
interest, redemption premiums, costs, expenses, and fees are unconditionally
owing by OEGY to YA Global, without offset, setoff, defense or counterclaim of
any kind, nature or description whatsoever.


 


OEGY does hereby acknowledges that as of the date
hereof it has no causes of action or claims arising from or relating any
agreement between OEGY and YA Global entered into prior to the date hereof.


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]


 


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If
you have any questions or comments, please do not hesitate to contact me. If
you do not have any further comments, please sign below stating that OEGY
acknowledges and agrees to the terms set forth in this letter.


 


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  YA
  Global Investments, L.P. (f/k/a Cornell Capital

  Partners, L.P.)

  
	
   

  	
  By:
  Yorkville Advisors, LLC,

  
	
   

  	
  Its:
  Investment Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Mark A. Angelo

  	
   

  
	
   

  	
  Mark
  A. Angelo

  
	
   

  	
  Managing
  Member

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Signature Page to Open Energy Corporation Side
  Letter]

  	
   

  
	
  This
  letter may be signed in one or more counterparts.

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED:

  	
   

  
	
   

  	
   

  
	
  OPEN
  ENERGY CORPORATION

  	
   

  
	
   

  	
   

  
	
  /s/ David Saltman

  	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  David Saltman

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
  August 30, 2007

  	
   

  	
   

  
							



 


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