Document:

Exhibit
10.7

REGISTRATION RIGHTS AGREEMENT

THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of June 15, 2007, by and among OPEN
ENERGY CORPORATION, a Nevada corporation (the “Company”),
and the undersigned Holder (the “Holder”).

WHEREAS:

A.           
In connection with the Note and Warrant Purchase Agreement by and among the
parties hereto of even date herewith (the “Note
and Warrant Purchase Agreement”), the Company has agreed, upon the terms
and subject to the conditions of the Note and Warrant Purchase Agreement, to
issue and sell to the Holder (i) a Note (the “Note”) which, if not paid
when due, and if the collateral pledged to ensure the payment thereof is not
sufficient to satisfy the obligations of the Company with respect thereto, may
be converted into the Convertible Debenture (defined below) and the Default
Warrant (defined below), (ii) a Warrant (the “Warrant”) which will be
exercisable to purchase shares of Common Stock (as exercised, collectively, the
“Warrant Shares”), (iii) in the event of a default on the Note issued
pursuant to the Note and Warrant Purchase Agreement and a subsequent failure to
obtain sufficient funds from the sale of the collateral pledged under the Stock
Pledge Agreement of even date herewith in order to satisfy all obligations of
the Company under the Note the Holder, at his option, may convert such unpaid
obligation of the Company into a secured convertible debenture (the “Convertible
Debenture”) 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
Debenture, and (iv) at the time of any such conversion into the Convertible
Debenture the Holder also shall receive the Default Warrant (the “Default
Warrant”), which will be exercisable to purchase shares of Common Stock (as
exercised, collectively, the “Default Warrant Shares”). 
Capitalized terms not defined herein shall have the meaning ascribed to them in
the Note and Warrant Purchase Agreement.

B.           
To induce the Holder to execute and deliver the Note and Warrant 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
Holder 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 Debenture.

(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 Holder 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 exercise of the Warrant, conversion of
the Convertible Debenture or exercise of the Default Warrant 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 Warrant Shares issued or
issuable upon exercise of the Warrant, (ii) the Conversion Shares issuable upon
conversion of the Convertible Debenture, (iii) the Default Warrant Shares
issued or issuable upon exercise of the Default Warrant, (iv) any additional shares
issuable in connection with any anti-dilution provisions in the Default Warrant
or the Convertible Debenture (without giving effect to any limitations on
exercise set forth in the Warrant, the Default Warrant or the Convertible
Debenture) and (v) any shares of Common Stock issued or issuable with respect
to the Conversion Shares, the Convertible Debenture, the Default Warrant
Shares, or the Default Warrant 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 Debenture or
exercise of the Default Warrant.

(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.            
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 Holder 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 Holder for their review and comment. 
The Holder 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 Debenture 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 Debenture
an amount in cash, as partial liquidated damages (“Liquidated Damages”)
and not as a penalty, equal to 2.0% of the aggregate purchase price paid by
such holder pursuant to the Note and Warrant Purchase Agreement for any
Convertible Debenture 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 Default Warrant or Default Warrant Shares and (2) the
maximum aggregate Liquidated Damages payable to a holder of Convertible Debenture
under this Agreement shall be twelve percent (12%) of the aggregate Purchase
Price paid by such holder pursuant to the Note and Warrant 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 Holder 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 Holder, 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 Holder 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 Holder 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 the Holder
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 the Holder, The Company shall not file a
Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Holder 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  Holder 
has 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 Holder true and complete copies of all
correspondence from and to the SEC relating to a Registration Statement
(provided that the Company may excise any information contained therein which
would constitute material non-public information as to the Holder 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 Holder 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 Holder of the maximum number of such Non-Registered Shares allowed under
Rule 415 as interpreted by the SEC.

(d)          
The Company shall furnish to the Holder 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 the Holder may reasonably request) and (iii) such
other documents as the Holder may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by the
Holder.

(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 the
Holder 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 jurisdiction.  The Company shall promptly
notify the Holder 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 the Holder 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 the
Holder.  The Company shall also promptly notify the Holder 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
the Holder 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 the Holder 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, the Holder believes, after
consultation with his legal counsel, that he could reasonably be deemed to be
an underwriter of Registrable Securities, at the request of the Holder, the
Company shall furnish to the Holder, on the date of the effectiveness of the
Registration Statement and thereafter from time to time on such dates as the
Holder 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 Holder.

(i)           
If, after the execution of this Agreement, the Holder believes, after
consultation with its legal counsel, that he could reasonably be deemed to be
an underwriter of Registrable Securities, at the request of the Holder, the
Company shall make available for inspection by (i) the Holder and (ii) one
(1) firm of accountants or other agents retained by the Holder (collectively,
the “Inspectors”) all pertinent financial and other records, and
pertinent 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 the Holder hereby agrees, to hold in strict
confidence and shall not make any disclosure 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 Holder has knowledge.  The Holder agrees that he 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 the Holder 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 the Holder is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
the Holder and allow the Holder, at the Holder’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 the Holder 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 Holder may reasonably
request and registered in such names as the Holder may request.

(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 Holder)
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 the Holder of Registrable Securities pursuant to a
Registration Statement.

4.            
OBLIGATIONS OF THE HOLDER.

(a)          
The Holder 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), the Holder will immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement covering such
Registrable Securities until the Holder’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 the Holder in accordance with the terms of the
Note and Warrant Purchase Agreement in connection with any sale of Registrable
Securities with respect to which the Holder has entered into a contract for
sale prior to the Holder’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 Holder has not yet settled.

(b)          
The Holder covenants and agrees that he will comply with the prospectus
delivery requirements of the Securities Act as applicable to him 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.

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 the Holder, the directors, officers,
partners, employees, agents, representatives of, and each Person, if any, who
controls the Holder 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 Holder 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
Holder 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 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 Holder pursuant to
Section 9 hereof.

(b)          
In connection with a Registration Statement, the Holder 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 the
Holder expressly for use in connection with such Registration Statement; and,
subject to Section 6(d), the Holder 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 the Holder, which
consent shall not be unreasonably withheld; provided, further, however, that
the Holder 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 the Holder
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 Holder
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 the Holder
prior to the Holder’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 his or 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 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 his or its prior written consent; provided,
however, that the indemnifying party shall not unreasonably withhold, delay or
condition his or 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 his or 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 he or 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 Holder 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 the Holders 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 Note and
Warrant 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 the Holder so long as the Holder 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 Holder 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 Holder 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 Holder 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 Holder 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.

(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 the Holder a written notice of
such determination and, if within fifteen (15) days after the date of such
notice, the Holder shall so request in writing, the Company shall include in
such registration statement all or any part of such Registrable Securities the
Holder 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:

  	
   

  	
  John Hart, Esq.

  
	
   

  	
   

  	
  514 Via de la Valle, Suite 200

  
	
   

  	
   

  	
  Solana Beach, CA 92075

  
	
   

  	
   

  	
  Telephone:   858-794-8800

  
	
   

  	
   

  	
  Facsimile:    858-794-8811

  

 

If to the Holder, to his address and facsimile number
on the Schedule of the Holder attached hereto, with copies to the Holder’s
representatives as set forth on the Schedule of the Holder 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 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 Illinois shall govern all issues concerning the
relative rights of the Company and the Holder as its stockholder.  All
other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of Illinois, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of Illinois or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Illinois.  Each party hereby irrevocably submits
to the non-exclusive jurisdiction of the State Courts of the State of Illinois,
sitting in Cook County, Illinois and federal courts for the Northern District
of Illinois sitting in Chicago, Illinois, 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 he or 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 him or 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 HE OR 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.

(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.

IN
WITNESS WHEREOF, the Holder 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:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David Saltman

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
					

 

 

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

	
  

  	
   

  	
  HOLDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: John Fife

  

 

SCHEDULE I

HOLDER

	
  Holder

  	
   

  	
  Address/Facsimile 

  Number of Holder

  	
   

  	
  Address/Facsimile 

  Number of Holder’s

  Representative

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John Fife

  	
   

  	
  303 East Wacker Drive, Suite 311

  	
   

  	
  303 East Wacker Drive, Suite 311

  
	
  

  	
   

  	
  Chicago, IL 60601

  	
   

  	
  Chicago, IL 60601

  
	
  

  	
   

  	
  Facsimile:       (312)819-9701

  	
   

  	
  Facsimile:        (312)819-9701

  
	
  

  	
   

  	
  Attention: Merrill E. Weber, 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 exercise of the warrant, conversion of
the convertible debentures and upon exercise of the default warrant.  For
additional information regarding the issuance of those warrants, convertible
notes and default warrants, see “Private Placement of Warrant, Convertible
Debenture and Default Warrant” 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 warrant, the convertible debenture and the default warrant
issued pursuant to the Note and Warrant 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 his or its ownership of the warrant, the convertible
debenture and the default warrant, as of
            ,
200  , assuming exercise of the warrant, conversion of the
convertible debenture and exercise of the default warrant 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 debenture 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 and default warrant
shares issued and issuable pursuant to the warrant and the default warrant as
of the trading day immediately preceding the date the registration statement is
initially filed with the SEC.  Because
the exercise price of the warrant, the conversion price of the convertible
debenture and the exercise price of the default warrant 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 warrant, the convertible debenture and the default warrant, a selling
stockholder may not exercise the warrant, convert the convertible debenture or
exercise the default warrant to the extent such conversion or exercise would
cause such selling stockholder, together with his or 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 exercise of the warrant, conversion of the convertible debenture
which have not been converted and upon exercise of the default warrant 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

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John Fife

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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
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 he or 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).

EXHIBIT B

OTHER DISCLOSURES 

None

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 Note and Warrant Purchase Agreement (the “Note
and Warrant Purchase Agreement”) entered into by and among the Company and
the Holder named therein (collectively, the “Holders”) pursuant to which
the Company issued to the Holder 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 Holder (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 Holder 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:          
[NAME OF HOLDER]Exhibit
10.8

SECURITY AGREEMENT

THIS
SECURITY AGREEMENT (the “Agreement”),  is entered into and made effective as of
June 15, 2007, by and between OPEN ENERGY
CORPORATION, a Nevada corporation with its principal place of
business located at 514 Via de la Valle, Suite 200, Solana Beach, CA 92075 (the
“Parent”), and each subsidiary of the Parent listed on Schedule I
attached hereto (each a “Subsidiary,” and collectively and together with
the Parent, the “Company”), in favor of the HOLDER
(the “Secured Party”) listed on Schedule I attached to the Note and
Warrant Purchase Agreement (the “Note and Warrant Purchase Agreement”)
dated the date hereof between the Company and the Secured Party.

WHEREAS,
in connection with the Note and Warrant Purchase Agreement by
and among the parties hereto of even date herewith (the “Note and Warrant Purchase Agreement”),
the Company has agreed, upon the terms and subject to the conditions of the
Note and Warrant Purchase Agreement, to issue and sell to the Holder  a Note (the “Note”) which, if not paid
when due, and if the collateral pledged to ensure the payment thereof is not
sufficient to satisfy the obligations of the Company with respect thereto, may
be converted into a secured convertible Debenture (the “Convertible
Debenture”) 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
Debenture. Capitalized terms not defined herein shall have the meaning ascribed
to them in the Note and Warrant Purchase Agreement.

WHEREAS,
to induce the Secured Party to enter into the transaction
contemplated by the Note and Warrant Purchase Agreement, and the related
documents, each Company hereby grants to the Secured Party a security interest
in and to the pledged property of each Company identified on Exhibit A
hereto (collectively referred to as the “Pledged Property”) to secure
all of the Obligations (as defined below).

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

ARTICLE
1.

DEFINITIONS AND INTERPRETATIONS

Section
1.1.            Recitals.

The above recitals are true
and correct and are incorporated herein, in their entirety, by this reference.

Section
1.2.            Interpretations.

Nothing herein expressed or implied is intended or
shall be construed to confer upon any person other than the Secured Party any
right, remedy or claim under or by reason hereof.

Section
1.3.            Obligations
Secured.

The security interest created hereby in the Pledged
Property constitutes continuing collateral security for all of the following
obligations of the Parent (collectively, the “Obligations”):

(a)  After Holder’s delivery of a Note Conversion
Letter and for so long thereafter as the Convertible Debentures are
outstanding, the payment by the Parent, as and when due and payable (by
scheduled maturity, acceleration, demand or otherwise), of all amounts from
time to time owing by it in respect of the Note and Warrant Purchase Agreement,
the Convertible Debentures, and any other related documents in connection with the
Convertible Debentures; and

(b)  After Holder’s delivery of a Note Conversion
Letter and for so long thereafter as the Convertible Debentures are
outstanding, the due performance and observance by the Parent of all of its
other obligations from time to time existing in respect of any of the other
related documents in connection with the Convertible Debentures, including
without limitation, the Parent’s obligations with respect to any conversion or
redemption rights of the Secured Party under the Convertible Debentures.

ARTICLE
2.

PLEDGED PROPERTY; EVENT OF DEFAULT

Section
2.1.            Pledged
Property.

(a)             
As collateral security for all of the Obligations, the Company hereby pledges
to the Secured Party, and creates in the Secured Party for his benefit, a
continuing security interest in and to all of the Pledged Property whether now
owned or hereafter acquired.

(b)             
Simultaneously with the execution and delivery of this Agreement, the Company
shall make, execute, acknowledge, file, record and deliver to the Secured Party
any documents reasonably requested by the Secured Party to perfect his security
interest in the Pledged Property.  Simultaneously with the execution and
delivery of this Agreement, the Company shall make, execute, acknowledge and
deliver to the Secured Party such documents and instruments, including, without
limitation, financing statements, certificates, affidavits and forms as may, in
the Secured Party’s reasonable judgment, be necessary to effectuate, complete
or perfect, or to continue and preserve, the security interest of the Secured
Party in the Pledged Property, and the Secured Party shall hold such documents
and instruments as secured party, subject to the terms and conditions contained
herein.

Section
2.2.            Event
of Default

An
“Event of Default” shall be deemed to have occurred under this Agreement
upon an Event of Default under and as defined in the Convertible Debentures.

ARTICLE
3.

ATTORNEY-IN-FACT; PERFORMANCE

Section
3.1.            Secured
Party Appointed Attorney-In-Fact.

Upon the occurrence and during the continuance of an
Event of Default: (a) the Company hereby appoints the Secured Party as its
attorney-in-fact, with full authority in the place and stead of the Company and
in the name of the Company or otherwise, from time to time in the Secured
Party’s discretion to take any action and to execute any instrument which the
Secured Party may reasonably deem necessary to accomplish the purposes of this
Agreement, including, without limitation, to receive and collect all
instruments made payable to the Company representing any payments in respect of
the Pledged Property or any part thereof and to give full discharge for the
same; (b) the Secured Party may demand, collect, receipt for, settle,
compromise, adjust, sue for, foreclose, or realize on the Pledged Property as
and when the Secured Party may determine, and (c) to facilitate collection, the
Secured Party may notify account debtors and obligors on any Pledged Property
to make payments directly to the Secured Party.

Section
3.2.            Secured
Party May Perform.

If the Company fails to perform any agreement
contained herein, the Secured Party, at his option, may himself perform, or
cause performance of, such agreement, and the expenses of the Secured Party
incurred in connection therewith shall be included in the Obligations secured
hereby and payable by the Company under Section 8.3.

ARTICLE
4.

REPRESENTATIONS AND WARRANTIES

Section
4.1.            Authorization;
Enforceability.

Each of the parties hereto represents and warrants
that he or it has taken all action necessary to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby; and upon execution and delivery, this Agreement shall constitute a
valid and binding obligation of the respective party, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights or by the principles governing the availability of equitable
remedies.

Section
4.2.            Ownership
of Pledged Property.

The Company represents and warrants that it is the
legal and beneficial owner of the Pledged Property free and clear of any lien,
security interest, option or other charge or encumbrance (each, a “Lien”)
except for the security interest created by this Agreement and other Permitted
Liens.  For purposes of this Agreement, “Permitted Liens” means: (1) the
security interest created by this Agreement, (2) existing Liens disclosed by
the Company to the Secured Party; (3) inchoate Liens for taxes, assessments or
governmental charges or levies not yet due, as to which the grace period, if
any, related thereto has not yet expired, or being contested in good faith and
by appropriate proceedings for which adequate reserves have been established in
accordance with GAAP; (4) Liens of carriers, materialmen, warehousemen,
mechanics and landlords and other similar Liens which secure amounts which are
not yet overdue by more than 60 days or which are being contested in good faith
by appropriate proceedings; (5) licenses, sublicenses, leases or subleases
granted to other Persons not materially interfering with the conduct of the
business of the Company; (6) Liens securing capitalized lease obligations and
purchase money indebtedness incurred solely for the purpose of financing an
acquisition or lease; (7) easements, rights-of-way, restrictions,
encroachments, municipal zoning ordinances and other similar charges or
encumbrances, and minor title deficiencies, in each case not securing debt and
not materially interfering with the conduct of the business of the Company and
not materially detracting from the value of the property subject thereto; (8)
Liens arising out of the existence of judgments or awards which judgments or
awards do not constitute an Event of Default; (9) Liens incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance, pension liabilities and social security benefits and
Liens securing the performance of bids, tenders, leases and contracts in the
ordinary course of business, statutory obligations, surety bonds, performance
bonds and other obligations of a like nature (other than appeal bonds) incurred
in the ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money); (10) Liens in favor of a banking institution
arising by operation of law encumbering deposits (including the right of
set-off) and contractual set-off rights held by such banking institution and which
are within the general parameters customary in the banking industry and only
burdening deposit accounts or other funds maintained with a creditor depository
institution; (11) usual and customary set-off rights in leases and other
contracts; and (12) escrows in connection with acquisitions and dispositions.

ARTICLE
5.

DEFAULT; REMEDIES; SUBSTITUTE
COLLATERAL

Section
5.1             Method
of Realizing Upon the Pledged Property: Other Remedies.

If any Event of Default shall have occurred and be
continuing:

(a)          
The Secured Party may exercise in respect of the Pledged Property, in addition
to any other rights and remedies provided for herein or otherwise available to
him, all of the rights and remedies of a secured party upon default under the
Uniform Commercial Code (whether or not the Uniform Commercial Code applies to
the affected Pledged Property), and also may (i) take absolute control of the
Pledged Property, including, without limitation, transfer into the Secured
Party’s name or into the name of 

his nominee or nominees (to the extent the Secured
Party has not theretofore done so) and thereafter receive, for the benefit of
the Secured Party, all payments made thereon, give all consents, waivers and
ratifications in respect thereof and otherwise act with respect thereto as
though he were the outright owner thereof, (ii) require the Company to
assemble all or part of the Pledged Property as directed by the Secured Party
and make it available to the Secured Party at a place or places to be designated
by the Secured Party that is reasonably convenient to both parties, and the
Secured Party may enter into and occupy any premises owned or leased by the
Company where the Pledged Property or any part thereof is located or assembled
for a reasonable period in order to effectuate the Secured Party’s rights and
remedies hereunder or under law, without obligation to the Company in respect
of such occupation, and (iii) without notice except as specified below and
without any obligation to prepare or process the Pledged Property for sale,
(A) sell the Pledged Property or any part thereof in one or more parcels
at public or private sale, at any of the Secured Party’s offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and
upon such other terms as the Secured Party may deem commercially reasonable
and/or (B) lease, license or dispose of the Pledged Property or any part
thereof upon such terms as the Secured Party may deem commercially
reasonable.  The Company agrees that, to the extent notice of sale or any
other disposition of the Pledged Property shall be required by law, at least
ten (10) days’ notice to the Company of the time and place of any public sale
or the time after which any private sale or other disposition of the Pledged
Property is to be made shall constitute reasonable notification.  The
Secured Party shall not be obligated to make any sale or other disposition of
any Pledged Property regardless of notice of sale having been given.  The
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so
adjourned.  The Company hereby waives any claims against the Secured Party
arising by reason of the fact that the price at which the Pledged Property may
have been sold at a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Secured Party accepts the first offer received and
does not offer such Pledged Property to more than one offeree, and waives all
rights that the Company may have to require that all or any part of such
Pledged Property be marshaled upon any sale (public or private) thereof. 
The Company hereby acknowledges that (i) any such sale of the Pledged
Property by the Secured Party may be made without warranty, (ii) the
Secured Party may specifically disclaim any warranties of title, possession,
quiet enjoyment or the like, and (iii) such actions set forth in
clauses (i) and (ii) above shall not adversely affect the commercial
reasonableness of any such sale of Pledged Property.

(b)          
Any cash held by the Secured Party as Pledged Property and all cash proceeds
received by the Secured Party in respect of any sale of or collection from, or
other realization upon, all or any part of the Pledged Property shall be
applied (after payment of any amounts payable to the Secured Party pursuant to
Section 8.3 hereof) by the Secured Party against, all or any part of the
Obligations in such order as the Secured Party shall elect, consistent with the
provisions of the Note and Warrant Purchase Agreement.  Any surplus of
such cash or cash proceeds held by the Secured Party and remaining after the
indefeasible payment in full in cash of all of the Obligations shall be paid
over to whomsoever shall be lawfully entitled to receive the same or as a court
of competent jurisdiction shall direct.

(c)          
In the event that the proceeds of any such sale, collection or realization are
insufficient to pay all amounts to which the Secured Party is legally entitled,
the Company shall be liable for the deficiency, together with interest thereon
at the rate specified in the Convertible Debentures for interest on overdue
principal thereof or such other rate as shall be fixed by applicable law,
together with the costs of collection and the reasonable fees, costs, expenses
and other client charges of any attorneys employed by the Secured Party to
collect such deficiency.

(d)          
The Company hereby acknowledges that if the Secured Party complies with any
applicable state, provincial, or federal law requirements in connection with a
disposition of the Pledged Property, such compliance will not adversely affect
the commercial reasonableness of any sale or other disposition of the Pledged
Property.

(e)          
The Secured Party shall not be required to marshal any present or future
collateral security (including, but not limited to, this Agreement and the
Pledged Property) for, or other assurances of payment of, the Obligations or
any of them or to resort to such collateral security or other assurances of 

payment in any particular order, and all of the
Secured Party’s rights hereunder and in respect of such collateral security and
other assurances of payment shall be cumulative and in addition to all other
rights, however existing or arising.  To the extent that the Company
lawfully may, the Company hereby agrees that it will not invoke any law
relating to the marshaling of collateral which might cause delay in or impede
the enforcement of the Secured Party’s rights under this Agreement or under any
other instrument creating or evidencing any of the Obligations or under which any
of the Obligations is outstanding or by which any of the Obligations is secured
or payment thereof is otherwise assured, and, to the extent that it lawfully
may, the Company hereby irrevocably waives the benefits of all such laws.

Section
5.2             Duties
Regarding Pledged Property.

The Secured Party shall have no duty as to the
collection or protection of the Pledged Property or any income thereon or as to
the preservation of any rights pertaining thereto, beyond the safe custody and
reasonable care of any of the Pledged Property actually in the Secured Party’s
possession.

ARTICLE
6.

AFFIRMATIVE COVENANTS

The Company covenants and agrees that, from the date
hereof and until the Obligations have been fully paid and satisfied or the
Convertible Debentures have been fully converted, unless the Secured Party
shall consent otherwise in writing (as provided in Section 8.4 hereof):

Section
6.1.            Existence,
Properties, Etc.

The Company shall do, or cause to be done, all
things, or proceed with due diligence with any actions or courses of action,
that may be reasonably necessary (i) to maintain Company’s due
organization, valid existence and good standing under the laws of its state of
incorporation, and (ii) to preserve and keep in full force and effect all
qualifications, licenses and registrations in those jurisdictions in which the
failure to do so could have a Material Adverse Effect (as defined below); and
(b) the Company shall not do, or cause to be done, any act impairing the
Company’s corporate power or authority (i) to carry on the Company’s
business as now conducted, and (ii) to execute or deliver this Agreement
or any other document delivered in connection herewith, including, without
limitation, any UCC-1 Financing Statements required by the Secured
Party (which other loan instruments collectively shall be referred to as
the “Loan Instruments”) to which it is or will be a party, or
perform any of its obligations hereunder or thereunder.  For purpose of
this Agreement, the term “Material Adverse Effect” shall mean any
material and adverse affect as determined by Secured Party in his reasonable
discretion, whether individually or in the aggregate, upon (a) the
Company’s assets, business, operations, properties or condition, financial or
otherwise; (b) the Company’s ability to make payment as and when due of
all or any part of the Obligations; or (c) the Pledged Property.

Section
6.2.            Financial
Statements and Reports.

The Company shall furnish to the Secured Party within
a reasonable time such financial data as the Secured Party may reasonably
request.

Section
6.3.            Accounts
and Reports.

The Company shall maintain a standard system of
accounting in accordance with generally accepted accounting principles
consistently applied (“GAAP”) and provide, at its sole expense, to the Secured
Party the following:

(a)             
as soon as available, a copy of any notice or other communication alleging any
nonpayment or other material breach or default, or any foreclosure or other
action respecting any material portion of its assets and properties, received
respecting any of the indebtedness of the Company in excess 

of $500,000 (other than the Obligations),
or any demand or other request for payment under any guaranty, assumption, purchase
agreement or similar agreement or arrangement respecting the indebtedness or
obligations of others in excess of $500,000; and

(b)             
within fifteen (15) days after the making of each submission or filing, a
copy of any report, financial statement, notice or other document, whether
periodic or otherwise, submitted to the shareholders of the Company, or
submitted to or filed by the Company with any governmental authority involving
or affecting (i) the Company that could reasonably be expected to have a
Material Adverse Effect; (ii) the Obligations; (iii) any part of the
Pledged Property; or (iv) any of the transactions contemplated in this
Agreement or the Loan Instruments (except, in each case, to the extent any such
submission, filing, report, financial statement, notice or other document is
posted on EDGAR Online).

Section
6.4.            Maintenance
of Books and Records; Inspection.

The Company shall maintain its books, accounts and
records in accordance with GAAP, and permit the Secured Party, his employees
and any professionals designated by the Secured Party in writing, at any time
during normal business hours and upon reasonable notice to visit and inspect
any of its properties (including but not limited to the collateral security
described in the Transaction Documents and/or the Loan Instruments), corporate
books and financial records, and to discuss its accounts, affairs and finances
with any employee, officer or director thereof (it being agreed that, unless an
Event of Default shall have occurred and be continuing, there shall be no more
than two (2) such visits and inspections in any Fiscal Year).

Section
6.5.            Maintenance
and Insurance.

(a)             
The Company shall maintain or cause to be maintained, at its own expense, all
of its material assets and properties in good working order and condition,
ordinary wear and tear excepted, making all necessary repairs thereto and
renewals and replacements thereof.

(b)             
The Company shall maintain or cause to be maintained, at its own expense,
insurance in form, substance and amounts (including deductibles), which the
Company deems reasonably necessary to the Company’s business, (i) adequate
to insure all assets and properties of the Company of a character usually
insured by persons engaged in the same or similar business against loss or
damage resulting from fire or other risks included in an extended coverage
policy; (ii) against public liability and other tort claims that may be
incurred by the Company; (iii) as may be required by the Transaction
Documents and/or applicable law and (iv) as may be reasonably requested by
Secured Party, all with financially sound and reputable insurers.

Section
6.6.            Contracts
and Other Collateral.

The Company shall perform all of its obligations under
or with respect to each instrument, receivable, contract and other intangible
included in the Pledged Property to which the Company is now or hereafter will
be party on a timely basis and in the manner therein required, including, without
limitation, this Agreement, except to the extent the failure to so perform such
obligations would not reasonably be expected to have a Material Adverse Effect.

Section
6.7.            Defense
of Collateral, Etc.

The Company shall defend and enforce its right, title
and interest in and to any part of:  (a) the Pledged Property; and
(b) if not included within the Pledged Property, those assets and
properties whose loss would reasonably be expected to have a Material Adverse
Effect, each against all manner of claims and demands on a timely basis to the
full extent permitted by applicable law (other than any such claims and demands
by holders of Permitted Liens).

Section
6.8.            Taxes
and Assessments.

The Company shall (a) file all material tax returns
and appropriate schedules thereto that are required to be filed under
applicable law, prior to the date of delinquency (taking into account any
extensions of the original due date), (b) pay and discharge all material
taxes, assessments and governmental charges or levies imposed upon the Company,
upon its income and profits or upon any properties belonging to it, prior to
the date on which penalties attach thereto, and (c) pay all material
taxes, assessments and governmental charges or levies that, if unpaid, might
become a lien or charge upon any of its properties; provided, however, that the Company in good faith may
contest any such tax, assessment, governmental charge or levy described in the
foregoing clauses (b) and (c) so long as appropriate reserves are maintained
with respect thereto if and to the extent required by GAAP.

Section
6.9.            Compliance
with Law and Other Agreements.

The Company shall maintain
its business operations and property owned or used in connection therewith in
compliance with (a) all applicable federal, state and local laws,
regulations and ordinances governing such business operations and the use and
ownership of such property, and (b) all agreements, licenses, franchises,
indentures and mortgages to which the Company is a party or by which the
Company or any of its properties is bound, except where the failure to so
comply would not reasonably be expected to have a Material Adverse Effect.

Section
6.10.          Notice of
Default.

The Company shall give written notice to the Secured
Party of the occurrence of any Event of Default.

Section
6.11.          Notice of
Litigation.

The Company shall give notice, in writing, to the
Secured Party of (a) any actions, suits or proceedings wherein the amount
at issue is in excess of $250,000, instituted by any persons against the
Company, or affecting any of the assets of the Company, and (b) any
dispute, not resolved within fifteen (15) days of the commencement thereof,
between the Company on the one hand and any governmental or regulatory body on
the other hand, which might reasonably be expected to have a Material Adverse
Effect on the business operations or financial condition of the Company.

Section
6.13.          Future
Subsidiaries.

If the Company shall hereafter create or acquire any
subsidiary, simultaneously with the creation or acquisition of such subsidiary,
the Company shall cause such subsidiary to grant to the Secured Party a
security interest of the same tenor as created under this Agreement.

ARTICLE
7.

NEGATIVE COVENANTS

The
Company covenants and agrees that, from the date hereof until the Obligations
have been fully paid and satisfied, the Company shall not, unless the Secured
Party shall consent otherwise in writing:

Section
7.1.            Liens
and Encumbrances.

Directly or indirectly make, create, incur, assume or
permit to exist any Lien in, to or against any part of the Pledged Property
other than Permitted Liens.

Section
7.2.            Restriction
on Redemption and Cash Dividends

Directly or indirectly, redeem, repurchase or declare
or pay any cash dividend or distribution on its capital stock without the prior
express written consent of the Secured Party.

Section
7.3.            Incurrence
of Indebtedness.

Directly or indirectly, incur or guarantee, assume or
suffer to exist any indebtedness, other than the indebtedness evidenced by the
Convertible Debentures and other Permitted Indebtedness.  “Permitted
Indebtedness” means: (i) indebtedness evidenced by Convertible Debentures;
(ii) indebtedness described on the Disclosure Schedule to the Note and Warrant
Purchase Agreement; (iii) indebtedness incurred solely for the purpose of
financing the acquisition or lease of any equipment by the Company, including
capital lease obligations with no recourse other than to such equipment; (iv)
indebtedness (A) the repayment of which has been subordinated to the payment of
the Convertible Debentures on terms and conditions acceptable to the Secured
Party, including with regard to interest payments and repayment of principal,
(B) which does not mature or otherwise require or permit redemption or
repayment prior to or on the 91st day after the maturity date of any Convertible Debentures
then outstanding; and (C) which is not secured by any assets of the Company;
(v) indebtedness solely between the Company and/or one of its domestic
subsidiaries, on the one hand, and the Company and/or one of its domestic
subsidiaries, on the other which indebtedness is not secured by any assets of
the Company or any of its subsidiaries, provided that (x) in each case a
majority of the equity of any such domestic subsidiary is directly or
indirectly owned by the Company, such domestic subsidiary is controlled by the
Company and such domestic subsidiary has executed a security agreement in the form
of this Agreement and (y) any such loan shall be evidenced by an intercompany
note that is pledged by the Company or its subsidiary, as applicable, as
collateral pursuant to this Agreement; (vi) reimbursement obligations in
respect of letters of credit issued for the account of the Company or any of
its subsidiaries for the purpose of securing performance obligations of the
Company or its subsidiaries incurred in the ordinary course of business so long
as the aggregate face amount of all such letters of credit does not exceed
$500,000 at any one time; and (vii) renewals, extensions and refinancing of any
indebtedness described in clauses (i) or (iii) of this subsection.

Section
7.4.            Places
of Business.

Change the location of its chief place of business,
chief executive office or any place of business disclosed to the Secured Party,
unless such change in location is to a different location within the United
States and the Company provides notice to the Secured Party of new location
within 10 days’ of such change in location.

ARTICLE
8.

MISCELLANEOUS

Section
8.1.            Notices.

All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as duly given on:  (a) the date of delivery, if
delivered in person or by nationally recognized overnight delivery service or
(b) five (5) days after mailing if mailed from within the
continental United States by certified mail, return receipt requested to the
party entitled to receive the same:

	
  If to the Secured Party:

  	
   

  	
  John Fife

  	
   

  	
   

  
	
   

  	
   

  	
  303 East Wacker Drive, Suite 311

  	
   

  	
   

  
	
   

  	
   

  	
  Chicago, IL 60657

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:            (312)565-1569

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:               (312)819-9701

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Merrill E. Weber, Esq.

  	
   

  	
   

  
	
   

  	
   

  	
  303 East Wacker Drive, Suite 311

  	
   

  	
   

  
	
   

  	
   

  	
  Chicago, IL 60601

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:            (773)406-2386

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:               (312)819-9701

  	
   

  	
   

  

 

 

	
  And if to the Company:

  	
   

  	
  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:

  	
   

  	
  John Hart, Esq.

  	
   

  	
   

  
	
   

  	
   

  	
  514 Via de la Valle, Suite 200

  	
   

  	
   

  
	
   

  	
   

  	
  Solana Beach, CA 92075

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:            858-794-8800

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:               858-794-8811

  	
   

  	
   

  

 

Any party may change his or its address by giving
notice to the other party stating his or its new address.  Commencing on the tenth (10th) day after the giving of such
notice, such newly designated address shall be such party’s address for the
purpose of all notices or other communications required or permitted to be
given pursuant to this Agreement.

Section
8.2.            Severability.

If any provision of this Agreement shall be held
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.

Section
8.3.            Expenses.

In the event of an Event of Default, the Company will
pay to the Secured Party the amount of any and all reasonable out-of-pocket
expenses, including the reasonable fees and expenses of his counsel, which the
Secured Party may incur in connection with:  (i) the custody or
preservation of, or the sale, collection from, or other realization upon, any
of the Pledged Property; (ii) the exercise or enforcement of any of the rights
of the Secured Party hereunder or (iii) the failure by the Company to
perform or observe any of the provisions hereof.

Section
8.4.            Waivers,
Amendments, Etc.

The Secured Party’s delay or failure at any time or
times hereafter to require strict performance by Company of any undertakings,
agreements or covenants shall not waive, affect, or diminish any right of the
Secured Party under this Agreement to demand strict compliance and performance
herewith.  Any waiver by the Secured Party of any Event of Default shall
not waive or affect any other Event of Default, whether such Event of Default
is prior or subsequent thereto and whether of the same or a different
type.  None of the undertakings, agreements and covenants of the Company
contained in this Agreement, and no Event of Default, shall be deemed to have
been waived by the Secured Party, nor may this Agreement be amended, changed or
modified, unless such waiver, amendment, change or modification is evidenced by
an instrument in writing specifying such waiver, amendment, change or
modification and signed by the Secured Party in the case of any such waiver,
and signed by the Secured Party and the Company in the case of any such
amendment, change or modification.

Section
8.5.            Continuing
Security Interest; Partial Release.

(a)  This Agreement shall create a continuing
security interest in the Pledged Property and shall: (i) remain in full
force and effect until payment or conversion in full of the Convertible
Debentures; (ii) be binding upon the Company and its successors and
assigns; and (iii) inure to the benefit of the Secured Party 

and his successors and assigns.  Upon the payment
or satisfaction in full or conversion in full of the Convertible Debentures,
this Agreement and the security interest created hereby shall terminate, and,
in connection therewith, the Company shall be entitled to the return, at its
expense, of such of the Pledged Property as shall not have been sold in
accordance with Section 5.2 hereof or otherwise applied pursuant to the
terms hereof and the Secured Party shall deliver to the Company such documents as
the Company shall reasonably request to evidence such termination.

(b)          
Effective upon the closing of a disposition of any Pledged Property, provided
the Secured Party consents in writing prior to such disposition or such
disposition is made in the ordinary course of business, the security interest
granted hereunder in the Pledged Property so disposed of shall terminate and
the Secured Party shall deliver such documents as the Company shall reasonably
request to evidence such termination; provided, however, the security interest
granted hereunder in all remaining Pledged Property shall remain in full force
and effect.

Section
8.6.            Independent
Representation.

Each party hereto acknowledges and agrees that he or
it has received or has had the opportunity to receive independent legal counsel
of his or its own choice and that he or it has been sufficiently apprised of
his or its rights and responsibilities with regard to the substance of this
Agreement.

Section
8.7.            Applicable
Law:  Jurisdiction.

This Agreement shall be
governed by and interpreted in accordance with the laws of the State of
Illinois without regard to the principles of conflict of laws.  The
parties further agree that any action between them shall be heard in Cook
County, Illinois, and expressly consent to the jurisdiction and venue of the
State Courts of Illinois, sitting in Cook County and the United States District
Court for the Northern District of Illinois sitting in Chicago, Illinois for
the adjudication of any civil action asserted pursuant to this Paragraph.

Section
8.8.            Waiver
of Jury Trial.

AS A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER
INTO THIS AGREEMENT AND TO MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY,
THE COMPANY HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED
TO THIS TRANSACTION.

Section
8.9.            Entire
Agreement.

This Agreement constitutes the entire agreement among
the parties and supersedes any prior agreement or understanding among them with
respect to the subject matter hereof.

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

IN
WITNESS WHEREOF, the parties hereto have executed this
Security Agreement as of the date first above written.

 

	
  

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
  OPEN ENERGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: David Saltman

  
	
   

  	
   

  	
  Title:  Chief Executive Officer

  

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Security Agreement as of the date first above written. 

	
  

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
  Connect Renewable Energy, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: David Saltman

  
	
   

  	
   

  	
  Title:  Chief Executive Officer

  

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Security Agreement as of the date first above written. 

	
  

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
  Solar Roofing Systems, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: David Saltman

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Security Agreement as of the date first above written. 

	
  

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
  WaterEye Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: David Saltman

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Security Agreement as of the date first above written.

	
  

  	
   

  	
  SECURED PARTY:

  
	
   

  	
   

  	
  JOHN FIFE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

SCHEDULE I

LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS;
STATES OF

ORGANIZATION

	
  Company’s
  Name

  	
   

  	
  State of

  Organization

  	
   

  	
  Employer

  ID

  	
   

  	
  Organizational

  ID

  
	
  Connect
  Renewable Energy, Inc.

  	
   

  	
  Nevada

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Solar Roofing
  Systems, Inc.

  	
   

  	
  Ontario, Canada

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WaterEye
  Corporation

  	
   

  	
  Nevada

  	
   

  	
   

  	
   

  	
   

  

 

EXHIBIT A

DEFINITION OF PLEDGED PROPERTY

Effective as of the date it receives Holder’s Note
Conversion Letter, for the purpose of securing prompt and complete payment and
performance by the Company of all of the Obligations, the Company
unconditionally and irrevocably grants to the Secured Party a continuing
security interest in and to, and lien upon, the following Pledged Property of
the Company:

(a)          
all goods of the Company, including, without limitation, machinery, equipment,
furniture, furnishings, fixtures, signs, lights, tools, parts, supplies and
motor vehicles of every kind and description, now or hereafter owned by the
Company or in which the Company may have or may hereafter acquire any interest,
and all replacements, additions, accessions, substitutions and proceeds
thereof, arising from the sale or disposition thereof, and where applicable,
the proceeds of insurance and of any tort claims involving any of the
foregoing;

(b)          
all inventory of the Company, including, but not limited to, all goods, wares,
merchandise, parts, supplies, finished products, other tangible personal
property, including such inventory as is temporarily out of Company’s custody
or possession and including any returns upon any accounts or other proceeds,
including insurance proceeds, resulting from the sale or disposition of any of
the foregoing;

(c)          
all contract rights and general intangibles of the Company, including, without
limitation, goodwill, trademarks, trade styles, trade names, leasehold
interests, partnership or joint venture interests, patents and patent
applications, copyrights, deposit accounts whether now owned or hereafter created;

(d)          
all documents, warehouse receipts, instruments and chattel paper of the Company
whether now owned or hereafter created;

(e)          
all accounts and other receivables, instruments or other forms of obligations
and rights to payment of the Company (herein collectively referred to as “Accounts”),
together with the proceeds thereof, all goods represented by such Accounts and
all such goods that may be returned by the Company’s customers, and all
proceeds of any insurance thereon, and all guarantees, securities and liens
which the Company may hold for the payment of any such Accounts including,
without limitation, all rights of stoppage in transit, replevin and reclamation
and as an unpaid vendor and/or lienor;

(f)           
to the extent assignable, all of the Company’s rights under all present and
future authorizations, permits, licenses and franchises issued or granted in
connection with the operations of any of its facilities;

(g)          
all equity interests, securities or other instruments in other companies,
including, without limitation, any subsidiaries, investments or other entities
(whether or not controlled); and

(h)          
all products and proceeds (including, without limitation, insurance proceeds)
from the above-described Pledged Property.

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