Document:

EXHIBIT
4.4

WARRANT

THE SECURITIES
REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS
OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THIS WARRANT
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT.

OPEN ENERGY CORPORATION

Warrant To Purchase
Common Stock

Warrant No.: OEGY-2-1                                                                       Number
of Shares:                               6,000,000

                                                                                                                Warrant
Exercise Price:                       $0.50

                                                                                                                Expiration
Date:                    March
29, 2012

Date of Issuance: March 29, 2007

Open Energy Corporation, a Nevada corporation (the “Company”),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Cornell
Capital Partners, LP (the “Holder”), the registered holder
hereof or its permitted assigns, is entitled, subject to the terms set forth
below, to purchase from the Company upon surrender of this Warrant, at any time
or times on or after the date hereof, but not after 11:59 P.M. Eastern
Time on the Expiration Date (as defined herein) up to Six Million (6,000,000)
fully paid and nonassessable shares of Common Stock (as defined herein) of the
Company (the “Warrant Shares”) at the exercise price per share provided
in Section 1(b) below or as subsequently adjusted; provided, however, that
in no event shall the holder be entitled to exercise this Warrant for a number
of Warrant Shares in excess of that number of Warrant Shares which, upon giving
effect to such exercise, would cause the aggregate number of shares of Common
Stock beneficially owned by the holder and its affiliates to exceed 4.99% of
the outstanding shares of the Common Stock following such exercise, except
within sixty (60) days of the Expiration Date (however, such restriction may be
waived by Holder (but only as to itself and not to any other holder) upon not
less than 65 days prior notice to the Company). 
For purposes of the foregoing proviso, the aggregate number of shares of
Common Stock beneficially owned by the holder and its affiliates shall include
the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such proviso is being made, but
shall exclude shares of Common Stock which would be issuable upon
(i) exercise of the remaining, unexercised Warrants beneficially owned by
the holder and its 

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affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
beneficially owned by the holder and its affiliates (including, without
limitation, any convertible notes or preferred stock) subject to a limitation
on conversion or exercise analogous to the limitation contained herein.  Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended.  For purposes of this
Warrant, in determining the number of outstanding shares of Common Stock a
holder may rely on the number of outstanding shares of Common Stock as reflected
in (1) the Company’s most recent Form 10-QSB or Form 10-KSB, as the case may
be, (2) a more recent public announcement by the Company or (3) any other
notice by the Company or its transfer agent setting forth the number of shares
of Common Stock outstanding.  Upon the
written request of any holder, the Company shall promptly, but in no event
later than one (1) Business Day following the receipt of such notice, confirm
in writing to any such holder the number of shares of Common Stock then
outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the exercise of Warrants (as defined below) by such holder and its affiliates
since the date as of which such number of outstanding shares of Common Stock
was reported.

Section 1.

(a)   This Warrant is one of the warrants issued
pursuant to of the Securities Purchase Agreement (“Securities Purchase
Agreement”) dated the date hereof between the Company and the Buyers listed
on Schedule I thereto or issued in exchange or substitution thereafter or
replacement thereof.  Each Capitalized
term used, and not otherwise defined herein, shall have the meaning ascribed
thereto in the Securities Purchase Agreement.

(b)   Definitions.  The following words and terms as used in this
Warrant shall have the following meanings:

(i)            “Approved Stock Plan” means a
stock option plan that has been approved by the Board of Directors of the
Company prior to the date of the Securities Purchase Agreement, pursuant to
which the Company’s securities may be issued only to any employee, officer or
director for services provided to the Company.

(ii)            “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in the City
of New York are authorized or required by law to remain closed.

(iii)          “Closing Bid Price” means the
closing bid price of Common Stock as quoted on the Principal Market (as
reported by Bloomberg Financial Markets (“Bloomberg”) through its “Volume
at Price” function).

(iv)          “Common Stock” means
(i) the Company’s common stock, par value $0.001 per share, and
(ii) any capital stock into which such Common Stock shall have been
changed or any capital stock resulting from a reclassification of such Common
Stock.

(v)           “Event of Default” means an
event of default under the Securities Purchase Agreement or the Convertible
Debentures issued in connection therewith.

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(vi)          “Excluded Securities” means,
(a) shares issued or deemed to have been issued by the Company pursuant to an
Approved Stock Plan, (b) shares of Common Stock issued or deemed to be issued
by the Company upon the conversion, exchange or exercise of any right, option,
obligation or security outstanding on the date prior to date of the Securities
Purchase Agreement, provided that the terms of such right, option, obligation
or security are not amended or otherwise modified on or after the date of the
Securities Purchase Agreement, and provided that the conversion price, exchange
price, exercise price or other purchase price is not reduced, adjusted or
otherwise modified and the number of shares of Common Stock issued or issuable
is not increased (whether by operation of, or in accordance with, the relevant
governing documents or otherwise) on or after the date of the Securities
Purchase Agreement,  and (c) the
shares of Common Stock issued or deemed to be issued by the Company upon
conversion of the Convertible Debentures or exercise of the Warrants.

(vii)         “Expiration Date” means March
29, 2012.

(viii)        “Issuance Date” means the date
hereof.

(ix)           “Options” means any rights,
warrants or options to subscribe for or purchase Common Stock or Convertible
Securities.

(x)             “Person” means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any department
or agency thereof.

(xi)           “Primary Market” means on any
of (a) the American Stock Exchange, (b) New York Stock Exchange, (c) the Nasdaq
Global Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin
Board (“OTCBB”)

(xii)          “Securities Act” means the
Securities Act of 1933, as amended.

(xiii)         “Warrant” means this Warrant and
all Warrants issued in exchange, transfer or replacement thereof.

(xiv)        “Warrant Exercise Price” shall be
$0.50 or as subsequently adjusted as provided in Section 8 hereof.

(c)   Other Definitional Provisions.

(i)            Except as otherwise specified
herein, all references herein (A) to the Company shall be deemed to
include the Company’s successors and (B) to any applicable law defined or
referred to herein shall be deemed references to such applicable law as the
same may have been or may be amended or supplemented from time to time.

(ii)           When used in this Warrant, the words “herein”,
“hereof”, and “hereunder”
and words of similar import, shall refer to this Warrant as a whole and not to
any provision of this Warrant, and the words “Section”, “Schedule”,
and “Exhibit” shall refer to Sections of, and Schedules and Exhibits to,
this Warrant unless otherwise specified.

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(iii)          Whenever the context so requires, the
neuter gender includes the masculine or feminine, and the singular number
includes the plural, and vice versa.

Section 2.               Exercise of Warrant.

(a)   Subject to the terms and conditions hereof,
this Warrant may be exercised by the holder hereof then registered on the books
of the Company, pro rata as hereinafter provided, at any time on any Business
Day on or after the opening of business on such Business Day, commencing with
the first day after the date hereof, and prior to 11:59 P.M. Eastern Time
on the Expiration Date (i) by delivery of a written notice, in the form of the
subscription notice attached as Exhibit A hereto (the “Exercise
Notice”), of such holder’s election to exercise this Warrant, which notice
shall specify the number of Warrant Shares to be purchased, payment to the
Company of an amount equal to the Warrant Exercise Price(s) applicable to the
Warrant Shares being purchased, multiplied by the number of Warrant
Shares (at the applicable Warrant Exercise Price) as to which this Warrant
is being exercised (plus any applicable issue or transfer taxes) (the “Aggregate
Exercise Price”) in cash or wire transfer of immediately available funds
and the surrender of this Warrant (or an indemnification undertaking with
respect to this Warrant in the case of its loss, theft or destruction) to a
common carrier for overnight delivery to the Company as soon as practicable
following such date (“Cash Basis”) or (ii) if at the time of exercise,
the Warrant Shares are not subject to an effective registration statement or if
an Event of Default has occurred, by delivering an Exercise Notice and in lieu
of making payment of the Aggregate Exercise Price in cash or wire transfer,
elect instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (the “Cashless
Exercise”):

	
  Net Number =

  	
  (A x B) — (A x C)

  	
   

  
	
   

  	
  B

  	
   

  

For purposes of the
foregoing formula:

A = the total number of
Warrant Shares with respect to which this Warrant is then being exercised.

B = the Closing Bid Price
of the Common Stock on the date of exercise of the Warrant.

C = the Warrant Exercise
Price then in effect for the applicable Warrant Shares at the time of such
exercise.

In the event
of any exercise of the rights represented by this Warrant in compliance with
this Section 2, the Company shall on or before the fifth (5th) Business
Day following the date of receipt of the Exercise Notice, the Aggregate
Exercise Price and this Warrant (or an indemnification undertaking with respect
to this Warrant in the case of its loss, theft or destruction) and the receipt
of the representations of the holder specified in Section 6 hereof, if
requested by the Company (the “Exercise Delivery Documents”), and if the
Common Stock is DTC eligible, credit such aggregate number of shares of Common
Stock to which the holder shall be entitled to the holder’s or its designee’s
balance account with The Depository Trust 

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Company; provided, however, if the holder who
submitted the Exercise Notice requested physical delivery of any or all of the
Warrant Shares, or, if the Common Stock is not DTC eligible  then the Company shall, on or before the
fifth (5th)
Business Day following receipt of the Exercise Delivery Documents, issue and
surrender to a common carrier for overnight delivery to the address specified
in the Exercise Notice, a certificate, registered in the name of the holder,
for the number of shares of Common Stock to which the holder shall be entitled
pursuant to such request.  Upon delivery
of the Exercise Notice and Aggregate Exercise Price referred to in
clause (i) or (ii) above the holder of this Warrant shall be deemed for
all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised.  In the case of a dispute as to the
determination of the Warrant Exercise Price, the Closing Bid Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the holder the number of Warrant Shares that is not disputed and shall
submit the disputed determinations or arithmetic calculations to the holder via
facsimile within one (1) Business Day of receipt of the holder’s Exercise
Notice.

(b)   If the holder and the Company are unable to
agree upon the determination of the Warrant Exercise Price or arithmetic
calculation of the Warrant Shares within one (1) day of such disputed
determination or arithmetic calculation being submitted to the holder, then the
Company shall immediately submit via facsimile (i) the disputed determination
of the Warrant Exercise Price or the Closing Bid Price to an independent,
reputable investment banking firm or (ii) the disputed arithmetic calculation
of the Warrant Shares to its independent, outside accountant.  The Company shall cause the investment
banking firm or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the holder of the
results no later than forty-eight (48) hours from the time it receives the
disputed determinations or calculations. 
Such investment banking firm’s or accountant’s determination or
calculation, as the case may be, shall be deemed conclusive absent manifest
error.

(c)   Unless the rights represented by this Warrant
shall have expired or shall have been fully exercised, the Company shall, as
soon as practicable and in no event later than five (5) Business Days after any
exercise and at its own expense, issue a new Warrant identical in all respects
to this Warrant exercised except it shall represent rights to purchase the
number of Warrant Shares purchasable immediately prior to such exercise under
this Warrant exercised, less the number of Warrant Shares with respect to which
such Warrant is exercised.

(d)   No fractional Warrant Shares are to be issued
upon any pro rata exercise of this Warrant, but rather the number of Warrant
Shares issued upon such exercise of this Warrant shall be rounded up or down to
the nearest whole number.

(e)   If the Company or its Transfer Agent shall
fail for any reason or for no reason to issue to the holder within
ten (10) days of receipt of the Exercise Delivery Documents, a certificate
for the number of Warrant Shares to which the holder is entitled or to credit
the holder’s balance account with The Depository Trust Company for such number
of Warrant Shares to which the holder is entitled upon the holder’s exercise of
this Warrant, the Company shall, in addition to any other remedies under this
Warrant or otherwise available to such holder, pay as additional damages in
cash to such holder on each day the issuance of such certificate for Warrant
Shares is not timely effected an amount equal to 0.025% of the product of (A)
the sum of the number of Warrant Shares not issued to the holder on a timely
basis and to which the 

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holder is entitled, and (B) the
Closing Bid Price of the Common Stock for the trading day immediately preceding
the last possible date which the Company could have issued such Common Stock to
the holder without violating this Section 2.

(f)    If within ten (10) days after the Company’s
receipt of the Exercise Delivery Documents, the Company fails to deliver a new
Warrant to the holder for the number of Warrant Shares to which such holder is
entitled pursuant to Section 2 hereof, then, in addition to any other available
remedies under this Warrant, or otherwise available to such holder, the Company
shall pay as additional damages in cash to such holder on each day after such
tenth (10th)
day that such delivery of such new Warrant is not timely effected in an amount
equal to 0.25% of the product of (A) the number of Warrant Shares
represented by the portion of this Warrant which is not being exercised and
(B) the Closing Bid Price of the Common Stock for the trading day
immediately preceding the last possible date which the Company could have
issued such Warrant to the holder without violating this Section 2.

Section 3.               Covenants as to Common Stock.  The Company hereby covenants and agrees as
follows:

(a)   This Warrant is, and any Warrants issued in
substitution for or replacement of this Warrant will upon issuance be, duly
authorized and validly issued.

(b)   All Warrant Shares which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof.

(c)   During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times
have authorized and reserved at least one hundred percent (100%) of the number
of shares of Common Stock needed to provide for the exercise of the rights then
represented by this Warrant and the par value of said shares will at all times
be less than or equal to the applicable Warrant Exercise Price.  If at any time the Company does not have a
sufficient number of shares of Common Stock authorized and available, then the
Company shall call and hold a special meeting of its stockholders within
sixty (60) days of that time for the sole purpose of increasing the number
of authorized shares of Common Stock.

(d)   If at any time after the date hereof the
Company shall file a registration statement, the Company shall, at the Holder’s
option, include the Warrant Shares issuable to the holder, pursuant to the
terms of this Warrant.  The Company shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all Warrant Shares from time to time issuable upon the exercise of
this Warrant; and the Company shall so list on each national securities exchange
or automated quotation system, as the case may be, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon the
exercise of this Warrant if and so long as any shares of the same class shall
be listed on such national securities exchange or automated quotation system.

(e)   The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of 

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any of the terms to be observed
or performed by it hereunder, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all
such action as may reasonably be requested by the holder of this Warrant in
order to protect the exercise privilege of the holder of this Warrant against
dilution or other impairment, consistent with the tenor and purpose of this
Warrant.  The Company will not increase
the par value of any shares of Common Stock receivable upon the exercise of
this Warrant above the Warrant Exercise Price then in effect, and
(ii) will take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

(f)    This Warrant will be binding upon any entity
succeeding to the Company by merger, consolidation or acquisition of all or
substantially all of the Company’s assets.

Section 4.               Taxes.  The Company shall pay any and all taxes,
except any applicable withholding, which may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant.

Section 5.               Warrant Holder Not Deemed a
Stockholder.  Except as otherwise
specifically provided herein, no holder, as such, of this Warrant shall be
entitled to vote or receive dividends or be deemed the holder of shares of
capital stock of the Company for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the holder of this Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of
this Warrant.  In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on
such holder to purchase any securities (upon exercise of this Warrant or
otherwise) or as a stockholder of the Company, whether such liabilities are
asserted by the Company or by creditors of the Company.  Notwithstanding this Section 5, the Company
will provide the holder of this Warrant with copies of the same notices and
other information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.

Section 6.               Representations of Holder.  The holder of this Warrant, by the acceptance
hereof, represents that it is acquiring this Warrant and the Warrant Shares for
its own account for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution of this Warrant or the
Warrant Shares, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, the holder
does not agree to hold this Warrant or any of the Warrant Shares for any
minimum or other specific term and reserves the right to dispose of this
Warrant and the Warrant Shares at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act.  The holder of this Warrant further
represents, by acceptance hereof, that, as of this date, such holder is an “accredited
investor” as such term is defined in Rule 501(a)(1) of Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act
(an “Accredited Investor”).  Upon
exercise of this Warrant  the holder
shall, if requested by the Company, confirm in writing, in a form satisfactory
to the Company, that the 

 7
 

Warrant Shares so purchased are being
acquired solely for the holder’s own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale and
that such holder is an Accredited Investor. 
If such holder cannot make such representations because they would be
factually incorrect, it shall be a condition to such holder’s exercise of this
Warrant that the Company receive such other representations as the Company
considers reasonably necessary to assure the Company that the issuance of its
securities upon exercise of this Warrant shall not violate any United States or
state securities laws.

Section 7.               Ownership and Transfer.

(a)   The Company shall maintain at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in
which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each
transferee.  The Company may treat the
person in whose name any Warrant is registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary,
but in all events recognizing any transfers made in accordance with the terms
of this Warrant.

Section 8.               Adjustment of Warrant Exercise
Price and Number of Shares.  The
Warrant Exercise Price and the number of shares of Common Stock issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:

(a)   Adjustment of Warrant Exercise Price and
Number of Shares upon Issuance of Common Stock.  If and whenever on or after the Issuance Date
of this Warrant, the Company issues or sells, or is deemed to have issued or
sold, any shares of Common Stock (other than Excluded Securities) for a
consideration per share less than a price (the “Applicable Price”) equal
to the Warrant Exercise Price in effect immediately prior to such issuance or
sale, then immediately after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such consideration per share;
provided that, in no event shall the Warrant Exercise Price be reduced to less
that $.05 per share (pursuant to this Section 8(a).  Upon each such adjustment of the Warrant
Exercise Price hereunder, the number of Warrant Shares issuable upon exercise
of this Warrant shall be adjusted to the number of shares determined by multiplying
the Warrant Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such adjustment and dividing the product thereof by the Warrant
Exercise Price resulting from such adjustment.

(b)   Effect on Warrant Exercise Price of
Certain Events.  For purposes of
determining the adjusted Warrant Exercise Price under Section 8(a) above, the
following shall be applicable:

(i)            Issuance of Options.  If after the date hereof, the Company in any
manner grants any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange of any convertible securities issuable upon exercise of
any such Option is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per 

 8
 

share.  For purposes of this Section 8(b)(i), the
lowest price per share for which one share of Common Stock is issuable upon
exercise of such Options or upon conversion or exchange of such Convertible
Securities shall be equal to the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one share of
Common Stock upon the granting or sale of the Option, upon exercise of the
Option or upon conversion or exchange of any convertible security issuable upon
exercise of such Option.  No further
adjustment of the Warrant Exercise Price shall be made upon the actual issuance
of such Common Stock or of such convertible securities upon the exercise of
such Options or upon the actual issuance of such Common Stock upon conversion
or exchange of such convertible securities.

(ii)           Issuance of Convertible Securities.  If the Company in any manner issues or sells
any convertible securities and the lowest price per share for which one share
of Common Stock is issuable upon the conversion or exchange thereof is less
than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such convertible securities for such price per
share.  For the purposes of this
Section 8(b)(ii), the lowest price per share for which one share of Common
Stock is issuable upon such conversion or exchange shall be equal to the sum of
the lowest amounts of consideration (if any) received or receivable by the
Company with respect to one share of Common Stock upon the issuance or sale of
the convertible security and upon conversion or exchange of such convertible
security.  No further adjustment of the
Warrant Exercise Price shall be made upon the actual issuance of such Common
Stock upon conversion or exchange of such convertible securities, and if any
such issue or sale of such convertible securities is made upon exercise of any
Options for which adjustment of the Warrant Exercise Price had been or are to
be made pursuant to other provisions of this Section 8(b), no further
adjustment of the Warrant Exercise Price shall be made by reason of such issue
or sale.

(iii)          Change in Option Price or Rate of
Conversion.  If the purchase price
provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion or exchange of any convertible securities, or the rate at
which any convertible securities are convertible into or exchangeable for
Common Stock changes at any time, the Warrant Exercise Price in effect at the
time of such change shall be adjusted to the Warrant Exercise Price which would
have been in effect at such time had such Options or convertible securities
provided for such changed purchase price, additional consideration or changed
conversion rate, as the case may be, at the time initially granted, issued or
sold and the number of Warrant Shares issuable upon exercise of this Warrant
shall be correspondingly readjusted.  For
purposes of this Section 8(b)(iii), if the terms of any Option or convertible
security that was outstanding as of the Issuance Date of this Warrant are
changed in the manner described in the immediately preceding sentence, then
such Option or convertible security and the Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such change.  No
adjustment pursuant to this Section 8(b) shall be made if such adjustment
would result in an increase of the Warrant Exercise Price then in effect.

(iv)          Calculation of Consideration Received.  If any Common Stock, Options or convertible
securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefore will be deemed to be the net amount
received by the 

 9
 

Company therefore.  If any Common Stock, Options or convertible
securities are issued or sold for a consideration other than cash, the amount
of such consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the market price of such securities on the date of receipt of such
securities.  If any Common Stock, Options
or convertible securities are issued to the owners of the non-surviving entity
in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefore will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is attributable
to such Common Stock, Options or convertible securities, as the case may
be.  The fair value of any consideration
other than cash or securities will be determined jointly by the Company and the
holders of Warrants representing at least two-thirds (b) of the Warrant Shares
issuable upon exercise of the Warrants then outstanding.  If such parties are unable to reach agreement
within ten (10) days after the occurrence of an event requiring valuation
(the “Valuation Event”), the fair value of such consideration will be
determined within five (5) Business Days after the tenth (10th) day following the Valuation
Event by an independent, reputable appraiser jointly selected by the Company
and the holders of Warrants representing at least two-thirds (b) of the Warrant
Shares issuable upon exercise of the Warrants then outstanding.  The determination of such appraiser shall be
final and binding upon all parties and the fees and expenses of such appraiser
shall be borne jointly by the Company and the holders of Warrants.

(v)           Integrated Transactions.  In case any Option is issued in connection
with the issue or sale of other securities of the Company, together comprising
one integrated transaction in which no specific consideration is allocated to
such Options by the parties thereto, the Options will be deemed to have been
issued for a consideration of $.01.

(vi)          Treasury Shares.  The number of shares of Common Stock
outstanding at any given time does not include shares owned or held by or for
the account of the Company, and the disposition of any shares so owned or held
will be considered an issue or sale of Common Stock.

(vii)         Record Date.  If the Company takes a record of the holders
of Common Stock for the purpose of entitling them (1) to receive a
dividend or other distribution payable in Common Stock, Options or in
convertible securities or (2) to subscribe for or purchase Common Stock,
Options or convertible securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

(c)   Adjustment of Warrant Exercise Price upon
Subdivision or Combination of Common Stock. 
If the Company at any time after the date of issuance of this Warrant
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, any Warrant Exercise Price in effect immediately prior to
such subdivision will be proportionately reduced and the number of shares of
Common Stock obtainable upon exercise of this Warrant will be proportionately
increased.  If the Company at any time
after the date of issuance of this Warrant combines (by combination, reverse
stock split or otherwise) one or more classes of its 

 10
 

outstanding shares of Common
Stock into a smaller number of shares, any Warrant Exercise Price in effect
immediately prior to such combination will be proportionately increased and the
number of Warrant Shares issuable upon exercise of this Warrant will be
proportionately decreased.  Any
adjustment under this Section 8(c) shall become effective at the close of
business on the date the subdivision or combination becomes effective.

(d)   Distribution of Assets.  If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case:

(i)            any Warrant Exercise Price in effect
immediately prior to the close of business on the record date fixed for the
determination of holders of Common Stock entitled  to receive the
Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Warrant Exercise Price
by a fraction of which (A) the numerator shall be the Closing Sale Price of the
Common Stock on the trading day immediately preceding such record date minus
the value of the Distribution (as determined in good faith by the Company’s
Board of Directors) applicable to one share of Common Stock, and (B) the
denominator shall be the Closing Sale Price of the Common Stock on the trading
day immediately preceding such record date; provided that, in no event shall
the Warrant Exercise Price be reduced to less that $.05 per share (pursuant to
this Section 8(d)(i); and

(ii)           either (A) the number of Warrant
Shares obtainable upon exercise of this Warrant shall be increased to a number
of shares equal to the number of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the determination
of holders of Common Stock entitled to receive the Distribution multiplied by
the reciprocal of the fraction set forth in the immediately preceding clause
(i), or (B) in the event that the Distribution is of common stock of a company
whose common stock is traded on a national securities exchange or a national
automated quotation system, then the holder of this Warrant shall receive an
additional warrant to purchase Common Stock, the terms of which shall be
identical to those of this Warrant, except that such warrant shall be
exercisable into the amount of the assets that would have been payable to the
holder of this Warrant pursuant to the Distribution had the holder exercised
this Warrant immediately prior to such record date and with an exercise price
equal to the amount by which the exercise price of this Warrant was decreased
with respect to the Distribution pursuant to the terms of the immediately
preceding clause (i).

(e)   Certain Events.  If any event occurs of the type contemplated
by the provisions of this Section 8 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company’s Board of Directors will make an appropriate adjustment in the Warrant
Exercise Price and the number of shares of Common Stock obtainable upon
exercise of this Warrant so as to protect the rights of the holders of the
Warrants; provided, except as set forth in section 8(c),that no such adjustment
pursuant to this Section 8(e) will increase the Warrant Exercise Price or
decrease the number of shares of Common Stock obtainable as 

 11
 

otherwise determined pursuant
to this Section 8.  Notwithstanding
anything to the contrary in this Section 8(e), (i) the Warrant Exercise Price
shall not be reduced to less that $0.05 per share (except as may be adjusted
pursuant to Section 8(c)), and (ii) the number of Warrant Shares obtainable
upon exercise of this Warrant shall not be adjusted to exceed that number of shares
determined by multiplying the Warrant Exercise Price in effect immediately
prior  to the adjustment pursuant to this
Section 8(e), by the number of Warrant Shares issuable upon exercise of this
Warrant immediately prior to such adjustment and dividing the product thereof
by the Warrant Exercise Price resulting from such adjustment.

(f)    Voluntary Adjustments By Company.  The Company may at any time during the term
of this Warrant reduce the then current Exercise Price to any amount and for
any period of time deemed appropriate by the Board of Directors of the Company.

(g)   Notices.

(i)            Immediately upon any adjustment of
the Warrant Exercise Price, the Company will give written notice thereof to the
holder of this Warrant, setting forth in reasonable detail, and certifying, the
calculation of such adjustment.

(ii)           The Company will give written notice
to the holder of this Warrant at least ten (10) days prior to the date on which
the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the Common Stock, (B) with respect to any
pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Organic Change (as defined
below), dissolution or liquidation, provided that such information shall be
made known to the public prior to or in conjunction with such notice being
provided to such holder.

(iii)          The Company will also give written
notice to the holder of this Warrant at least ten (10) days prior to the date
on which any Organic Change, dissolution or liquidation will take place,
provided that such information shall be made known to the public prior to or in
conjunction with such notice being provided to such holder.

Section 9.               Purchase Rights;
Reorganization, Reclassification, Consolidation, Merger or Sale.

(a)   In addition to any adjustments pursuant to
Section 8 above, if at any time the Company grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock (the “Purchase Rights”), then the holder of this Warrant
will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such holder could have acquired if such
holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is
taken, the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.

(b)   Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of
the Company’s assets to another Person or other transaction in 

 12
 

each case which is effected in
such a way that holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for Common Stock is referred to herein as an “Organic
Change.”  Prior to the consummation
of any (i) sale of all or substantially all of the Company’s assets to an
acquiring Person or (ii) other Organic Change following which the Company is not
a surviving entity, the Company will secure from the Person purchasing such
assets or the successor resulting from such Organic Change (in each case, the “Acquiring
Entity”) a written agreement (in form and substance satisfactory to the
holders of Warrants representing at least two-thirds (iii) of the Warrant
Shares issuable upon exercise of the Warrants then outstanding) to deliver to
each holder of Warrants in exchange for such Warrants, a security of the
Acquiring Entity evidenced by a written instrument substantially similar in
form and substance to this Warrant and satisfactory to the holders of the
Warrants (including an adjusted warrant exercise price equal to the value for
the Common Stock reflected by the terms of such consolidation, merger or sale,
and exercisable for a corresponding number of shares of Common Stock acquirable
and receivable upon exercise of the Warrants without regard to any limitations
on exercise, if the value so reflected is less than any Applicable Warrant
Exercise Price immediately prior to such consolidation, merger or sale).  Prior to the consummation of any other
Organic Change, the Company shall make appropriate provision (in form and
substance satisfactory to the holders of Warrants representing a majority  of the Warrant Shares issuable upon exercise of the
Warrants then outstanding) to insure that each of the holders of the Warrants
will thereafter have the right to acquire and receive in lieu of or in addition
to (as the case may be) the Warrant Shares immediately theretofore issuable and
receivable upon the exercise of such holder’s Warrants (without regard to
any limitations on exercise), such shares of stock, securities or assets that
would have been issued or payable in such Organic Change with respect to or in
exchange for the number of Warrant Shares which would have been issuable and
receivable upon the exercise of such holder’s Warrant as of the date of such
Organic Change (without taking into account any limitations or restrictions on
the exercisability of this Warrant).

Section 10.             Lost, Stolen, Mutilated or
Destroyed Warrant.  If this Warrant
is lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification undertaking (or, in the case of a mutilated Warrant, the
Warrant), issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.

Section 11.             Notice.  Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Warrant must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of receipt is received by the sending party transmission is
mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same.  The addresses
and facsimile numbers for such communications shall be:

 13
 

                

	
  If to Holder:

  	
   

  	
  Cornell Capital Partners, LP

  
	
   

  	
   

  	
  101 Hudson Street — Suite 3700

  
	
   

  	
   

  	
  Jersey City, NJ 07302

  
	
   

  	
   

  	
  Attention:                                         Mark
  A. Angelo

  
	
   

  	
   

  	
  Telephone:                                    (201)
  985-8300

  
	
   

  	
   

  	
  Facsimile:                                            (201)
  985-8266

  
	
   

  	
   

  	
   

  
	
  With Copy to:

  	
   

  	
  David Gonzalez, Esq.

  
	
   

  	
   

  	
  101 Hudson Street — Suite 3700

  
	
   

  	
   

  	
  Jersey City, NJ 07302

  
	
   

  	
   

  	
  Telephone:                                    (201)
  985-8300

  
	
   

  	
   

  	
  Facsimile:                                            (201)
  985-8266

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the
  Company, to:

  	
   

  	
  Open Energy Corporation

  
	
   

  	
   

  	
  514 Via de la Valle, Suite 200

  
	
   

  	
   

  	
  Solana Beach, CA 92075

  
	
   

  	
   

  	
  Attention: David Saltman, Chief Executive Officer

  
	
   

  	
   

  	
  Telephone:                                    858-794-8800

  
	
   

  	
   

  	
  Facsimile:                                            858-794-8811

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Sue J. Hodges, Partner

  
	
   

  	
   

  	
  Pillsbury Winthrop Shaw Pittman LLP

  
	
   

  	
   

  	
  12255 El Camino Real, Suite 300

  
	
   

  	
   

  	
  San Diego, CA 92130

  
	
   

  	
   

  	
  Telephone: 858-509-4003

  
	
   

  	
   

  	
  Facsimile: 858-509-4010

  

If to a holder of this
Warrant, to it at the address and facsimile number set forth on Exhibit C
hereto, with copies to such holder’s representatives as set forth on Exhibit C,
or at such other address and facsimile as shall be delivered to the Company
upon the issuance or transfer of this Warrant. 
Each party shall provide five days’ prior written notice to the other
party of any change in address or facsimile number.  Written confirmation of receipt
(A) given by the recipient of such notice, consent, facsimile, waiver or
other communication, (or (B) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

Section 12.             Date.  The date of this Warrant is set forth on page
1 hereof.  This Warrant, in all
events, shall be wholly void and of no effect after the close of business on
the Expiration Date, except that notwithstanding any other provisions hereof,
the provisions of Section 8(b) shall continue in full force and effect
after such date as to any Warrant Shares or other securities issued upon the
exercise of this Warrant.

 14
 

Section 13.             Amendment and Waiver.  Except as otherwise provided herein, the
provisions of the Warrants may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the holders of
Warrants representing at least two-thirds of the Warrant Shares issuable upon
exercise of the Warrants then outstanding; provided that, except for Section
8(d), no such action may increase the Warrant Exercise Price or decrease the
number of shares or class of stock obtainable upon exercise of any Warrant
without the written consent of the holder of such Warrant.

Section 14.             Descriptive Headings; Governing
Law.  The descriptive headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant.  The corporate laws of the State of Nevada
shall govern all issues concerning the relative rights of the Company and its
stockholders.  All other questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New Jersey,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New Jersey or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of
New Jersey.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting
in Hudson County and the United States District Court for the District of New
Jersey, for the adjudication of any dispute hereunder or in connection herewith
or therewith, or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for
such notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law.

Section
15.            Waiver
of Jury Trial.  AS A
MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.

REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

 15
 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be
signed as of the date first set forth above.

	
  

  	
  OPEN ENERGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Saltman

  
	
   

  	
  Name:

  	
  David Saltman

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  

 

 16

EXHIBIT A TO
WARRANT

EXERCISE NOTICE

TO BE EXECUTED 

BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

OPEN ENERGY CORPORATION

The undersigned holder hereby exercises the right to
purchase                           
of the shares of Common Stock (“Warrant Shares”) of Open Energy
Corporation (the “Company”), evidenced by the attached Warrant (the “Warrant”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

Specify Method of exercise by check mark:

1.    o     Cash Exercise

(a) Payment of Warrant
Exercise Price. The holder shall pay the Aggregate Exercise Price of $                          
to the Company in accordance with the terms of the Warrant.

(b) Delivery of
Warrant Shares.  The Company shall
deliver to the holder                   
Warrant Shares in accordance with the terms of the Warrant.

2.    o     Cashless Exercise

(a) Payment of Warrant
Exercise Price.  In lieu of making
payment of the Aggregate Exercise Price, the holder elects to receive upon such
exercise the Net Number of shares of Common Stock determined in accordance with
the terms of the Warrant.

(b) Delivery of
Warrant Shares.  The Company shall
deliver to the holder                      
Warrant Shares in accordance with the terms of the Warrant.

Date:                                      
    ,             

	
  Name of Registered Holder

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

EXHIBIT B TO WARRANT

FORM OF WARRANT POWER

FOR VALUE RECEIVED,
the undersigned does hereby assign and transfer to                               ,
Federal Identification No.                   ,
a warrant to purchase                        
shares of the capital stock of Open Energy Corporation represented by warrant
certificate no.          ,
standing in the name of the undersigned on the books of said corporation.  The undersigned does hereby irrevocably
constitute and appoint                            ,
attorney to transfer the warrants of said corporation, with full power of
substitution in the premises.

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 B-1EXHIBIT
4.5

REGISTRATION
RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT
(this “Agreement”), dated as of March 29, 2007, by and among OPEN ENERGY CORPORATION, a Nevada
corporation (the “Company”), and the undersigned Buyers listed on
Schedule I attached hereto (each, a “Buyer” and collectively, the “Buyers”).

WHEREAS:

A.            In
connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and subject to
the conditions of the Securities Purchase Agreement, to issue and sell to the
Buyers (i) secured convertible debentures (the “Convertible Debentures”)
which shall be convertible into shares of the Company’s common stock, par value
$0.001 per share (the “Common Stock,” as converted, the “Conversion
Shares”) in accordance with the terms of the Convertible Debentures, and
(ii) warrants (the “Warrants”), which will be exercisable to purchase
shares of Common Stock (as exercised, collectively, the “Warrant Shares”).  Capitalized terms not defined herein shall
have the meaning ascribed to them in the Securities Purchase Agreement.

B.            To
induce the Buyers to execute and deliver the Securities Purchase Agreement, the
Company has agreed to provide certain limited registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder,
or any similar successor statute (collectively, the “Securities Act”),
and applicable state securities laws.

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

1.             DEFINITIONS.

As used in this Agreement, the following terms shall
have the following meanings:

(a)           “Effectiveness
Deadline” means, with respect to the initial Registration Statement
required to be filed hereunder, the 90th calendar day following the date filed
and, with respect to any Subsequent Registration Statements which may be
required pursuant to Section 3(c), the 60th calendar day following the filed;
provided, however, in the event the Company is notified by the U.S. Securities
and Exchange Commission (“SEC”) that one of the above Registration
Statements will not be reviewed or is no longer subject to further review and
comments, the Effectiveness Date as to such Registration Statement shall be the
fifth Trading Day following the date on which the Company is so notified if
such date precedes the dates required above.

(b)           “Event
of Default” shall have the meaning ascribed to it in the Convertible
Debentures.

(c)           “Filing
Deadline” means, with respect to the initial Registration Statement
required hereunder, the 30th calendar day following the date the Company
receives a Filing Notice, and, with respect to any Subsequent Registration
Statements which may be required pursuant to Section 3(c), the 30th day
following the date on which the Company first knows, or reasonably should have
known that it is obligated to file such Subsequent Registration Statement.

(d)           “Filing
Notice” means a written notice from the Buyer to the Company (which may not
be sent prior to the occurrence of an Event of Default) to file a Registration
Statement and stating the number of shares to include on such Registration
Statement.

(e)           “Initial
Required Registration Amount” means such number of shares of Common Stock
issued or to be issued upon conversion of the Convertible Debentures or
exercise of the series Warrants as set forth on a Filing Notice.

(f)            “Person”
means a corporation, a limited liability company, an association, a
partnership, an organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.

(g)           “Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

(h)           “Registrable
Securities” means all of (i) the Conversion Shares issuable upon conversion
of the Convertible Debentures, (ii) the Warrant Shares issued or issuable upon
exercise of the Warrants, (iii) any additional shares issuable in connection
with any anti-dilution provisions in the Warrants or the Convertible Debentures
(without giving effect to any limitations on exercise set forth in the Warrants
or Convertible Debentures) and (iv) any shares of Common Stock issued or
issuable with respect to the Conversion Shares, the Convertible Debentures, the
Warrant Shares, or the Warrants as a result of any stock split, dividend or
other distribution, recapitalization or similar event or otherwise, without
regard to any limitations on the conversion of the Convertible Debentures or
exercise of the Warrants.

(i)            “Registration
Statement” means the registration statements required to be filed hereunder
and any additional registration statements contemplated by Section 3(c),
including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

(j)            “Rule
415” means Rule 415 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC 
having substantially the same purpose and effect as such Rule.

 2
 

2.             REGISTRATION.

(a)           The
obligations of the Company hereunder shall not come into effect unless and
until an Event of Default has occurred. 
At any time after the occurrence of an Event of Default, the Buyer shall
have the right to deliver to the Company a Filing Notice.

(b)           After
receipt of a valid Filing Notice, the Company shall, on or prior to each Filing
Deadline, prepare and file with the SEC a Registration Statement on Form S-1 or
SB-2 (or, if the Company is then eligible, on Form S-3) covering the resale of
all of the Registrable Securities.  The
Registration Statement prepared pursuant hereto shall register for resale at
least the number of shares of Common Stock equal to the Required Registration
Amount as of date the Registration Statement is initially filed with the
SEC.  The Registration Statement shall
contain the “Selling Stockholders” and “Plan of Distribution”
sections in substantially the form attached hereto as Exhibit A and
contain all the required disclosures set forth on Exhibit B.  The Company shall use its best efforts to
have the Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the Effectiveness Deadline.  By 9:30 am on the date following the date of
effectiveness, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final Prospectus to be used in connection with sales
pursuant to such Registration Statement. 
The Company shall cause the Registration Statement to remain effective
until all of the Registrable Securities have been sold or may be sold without
volume restrictions pursuant to Rule 144(k), as determined by the counsel to
the Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent and the affected Holders (“Registration
Period”).  Prior to the filing of the
Registration Statement with the SEC, the Company shall furnish a draft of the
Registration Statement to the Buyers for their review and comment.  The Buyers shall furnish comments on the
Registration Statement to the Company within twenty-four (24) hours of the
receipt thereof from the Company.

(c)           Failure
to File or Obtain Effectiveness of the Registration Statement.     If: (i) a Registration Statement is not
filed on or prior to its Filing Date (if the Company files a Registration
Statement without affording the Holders the opportunity to review and comment
on the same as required by Section 3(a), the Company shall not be deemed to
have satisfied this clause (i)), or (ii) the Company fails to file with the SEC
a request for acceleration in accordance with Rule 461 promulgated under the
Securities Act, within five Trading Days of the date that the Company is
notified (orally or in writing, whichever is earlier) by the SEC that a
Registration Statement will not be “reviewed,” or not subject to further review,
or (iii) a Registration Statement filed or required to be filed hereunder is
not declared effective by the SEC by its Effectiveness Deadline, or (iv) after
the effectiveness, a Registration Statement ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is
required to be effective, or the Holders are otherwise not permitted to utilize
the Prospectus therein to resell such Registrable Securities for more than 30
consecutive calendar days or more than an aggregate of 40 calendar days during
any 12-month period (which need not be consecutive calendar days) (any such
failure or breach being referred to as an “Event”), then in addition to
any other rights the holders of the Convertible Debentures may have hereunder
or under applicable law, on each such Event date and on each monthly
anniversary of each such Event date (if the applicable Event shall not have
been cured by such date) until the applicable Event is cured, the Company shall
pay to each holder of Convertible Debentures an amount in cash, as partial
liquidated damages (“Liquidated Damages”) and not as a penalty, equal to
2.0% of the 

 3
 

aggregate purchase price paid by such holder pursuant to the Securities
Purchase Agreement for any Convertible Debentures then held by such
holder.  The parties agree that (1) the
Company shall not be liable for Liquidated Damages under this Agreement with
respect to any Warrants or Warrant Shares and (2) the maximum aggregate
Liquidated Damages payable to a holder of Convertible Debentures under this
Agreement shall be twelve percent (12%) of the aggregate Purchase Price paid by
such holder pursuant to the Securities Purchase Agreement.  The partial Liquidated Damages pursuant to
the terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to the cure of an Event.

(d)           Liquidated
Damages.  The Company and the Buyer
hereto acknowledge and agree that the sums payable under subsection 2(c) above
shall constitute liquidated damages and not penalties and are in addition to
all other rights of the Buyer, including the right to call a default.  The parties further acknowledge that (i) the
amount of loss or damages likely to be incurred is incapable or is difficult to
precisely estimate, (ii) the amounts specified in such subsections bear a
reasonable relationship to, and are not plainly or grossly disproportionate to,
the probable loss likely to be incurred in connection with any failure by the
Company to obtain or maintain the effectiveness of a Registration Statement,
(iii) one of the reasons for the Company and the Buyer reaching an agreement as
to such amounts was the uncertainty and cost of litigation regarding the
question of actual damages, and (iv) the Company and the Buyer are
sophisticated business parties and have been represented by sophisticated and
able legal counsel and negotiated this Agreement at arm’s length.

3.             RELATED
OBLIGATIONS.

(a)           The
Company shall, not less than three (3) Trading Days prior to the filing of each
Registration Statement and not less than one (1) Trading Day prior to the
filing of any related amendments and supplements to all Registration Statements
(except for annual reports on Form 10-K or Form 10-KSB), furnish to each Buyer
copies of all such documents proposed to be filed, which documents (other than
those incorporated or deemed to be incorporated by reference) will be subject
to the reasonable and prompt review of such Buyers, The Company shall not file
a Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Buyers shall reasonably object in good faith; provided that, the Company is notified of such objection in
writing no later than two (2) Trading Days after the Buyers have been so
furnished copies of a Registration Statement.

(b)           The
Company shall (i) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
Prospectus used in connection with such Registration Statement, which
prospectus is to be filed pursuant to Rule 424 promulgated under the Securities
Act, as may be necessary to keep such Registration Statement effective at all
times during the Registration Period, and prepare and file with the SEC such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement
(subject to the terms of this Agreement), and as so supplemented or amended to
be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible
to any comments received from the SEC with respect to a Registration Statement
or any amendment thereto and as promptly as reasonably possible provide the
Buyers true and complete copies of all correspondence from and to the SEC
relating to a Registration 

 4
 

Statement (provided that the Company may excise any information
contained therein which would constitute material non-public information as to
any Buyer which has not executed a confidentiality agreement with the Company);
and (iv) comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement.  In the case of amendments and
supplements to a Registration Statement which are required to be filed pursuant
to this Agreement (including pursuant to this Section 3(b)) by reason of the
Company’s filing a report on Form 10-KSB, Form 10-QSB or Form 8-K or any
analogous report under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the Company shall incorporate such report by reference into the
Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the Exchange Act report is
filed which created the requirement for the Company to amend or supplement the
Registration Statement.

(c)           To
the extent that the Buyer holds any Registrable Securities that are prohibited
from being included on a the initial Registration Statement or any other Registration
Statement (the “Non-Registered Shares”) under Rule 415, as interpreted
by the SEC, then the Company shall become obligated to file an additional
Registration Statement (each, a “Subsequent Registration Statement”) on
the first day after such Subsequent Registration Statement may be filed without
objection by the SEC under Rule 415 covering the resale by the Buyers of the
maximum number of such Non-Registered Shares allowed under Rule 415 as
interpreted by the SEC.

(d)           The
Company shall furnish to each Buyer whose Registrable Securities are included
in any Registration Statement, without charge, (i) at least one (1) copy of
such Registration Statement as declared effective by the SEC and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and each preliminary
prospectus, (ii) ten (10) copies of the final prospectus included in such
Registration Statement and all amendments and supplements thereto (or such
other number of copies as such Buyer may reasonably request) and (iii) such
other documents as such Buyer may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by such
Buyer.

(e)           The
Company shall use its best efforts to (i) register and qualify the Registrable
Securities covered by a Registration Statement under such other securities or “blue
sky” laws of such jurisdictions in the United States as any Buyer reasonably
requests, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (w) make any change to its
articles of incorporation or by-laws, (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such 

 5
 

jurisdiction.  The Company shall
promptly notify each Buyer who holds Registrable Securities of the receipt by
the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United
States or its receipt of actual notice of the initiation or threat of any
proceeding for such purpose.

(f)            As
promptly as practicable after becoming aware of such event or development, the
Company shall notify each Buyer in writing of the happening of any event as a
result of which the Prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such supplement or amendment to each Buyer.  The Company shall also promptly notify each
Buyer in writing (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and when a Registration Statement or any
post-effective amendment has become effective (notification of such
effectiveness shall be delivered to each Buyer by facsimile on the same day of
such effectiveness), (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.

(g)           The
Company shall use its best efforts to prevent the issuance of any stop order or
other suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale
in any jurisdiction within the United States of America and, if such an order
or suspension is issued, to obtain the withdrawal of such order or suspension
at the earliest possible moment and to notify each Buyer who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.

(h)           If,
after the execution of this Agreement, a Buyer believes, after consultation
with its legal counsel, that it could reasonably be deemed to be an underwriter
of Registrable Securities, at the request of any Buyer, the Company shall
furnish to such Buyer, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as a Buyer may
reasonably request (i) a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, and (ii) an opinion, dated as of such date,
of counsel representing the Company for purposes of such Registration
Statement, in form, scope and substance as is customarily given in an
underwritten public offering, addressed to the Buyers.

(i)            If,
after the execution of this Agreement, a Buyer believes, after consultation
with its legal counsel, that it could reasonably be deemed to be an underwriter
of Registrable Securities, at the request of any Buyer, the Company shall make
available for inspection by (i) any Buyer and (ii) one (1) firm of
accountants or other agents retained by the Buyers (collectively, the “Inspectors”)
all pertinent financial and other records, and pertinent 

 6
 

corporate documents and properties of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall
agree, and each Buyer hereby agrees, to hold in strict confidence and shall not
make any disclosure (except to a Buyer) or use 
any Record or other information which the Company determines in good
faith to be confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is
otherwise required under the Securities Act, (b) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order from a court or
government body of competent jurisdiction, or (c) the information in such
Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
and the Buyer has knowledge.  Each Buyer
agrees that it shall, upon learning that disclosure of such Records is sought
in or by a court or governmental body of competent jurisdiction or through
other means, give prompt notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.

(j)            The
Company shall hold in confidence and not make any disclosure of information
concerning a Buyer provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement.  The Company agrees that it
shall, upon learning that disclosure of such information concerning a Buyer is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Buyer and allow such
Buyer, at the Buyer’s expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.

(k)           The
Company shall use its best efforts either to cause all the Registrable
Securities covered by a Registration Statement (i) to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) the
inclusion for quotation on the National Association of Securities Dealers, Inc.
OTC Bulletin Board for such Registrable Securities.  The Company shall pay all fees and expenses
in connection with satisfying its obligation under this Section 3(j).

(l)            The
Company shall cooperate with each Buyer who holds Registrable Securities being
offered and, to the extent applicable, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case
may be, as the Buyers may reasonably request and registered in such names as
the Buyers may request.

 7
 

(m)          The
Company shall use its best efforts to cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable Securities.

(n)           The
Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions
of Rule 158 under the Securities Act) covering a twelve (12) month period
beginning not later than the first day of the Company’s fiscal quarter next
following the effective date of the Registration Statement.

(o)           The
Company shall otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration hereunder.

(p)           Within
two (2) business days after a Registration Statement which covers Registrable
Securities is declared effective by the SEC, the Company shall deliver, and
shall cause legal counsel for the Company to deliver, to the transfer agent for
such Registrable Securities (with copies to the Buyer whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit C.

(q)           The
Company shall take all other reasonable actions necessary to expedite and facilitate
disposition by each Buyer of Registrable Securities pursuant to a Registration
Statement.

4.             OBLIGATIONS
OF THE BUYERS.

(a)           Each
Buyer agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 3(f) or the first sentence of
Section 3(e), such Buyer will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement covering such
Registrable Securities until such Buyer’s receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3(f) or the first sentence of
Section 3(e) or receipt of notice that no supplement or amendment is
required.  Notwithstanding anything to
the contrary, the Company shall cause its transfer agent to deliver unlegended
certificates for shares of Common Stock to a transferee of a Buyer in
accordance with the terms of the Securities Purchase Agreement in connection
with any sale of Registrable Securities with respect to which a Buyer has
entered into a contract for sale prior to the Buyer’s receipt of a notice from
the Company of the happening of any event of the kind described in Section 3(f)
or the first sentence of 3(e) and for which the Buyer has not yet settled.

(b)           Each
Buyer covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it or an exemption
therefrom in connection with sales of Registrable Securities pursuant to the
Registration Statement. 

 

5.             EXPENSES
OF REGISTRATION.

All expenses incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers, legal and accounting fees shall be paid by the Company.

 8
 

6.             INDEMNIFICATION.

With respect to Registrable Securities which are
included in a Registration Statement under this Agreement:

(a)           To
the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Buyer, the directors, officers,
partners, employees, agents, representatives of, and each Person, if any, who
controls any Buyer within the meaning of the Securities Act or the Exchange Act
(each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified Damages”), to which any
of them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact
in a Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under the
securities or other “blue sky” laws of any jurisdiction in which Registrable
Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any other law, including,
without limitation, any state securities law, or any rule or regulation there
under relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, “Violations”). 
The Company shall reimburse the Buyers and each such controlling person
promptly as such expenses are incurred and are due and payable, for any legal
fees or disbursements or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.  Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6(a):
(x) shall not apply to a Claim by an Indemnified Person arising out of or based
upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; (y) shall not be
available to the extent such Claim is based on a failure of the Buyer to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant
to Section 3(c); and (z) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written consent of
the Company, which 

 9
 

consent shall not be unreasonably withheld. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf
of the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Buyers pursuant to Section 9 hereof.

(b)           In
connection with a Registration Statement, each Buyer agrees to severally and
not jointly indemnify, hold harmless and defend, to the same extent and in the
same manner as is set forth in Section 6(a), the Company, each of its
directors, each of its officers, employees, representatives, or agents and each
Person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act (each an “Indemnified Party”), against any Claim
or Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified
Damages arise out of or is based upon any Violation, in each case to the
extent, and only to the extent, that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such Buyer
expressly for use in connection with such Registration Statement; and, subject
to Section 6(d), such Buyer will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) and the agreement with respect to contribution contained in
Section 7 shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such Buyer, which
consent shall not be unreasonably withheld; provided, further, however, that
the Buyer shall be liable under this Section 6(b) for only that amount of a
Claim or Indemnified Damages as does not exceed the net proceeds to such Buyer
as a result of the sale of Registrable Securities pursuant to such Registration
Statement.  Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf
of such Indemnified Party and shall survive the transfer of the Registrable Securities
by the Buyers pursuant to Section 9. 
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
prospectus shall not inure to the benefit of any Indemnified Party if the
untrue statement or omission of material fact contained in the prospectus was
corrected and such new prospectus was delivered to each Buyer prior to such
Buyer’s use of the prospectus to which the Claim relates.

(c)           Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
6 of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or Indemnified Party shall, if a Claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses of
not more than one (1) counsel for such Indemnified Person or Indemnified Party
to be paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing  interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding.  The Indemnified Party or
Indemnified Person 

 10
 

shall cooperate fully with the indemnifying party in connection with
any negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information reasonably
available to the Indemnified Party or Indemnified Person which relates to such
action or claim.  The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations with
respect thereto.  No indemnifying party
shall be liable for any settlement of any action, claim or proceeding effected
without its prior written consent; provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the
prior written consent of the Indemnified Party or Indemnified Person, consent
to entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party or Indemnified Person of a release from all
liability in respect to such claim or litigation.  Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been
made.  The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6, except to
the extent that the indemnifying party is prejudiced in its ability to defend
such action.

(d)           The
indemnification required by this Section 6 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and
when bills are received or Indemnified Damages are incurred.

(e)           The
indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

7.             CONTRIBUTION.

To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make
the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however, that:  (i) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

8.             REPORTS
UNDER THE EXCHANGE ACT.

With a view to making available to the Buyers the
benefits of Rule 144 promulgated under the Securities Act or any similar rule
or regulation of the SEC that may at any time permit 

 11
 

the Buyers to sell securities of the Company to the
public without registration (“Rule 144”) the Company agrees to:

(a)           make
and keep public information available, as those terms are understood and
defined in Rule 144;

(b)           file
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act so long as the Company
remains subject to such requirements (it being understood that nothing herein
shall limit the Company’s obligations under Section 4(c) of the Securities
Purchase Agreement) and the filing of such reports and other documents as
are  required by the applicable
provisions of Rule 144; and

(c)           furnish
to each Buyer so long as such Buyer owns Registrable Securities, promptly upon
request, (i) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested to permit the Buyers to sell such
securities pursuant to Rule 144 without registration.

9.             AMENDMENT
OF REGISTRATION RIGHTS.

Provisions of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of
the Company and Buyers who then hold at least two-thirds (2/3) of the
Registrable Securities.  Any amendment or
waiver effected in accordance with this Section 9 shall be binding upon
each Buyer and the Company.  No such
amendment shall be effective to the extent that it applies to fewer than all of
the holders of the Registrable Securities. 
No consideration shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of this Agreement
unless the same consideration also is offered to all of the parties to this
Agreement.

10.           MISCELLANEOUS.

(a)           A
Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable Securities or owns the
right to receive the Registrable Securities. 
If the Company receives conflicting instructions, notices or elections
from two (2) or more Persons with respect to the same Registrable Securities,
the Company shall act upon the basis of instructions, notice or election
received from the registered owner of such Registrable Securities.

(b)           No
Piggyback on Registrations.  Except
as set forth on Schedule 10(b) attached hereto, neither the Company nor
any of its security holders (other than the Buyers in such capacity pursuant
hereto) may include securities of the Company in the initial Registration
Statement other than the Registrable Securities.  The Company shall not file any other
registration statements until the initial Registration Statement required
hereunder is declared effective by the SEC, provided that this Section 10(b)
shall not prohibit the Company from filing amendments to registration
statements already filed.

 12

(c)           Piggy-Back
Registrations.  If at any time during
the Registration Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall determine to
prepare and file with the SEC a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with the stock option
or other employee benefit plans, then the Company shall send to each Buyer a
written notice of such determination and, if within fifteen (15) days after the
date of such notice, any such Buyer shall so request in writing, the Company
shall include in such registration statement all or any part of such
Registrable Securities such Buyer requests to be registered; provided, however,
that, the Company shall not be required to register any Registrable Securities
pursuant to this Section 10(c) that are eligible for resale pursuant to Rule
144(k) promulgated under the Securities Act or that are the subject of a then
effective Registration Statement.

(d)           Any notices,
consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have
been delivered:  (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one (1) business day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. 
The addresses and facsimile numbers for such communications shall be:

	
  If to the Company, to:

  	
  Open Energy Corporation

  
	
   

  	
  514 Via de la Valle, Suite 200

  
	
   

  	
  Solana Beach, CA 92075

  
	
   

  	
  Attention: David Saltman, Chief Executive Officer

  
	
   

  	
  Telephone:    858-794-8800

  
	
   

  	
  Facsimile:     
  858-794-8811

  
	
   

  	
   

  
	
  With Copy to:

  	
  Sue J. Hodges, Partner

  
	
   

  	
  Pillsbury Winthrop Shaw Pittman LLP

  
	
   

  	
  12255 El Camino Real, Suite 300

  
	
   

  	
  San Diego, CA 92130

  
	
   

  	
  Telephone:   858-509-4003

  
	
   

  	
  Facsimile:    858-509-4010

  
	
   

  	
   

  

 

If to an Buyer, to its address and facsimile number on
the Schedule of Buyers attached hereto, with copies to such Buyer’s
representatives as set forth on the Schedule of Buyers or to such other address
and/or facsimile number and/or to the attention of such other person as the
recipient party has specified by written notice given to each other party five
(5) days prior to the effectiveness of such change.  Written confirmation of receipt (A) given by
the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a 

 13
 

nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

(e)           Failure of any party
to exercise any right or remedy under this Agreement or otherwise, or delay by
a party in exercising such right or remedy, shall not operate as a waiver
thereof.

(f)            The laws of the State
of New Jersey shall govern all issues concerning the relative rights of the
Company and the Buyers as its stockholders. 
All other questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of New Jersey, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New Jersey or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New Jersey.  Each
party hereby irrevocably submits to the non-exclusive jurisdiction of the
Superior Courts of the State of New Jersey, sitting in Hudson County, New
Jersey and federal courts for the District of New Jersey sitting Newark, New
Jersey, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for
such notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by
law.  If any provision of this Agreement
shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(g)           This Agreement shall
inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

(h)           The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.

(i)            This Agreement may
be executed in identical counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may
be delivered to the other party hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.

 14
 

(j)            Each party shall do
and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order
to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

(k)           The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent and no rules of strict construction will be applied
against any party.

(l)            This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 15
 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their signature page to this
Registration Rights Agreement to be duly executed as of the date first above
written.

	
  

  	
  COMPANY:

  
	
   

  	
  OPEN ENERGY CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  David
  Saltman

  
	
   

  	
  Name:

  	
  David Saltman

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
				

 

 16
 

IN WITNESS WHEREOF,
each Buyer and the Company have caused their signature page to this
Registration Rights Agreement to be duly executed as of the date first above
written.

	
  

  	
  BUYER:

  
	
   

  	
  CORNELL CAPITAL PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Yorkville Advisors, LLC

  
	
   

  	
  Its:

  	
  Investment Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gerald Eicke

  	
   

  
	
   

  	
  Name: Gerald Eicke

  
	
   

  	
  Its: Managing Partner

  
				

 

 17

SCHEDULE I

SCHEDULE OF BUYERS

	
  Buyer

  	
   

  	
  Address/Facsimile 

  Number of Buyer

  	
   

  	
  Address/Facsimile 

  Number of Buyer’s

  Representative

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cornell Capital Partners, L.P.

  	
   

  	
  101 Hudson Street — Suite 3700

  	
   

  	
  101 Hudson Street — Suite 3700

  
	
   

  	
   

  	
  Jersey City, NJ 07303

  	
   

  	
  Jersey City, NJ 07303

  
	
   

  	
   

  	
  Facsimile:       (201)
  985-8266

  	
   

  	
  Facsimile:        (201)
  985-8266

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: David Gonzalez, Esq.

  

 

EXHIBIT
A

SELLING STOCKHOLDERS

AND PLAN OF DISTRIBUTION

Selling Stockholders

The
shares of Common Stock being offered by the selling stockholders are issuable
upon conversion of the convertible debentures and upon exercise of the
warrants.  For additional information
regarding the issuance of those convertible notes and warrants, see “Private
Placement of Convertible Debentures and Warrants” above.  We are registering the shares of Common Stock
in order to permit the selling stockholders to offer the shares for resale from
time to time.  Except as otherwise notes
and except for the ownership of the convertible Debentures and the warrants
issued pursuant to the Securities Purchase Agreement, the selling stockholders
have not had any material relationship with us within the past three years.

The
table below lists the selling stockholders and other information regarding the
beneficial ownership of the shares of Common Stock by each of the selling
stockholders.  The second column lists
the number of shares of Common Stock beneficially owned by each selling
stockholder, based on its ownership of the convertible debentures and warrants,
as of             ,
200  , assuming conversion of all convertible debentures and exercise
of the warrants held by the selling stockholders on that date, without regard
to any limitations on conversions or exercise.

The
third column lists the shares of Common Stock being offered by this prospectus
by the selling stockholders.

In
accordance with the terms of a registration rights agreement with the selling
stockholders, this prospectus generally covers the resale of at least (i) 300%
of the number of Conversion Shares issued and issuable pursuant to the
convertible debentures as of the trading day immediately preceding the date the
registration statement is initially filed with the SEC, and (ii) 100% of the
number of warrant shares issued and issuable pursuant to the warrants as of the
trading day immediately preceding the date the registration statement is
initially filed with the SEC.  Because the conversion price of
the convertible debentures and the exercise price of the warrants may be
adjusted, the number of shares that will actually be issued may be more or less
than the number of shares being offered by this prospectus.  The fourth column assumes the sale of all of
the shares offered by the selling stockholders pursuant to this prospectus.

Under
the terms of the convertible debentures and the warrants, a selling stockholder
may not convert the convertible debentures or exercise the warrants to the
extent such conversion or exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of Common
Stock which would exceed 4.99% of our then outstanding shares of Common Stock
following such conversion or exercise, excluding for purposes of such
determination shares of Common Stock issuable upon conversion of the
convertible debentures which have not been converted and upon exercise of the
warrants which have not been exercised. 
The number of shares in the second column does not reflect this
limitation.  The selling stockholders may
sell all, some or none of their shares in this offering.  See “Plan of Distribution.”

 

	
  Name of Selling Stockholder

  	
   

  	
  Number of Shares Owned

  Prior to Offering

  	
   

  	
  Maximum Number of Shares

  to be Sold Pursuant to this

  Prospectus

  	
   

  	
  Number of Shares Owned

  After Offering

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cornell Capital Partners, L.P. (1)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

(1)           Cornell Capital Partners, L.P. is a
Cayman Island exempt limited partnership. 
Cornell is managed by Yorkville Advisors, LLC.  Investment decisions for Yorkville Advisors
are made by Mark Angelo, its portfolio manager.

 2
 

Plan of Distribution

Each Selling Stockholder
(the “Selling Stockholders”) of the common stock and any of their
pledgees, assignees and successors-in-interest may, from time to time, sell any
or all of their shares of common stock on the                
or any other stock exchange, market or trading facility on which the shares are
traded or in private transactions.  These
sales may be at fixed or negotiated prices. 
A Selling Stockholder may use any one or more of the following methods
when selling shares:

·                  ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers;

·                  block trades in which the broker-dealer
will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;

·                  purchases by a broker-dealer as
principal and resale by the broker-dealer for its account;

·                  an exchange distribution in
accordance with the rules of the applicable exchange;

·                  privately negotiated transactions;

·                  broker-dealers may agree with
the Selling Stockholders to sell a specified number of such shares at a
stipulated price per share;

·                  through the writing or settlement of
options or other hedging transactions, whether through an options exchange or
otherwise;

·                  a combination of any such methods of
sale; or

·                  any other method permitted pursuant
to applicable law.

The Selling Stockholders
may also sell shares under Rule 144 under the Securities Act of 1933, as
amended (the “Securities Act”), if available, rather than under this
prospectus.

Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers
to participate in sales.  Broker-dealers
may receive commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement
to this Prospectus, in the case of an agency transaction not in excess of a
customary brokerage commission in compliance with NASDR Rule 2440; and in the
case of a principal transaction a markup or markdown in compliance with NASDR
IM-2440.

In connection with the
sale of the common stock or interests therein, the Selling Stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the Common Stock in
the course of hedging the positions they assume.  The Selling Stockholders may also enter into
option or other 

 3
 

transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

The Selling Stockholders
and any broker-dealers or agents that are involved in selling the shares may be
deemed to be “underwriters” within the meaning of the Securities Act in
connection with such sales.  In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In no
event shall any broker-dealer receive fees, commissions and markups which, in
the aggregate, would exceed eight percent (8%).

The Company is required
to pay certain fees and expenses incurred by the Company incident to the
registration of the shares.  The Company
has agreed to indemnify the Selling Stockholders against certain losses,
claims, damages and liabilities, including liabilities under the Securities
Act.

Because Selling
Stockholders may be deemed to be “underwriters” within the meaning of the
Securities Act, they will be subject to the prospectus delivery requirements of
the Securities Act including Rule 172 thereunder.  In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than under this prospectus.  There is no underwriter or coordinating
broker acting in connection with the proposed sale of the resale shares by the
Selling Stockholders.

We agreed to keep this
prospectus effective until the earlier of (i) the date on which the shares may
be resold by the Selling Stockholders without registration and without regard
to any volume limitations by reason of Rule 144(k) under the Securities Act or
any other rule of similar effect or (ii) all of the shares have been sold
pursuant to this prospectus or Rule 144 under the Securities Act or any other
rule of similar effect.  The resale
shares will be sold only through registered or licensed brokers or dealers if
required under applicable state securities laws. In addition, in certain
states, the resale shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.

Under applicable rules
and regulations under the Exchange Act, any person engaged in the distribution
of the resale shares may not simultaneously engage in market making activities
with respect to the common stock for the applicable restricted period, as
defined in Regulation M, prior to the commencement of the distribution.  In addition, the Selling Stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of shares of the common stock by the Selling Stockholders
or any other person.  We will make copies
of this prospectus available to the Selling Stockholders and have informed them
of the need to deliver a copy of this prospectus to each purchaser at or prior
to the time of the sale (including by compliance with Rule 172 under the
Securities Act).

 4
 

EXHIBIT
B

OTHER DISCLOSURES 

See attachment provided separately.

 5
 

EXHIBIT
C

FORM OF NOTICE OF
EFFECTIVENESS

OF REGISTRATION STATEMENT

Attention:

Re:                               OPEN ENERGY CORPORATION

Ladies and
Gentlemen:

We are counsel to Open Energy Corporation, a Nevada
corporation (the “Company”), and have represented the Company in
connection with that certain Securities Purchase Agreement (the “Securities
Purchase Agreement”) entered into by and among the Company and the Buyers
named therein (collectively, the “Buyers”) pursuant to which the Company
issued to the Buyers shares of its Common Stock, par value $0.01 per share (the
“Common Stock”).  Pursuant to the
Purchase Agreement, the Company also has entered into a Registration Rights
Agreement with the Buyers (the “Registration Rights Agreement”) pursuant
to which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement) under the
Securities Act of 1933, as amended (the “Securities Act”).  In connection with the Company’s obligations
under the Registration Rights Agreement, on                         
        , the Company filed a
Registration Statement on Form              
(File No. 333-                   )
(the “Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) relating to the Registrable Securities which
names each of the Buyers as a selling stockholder there under.

In connection with the foregoing, we advise you that a
member of the SEC’s staff has advised us by telephone that the SEC has entered
an order declaring the Registration Statement effective under the Securities
Act at [ENTER TIME OF EFFECTIVENESS]
on [ENTER DATE OF EFFECTIVENESS]
and we have no knowledge, after telephonic inquiry of a member of the SEC’s
staff, that any stop order suspending its effectiveness has been issued or that
any proceedings for that purpose are pending before, or threatened by, the SEC
and the Registrable Securities are available for resale under the Securities
Act pursuant to the Registration Statement.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Law Firm]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

cc:           [LIST
NAMES OF BUYERS]

 6

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