Document:

Exhibit 10.4

 

SETTLEMENT
AND GENERAL RELEASE AGREEMENT AMONG FORMER SRS STOCKHOLDERS AND OEC

 

This Settlement and
General Release Agreement (“Agreement”)
is entered into as of March 7, 2008 (the “Effective Date”) by Open Energy
Corporation (“OEC”), formerly known as Barnabus Energy, Inc., and the Stockholders
(as defined in the SPA referred to below) with reference to the following
facts:

 

RECITALS

 

	
   

  	
  A.

  	
  A
  Stock Purchase Agreement dated as of February 8, 2006 was entered into
  among OEC, 2093603 Ontario, Inc., Solar Roofing Systems, Inc.
  (“SRS”) and the Stockholders (the “SPA”). All initial capitalized terms used
  in this Agreement that are not otherwise defined herein are accorded the
  definitions of the SPA or share provisions for the Exchangeable Shares, as applicable.

  
	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Under
  the SPA, the Stockholders were to be paid Cash Consideration and Share
  Consideration for the purchase of their interest in SRS.

  
	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  At
  the Closing of the SPA, all of the Cash Consideration and a portion of the
  Share Consideration (a combination of 3,182,152 OEC Common Stock and
  Exchangeable Shares) was delivered to the Stockholders in accordance with the
  provisions of the SPA.

  
	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  The
  remainder of the Share Consideration (a combination of 3,182,152 OEC Common
  Stock and Exchangeable Shares) was to be delivered to the Stockholders
  subsequent to the Closing, subject to certain terms and conditions.

  
	
   

  	
   

  	
   

  
	
   

  	
  E.

  	
  A
  Registration Rights Agreement (the “Registration Rights Agreement”) was
  entered into between OEC and Canadian Stockholders, and an Exchange Rights
  Agreement (the “Exchange Rights Agreement”) and a Support Agreement (the
  “Support Agreement”) was entered into by OEC, 2093603 Ontario Inc. and
  Canadian Stockholders for the benefit of such Stockholders, on the closing of
  the transactions contemplated in the SPA. No Share Consideration was
  registered pursuant to the terms and conditions specified in the SPA and the
  Registration Rights Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
  F.

  	
  OEC
  and the Stockholders disagree regarding their respective rights and liabilities
  related to the SPA other matters.

  
	
   

  	
   

  	
   

  
	
   

  	
  G.

  	
  The
  parties desire to avoid the expense of litigating their differences and to
  resolve all outstanding issues between them on the terms and conditions
  contained in this Agreement.

  

 

 

NOW, THEREFORE, in consideration
of the mutual recitals, covenants, and conditions in this Agreement, and for
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

AGREEMENT

 

1. Effective
Date. This Agreement shall be valid and binding among all parties as of the
Effective Date.

 

2. Obligations
of OEC.

 

	
   

  	
  a.

  	
  OEC
  shall issue certified checks or wire transfers for full payment, including
  interest, of stockholder loans payable to certain of the Stockholders in the
  amounts and on the dates as more particularly set out in Schedule A hereto.
  Upon receipt by the Stockholders listed on Schedule A of the funds described
  on Schedule A, OEC shall be released in full from all liabilities pursuant to
  any loan between OEC and any Stockholder.

  
	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
  OEC
  shall issue a certified check or wire transfer on the Effective Date to Jim
  Chaney for USD$72,000 for services rendered.

  
	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
  On
  the Effective Date, OEC shall issue or instruct the OEC transfer agent to
  issue additional Share Consideration to the Stockholders as more particularly
  set out in Schedule B hereto.

  
	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
  On
  the Effective Date, OEC shall pay in full all outstanding amounts, including
  principal and accrued and unpaid interest in respect of the Bank of Montreal
  loan facility of SRS (the “Bank Loan”) and, following the Effective Date, OEC
  will use commercially reasonable efforts to obtain as soon as reasonably
  practicable the Bank’s acknowledgement that all liabilities under the Bank
  Loan have been satisfied and that as a result, the guarantees of such
  indebtedness by Norman Dodd, Robert Kafato and William Chislett have
  similarly been released or cancelled.

  
	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
  OEC
  shall at its sole expense file a registration statement (the “Registration
  Statement”) with the SEC prior to May 31, 2008 to qualify or register
  all of the shares of Registrable Stock (which has the meaning ascribed to it
  in the Registration Rights Agreement), the effect of which Registration
  Statement is to enable the shares of Registrable Stock, on their issue, to be
  immediately and freely traded thereafter in the United States on all stock
  exchanges and quotation systems on which outstanding common stock of OEC (or
  such other shares or securities derived 

  

 

 

	
   

  	
   

  	
  therefrom)
  have been listed by OEC and remain listed and are quoted or posted for
  trading at such time.

  
	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
  In
  the event that the aforesaid Registration Statement is not filed with the SEC
  on or before May 31, 2008, OEC shall pay to the Canadian Stockholders as
  liquidated damages a total sum of USD $20,000 pro-rata on or before the 5th
  day of the following month, and shall similarly pay as liquidated damages the
  same total sum of USD $20,000 in respect of each month thereafter that the
  Registration Statement is not filed until the month in which the Registration
  Statement is so filed. For the avoidance of doubt, if the Registration
  Statement is filed during the month of June 2008 (and not sooner), only
  one aggregate payment of USD $20,000 would be payable hereunder.

  
	
   

  	
   

  	
   

  
	
   

  	
  g.

  	
  OEC
  agrees to use all commercially reasonable efforts to ensure that (a) the
  Registration Statement is effective on or prior to August 31, 2008 and
  (b) that the Registration Statement is kept continuously effective
  thereafter until (i) the date that all Registrable Stock has been sold,
  and (ii) the later of (A) August 31, 2010 and (B) 90 days
  following the fiscal year end of OEC occurring in 2010. OEC will forthwith
  notify Norman Dodd upon the Registration Statement becoming effective, or
  ceasing to be effective, as applicable, or if OEC reasonably believes that
  the Registration Statement will not be effective by August 31, 2008 or
  will thereafter cease to be effective. For purposes hereof, “commercially
  reasonable efforts” shall require OEC to respond to SEC comment letters
  within 20 days of OEC’s receipt thereof.

  
	
   

  	
   

  	
   

  
	
   

  	
  h.

  	
  OEC
  will at its sole expense forthwith take all necessary actions to enable U.S.
  Stockholders to transfer any OEC shares held by them, including directing its
  legal counsel to provide, in accordance with applicable state and federal
  securities laws, a legal opinion to OEC’s transfer agent with respect to the
  transfer of any OEC shares by the Stockholders in compliance with an
  exemption from registration, including transfers permitted under Rule 144
  and Rule 144(k), or any successor statute or rule. OEC thereafter
  agrees, at its sole expense, to take all such actions necessary to enable any
  Stockholder wishing to transfer OEC shares to do so under Rule 144 and
  Rule 144(k), or any successor statute or rule, subject to applicable
  restrictions under such statutes or rules or under section 8 of the
  Registration Rights Agreement, as applicable, and such Stockholder will be
  deemed at the time of transfer to have made the representation and warranty
  set out in Section 3(vii) hereof to OEC.

  
	
   

  	
   

  	
   

  
	
   

  	
  i.

  	
  Effective
  as of the Effective Date, OEC will reduce the current USD $1.50 per share
  exercise price of the OEC stock options issued to Norman Dodd, Don Rogers and
  Howard Gomes (the “Repriced Stock Options”) to the exercise price
  contemplated in Schedule C.

  
	
   

  	
   

  	
   

  
	
   

  	
  j.

  	
  Effective
  as of the Effective Date, OEC will extend the expiry date of the Repriced
  Stock Options, as well as the expiry date of other options granted to such
  persons as more particularly described in Schedule D (the “Other Stock
  Options”), from three months to 6 months after their respective termination
  of employment with OEC or its affiliates. For purposes hereof, Don Rogers and
  Norman Dodd will be deemed to have terminated their employment on
  January 31, 2008.

  

 

 

	
   

  	
  k.

  	
  On
  the Effective Date, OEC shall reimburse up to Cdn$20,000 plus applicable
  taxes in legal costs actually incurred by the Stockholders in connection with
  the settlement transaction contemplated herein.

  
	
   

  	
   

  	
   

  
	
   

  	
  l.

  	
  OEC agrees that it
  will, within the time periods specified in the share provisions for the
  Exchangeable Shares, exercise the Liquidation Call Right, Redemption Call
  Right or Retraction Call Right (as applicable) upon such call rights becoming
  available to it, provided that OEC determines, acting reasonably, that the
  resulting tax consequences to OEC or its affiliates of exercising such call
  rights are no less favorable than not exercising such call rights.

  
	
   

  	
   

  	
   

  
	
   

  	
  m.

  	
  On the Effective Date,
  counsel to the Stockholders shall deliver a legal opinion to OEC concerning
  the tax consequences of the immediately preceding paragraph.

  

 

3. Representations
and Warranties. To induce each other to enter into this Agreement, each
party represents and warrants as follows:

 

(i) It is the sole
and lawful owner of all right, title, and interest in and to each claim or
other matter that such party releases in this Agreement and has not assigned or
transferred, or purported to assign or transfer, to any entity, any claim or
other matter released, waived, or dismissed in this Agreement; and each
Stockholder warrants that, to his knowledge, no third party claim is pending or
threatened against OEC, and to his or her knowledge, no basis for any such
claim exists;

 

(ii) There is no
other person or entity from whom a release or waiver should be obtained to
fully and completely resolve (a)  the dispute among the parties, or (b) any
other claims, rights, demands, liabilities, and actions released in this
Agreement;

 

(iii) It has not
filed, and shall not file, any litigation on the dispute, or any other facts,
events, or omissions (actual or alleged) that relate, either directly or
indirectly, to the dispute, provided the other party fulfills its obligations
under this agreement.

 

(iv) Neither
it nor any of its officers, agents, partners, employees, representatives,
insurers, or attorneys has made any statement or representation to any other
party regarding any fact relied on in entering into this Agreement, and it does
not rely on any statement, representation, or promise of any other party or any
other party’s officers, agents, partners, employees, representatives, insurers,
or attorneys in executing this Agreement, or in making the settlement provided
for in this Agreement, except as expressly stated in this Agreement;

 

(v) It
has made any investigation of the facts pertaining to this settlement and this
Agreement and of all matters pertaining to them, as it deems necessary;

 

(vi) 
All representations and warranties in this Agreement are true and correct, as
of the date of this Agreement and shall survive the execution of this
Agreement.

 

(vii) Each
U.S. Stockholder represents and warrants that he is not, and has not been
during the preceding three (3) months, an “affiliate” of OEC as that term
is defined in Rule 144, and has beneficially owned the shares of OEC for a
period of at least six months computed in 

 

 

accordance
with Rule 144 (other than shares acquired pursuant to this
Agreement).  Each U.S. Stockholder is
unaware of any circumstances indicating that he is or has been an underwriter
with respect to the shares of OEC.

 

4. Waiver and
Release. Each party acknowledges and warrants that this release is
voluntary and is not made under threat or duress. Each party shall cooperate in
the execution of any other document necessary to effect the intention of this
release. Each party releases the other parties as follows:

 

a. Release by Stockholders.
Except in respect of its rights arising under or pursuant to (i) this
Agreement, the Registration Rights Agreement (except to the extent specifically
amended by the terms of this Agreement), the Exchange Rights Agreement, the
Support Agreement, the share provisions for the Exchangeable Shares and any
related documents, (ii) any individual employment agreements between OEC
and Stockholders and (iii) the New Stock Options and Other Stock Options,
and except for any right to be indemnified by the Corporation pursuant to the
by-laws or other constating documents of the Corporation or otherwise, or
pursuant to any insurance policy, in connection with having served as a
director and officer of the Corporation, each individual Stockholder releases
and discharges OEC and its predecessors in interest, subsidiaries, affiliates,
officers, directors, stockholders, option holders, employees, agents,
executors, administrators, representatives, successors, partners,
representatives, attorneys, principals, associates, successors, and assigns
(collectively, “OEC Group”), and each of them, from any and all claims,
demands, liabilities, actions, and causes of action of any kind or character,
whether fixed or contingent, against the OEC Group, including without
limitation any claims arising from or relating to the transactions covered by
the SPA or any indebtedness related thereto that the Stockholder has or
hereafter may have or claim or hereafter may claim to have against the OEC Group.

 

b. Release by OEC.
Except for the Stockholder obligations under this Agreement, the Registration
Rights Agreement (except to the extent specifically amended by the terms of
this Agreement), the Exchange Rights Agreement, the Support Agreement, the
share provisions for the Exchangeable Shares and any related documents, OEC
releases and discharges each individual Stockholder his predecessors in
interest, subsidiaries, affiliates, partners, agents, representatives,
attorneys, principals, associates, employees, successors, and assigns, and each
of them (collectively, “Stockholder Group”), from any and all claims, demands,
liabilities, actions, and causes of action of any kind or character, whether
fixed or contingent, against the Stockholder Group, including without
limitation any claims arising from or relating to the transactions covered by
the SPA that OEC has or hereafter may have or claim to have against each
Stockholder and their respective Stockholder Group.

 

5. Unknown or
Unsuspected Consequences. The parties understand and acknowledge that Section 5
of this Agreement applies to and includes all unknown or unsuspected
consequences or results arising from or relating to the transactions,
occurrences, or agreements referred to in those Sections.  OEC and the Stockholders on behalf of
themselves and the OEC Group and Stockholder Group, respectively, represent and
warrant that they have read the contents of California Civil Code §1542, which
provides as follows:

 

 

“A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release,
which if known by him or her must have materially affected his or her
settlement with the debtor.”

 

OEC AND EACH STOCKHOLDER,
FOR THEMSELVES AND THE OEC GROUP AND STOCKHOLDER GROUP, RESPECTIVELY, EXPRESSLY
WAIVE ANY AND ALL RIGHTS AND BENEFITS UNDER CALIFORNIA CIVIL CODE §1542.

 

6. No Admission
of Liability. Except as set out in the recitals hereto, none of the parties
admits, expressly or impliedly, any fact or liability with respect to any
matter relating to the Share Purchase Agreement or disputes except as expressly
set forth in this Agreement. The parties have entered into this Agreement
solely for the purpose of compromise and settlement and to avoid the further
expense, delay, and risk of litigation.

 

7. Confidentiality.
This Agreement and its terms are to be treated confidentially. The parties
shall not disclose these terms to anyone except to the extent disclosure is
necessary for (i) properly filing income tax returns, (ii) obtaining
professional liability insurance, (iii) meeting OEC’s reporting
obligations under U.S. federal or state securities laws, or (iv) as
otherwise required by legal process. Except as permitted herein, the parties
shall be allowed to state only that the claims described in the recitals in
this Agreement, have been settled and that the settlement terms are
confidential.

 

8. Recitals.
No promise, inducement, or representation other than as set forth in this
Agreement has been made, offered, or relied on, and the terms of this Agreement
are contractual and not a mere recital. The recitals to this Agreement are true
and correct, and are incorporated in and made a part of it.

 

9. Duty of
Cooperation. The parties shall at all times fully cooperate with each other
and shall cause their respective agents and attorneys to cooperate in a prompt
and timely manner in connection with the performance of all obligations of the
parties under this Agreement. The parties shall execute and deliver such
additional documents or certificates, and take such further action, as may be
necessary or otherwise reasonably requested of them to fully perform the provisions
of this Agreement.

 

10. Amendment.
No amendment, modification, or addition to this Agreement or to any attached
exhibit shall be valid unless it is in a writing executed by the parties.

 

11. Successor
and Assigns. This Agreement shall bind and inure to the benefit of each
party and each party’s respective successors, assigns, heirs, and personal
representatives.

 

12. Waiver. The
parties shall not be deemed to have waived any of their respective rights under
this Agreement unless such waiver is in a writing signed by the party claimed
to have waived that right, nor shall a written waiver by a party be deemed a
subsequent waiver of an additional right.

 

 

13. Entire
Agreement. This Agreement contains the entire agreement of the parties with
respect to the dispute, and no representations, inducements, promises, or
agreements, whether oral or written, not expressly set forth in this Agreement
or the attached exhibits shall have any force or effect.

 

14. Headings.
Headings in this Agreement are for convenience only and shall not be used to
interpret or construe the provisions of this Agreement.

 

15. Governing
Law. California law shall govern the validity, interpretation, operation,
and enforcement of each provision in this Agreement.

 

16. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which shall together constitute one and
the same document.

 

17. Survival.
All warranties and representations of each party shall survive termination of
this Agreement.

 

18. Time.
Time is of the essence to each provision of this Agreement.

 

19. Neutral
Interpretation. This Agreement is the product of the parties’ negotiations
and shall be interpreted in a neutral manner. Any presumption regarding the
construction or interpretation for or against any party by reason of that party
having drafted any or all of this Agreement shall not apply.

 

20. Resignation
by Dodd. Effective the Effective Date, Norman Dodd will resign as a
director OEC.

 

IN WITNESS WHEREOF, the
parties to this Agreement have caused it to be executed as of the date first
written above.

 

 

	
  Date: 

  	
  ,
  2008

  	
   

  	
  OPEN ENERGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
    David
  Field, President

  

 

[NEXT
PAGE: SIGNATURES OF STOCKHOLDERS]

 

 

SCHEDULE
A

LOANS

 

Payable on the Effective
Date:

 

	
   

  	
   

  	
  Principal and Interest

  	
   

  
	
  Creditor

  	
   

  	
  (as at March 6, 2008)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Norman Dodd

  	
   

  	
  Cdn$

  	
  51,494.89

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Robert Kafato

  	
   

  	
  Cdn$

  	
  78,310.03

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  William Chislett

  	
   

  	
  Cdn$

  	
  38,356.21

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Geocalm Inc.

  	
   

  	
  Cdn$

  	
  30,829.89

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Geocalm Inc.

  	
   

  	
  US$

  	
  96,009.65

  	
   

  

 

Payable on April 15,
2008:

 

	
   

  	
   

  	
  Principal and Interest

  	
   

  
	
  Creditor

  	
   

  	
  (as at April 15, 2008)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Geocalm Inc.

  	
   

  	
  USD$

  	
  68,510.17

  	
   

  
					

 

Payable on May 15,
2008:

 

	
   

  	
   

  	
  Principal and Interest

  	
   

  
	
  Creditor

  	
   

  	
  (as at May 15, 2008)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Geocalm Inc.

  	
   

  	
  USD$ 

  	
  69,504.62

  	
   

  
					

 

 

SCHEDULE
B

ADDITIONAL
STOCK TO BE ISSUED TO STOCKHOLDERS

 

	
  Exchangeable Shares:

  	
   

  	
  Robert
  Kafato

  	
   

  	
  597,469

  	
   

  
	
   

  	
   

  	
  Norman
  Dodd

  	
   

  	
  577,394

  	
   

  
	
   

  	
   

  	
  William
  Chislett

  	
   

  	
  152,201

  	
   

  
	
   

  	
   

  	
  Donald
  Rogers

  	
   

  	
  147,020

  	
   

  
	
   

  	
   

  	
  Paul
  Cowley

  	
   

  	
  79,339

  	
   

  
	
   

  	
   

  	
  Howard
  Gomes

  	
   

  	
  60,891

  	
   

  
	
   

  	
   

  	
  Margreg
  Ltd.

  	
   

  	
  48,737

  	
   

  
	
   

  	
   

  	
  Raymond
  Laaly

  	
   

  	
  35,211

  	
   

  
	
   

  	
   

  	
  Phil
  Kaszuba

  	
   

  	
  32,383

  	
   

  
	
   

  	
   

  	
  Keith
  Knights

  	
   

  	
  23,579

  	
   

  
	
   

  	
   

  	
  Lois
  Holmes

  	
   

  	
  22,031

  	
   

  
	
   

  	
   

  	
  Dodd
  Family Trust

  	
   

  	
  20,075

  	
   

  
	
   

  	
   

  	
  Krino
  Kafato

  	
   

  	
  19,873

  	
   

  
	
   

  	
   

  	
  1594505
  Ontario Inc.

  	
   

  	
  15,112

  	
   

  
	
   

  	
   

  	
  Craig
  Brown

  	
   

  	
  1,619

  	
   

  
	
   

  	
   

  	
  Allan
  Kling

  	
   

  	
  1,619

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  1,834,554

  	
   

  

 

	
  OEC Common Stock:

  	
   

  	
  Heshmat
  Laaly

  	
   

  	
  167,673

  	
   

  
	
   

  	
   

  	
  Jim
  Chaney

  	
   

  	
  60,449

  	
   

  
	
   

  	
   

  	
  Bahram
  Raeen

  	
   

  	
  30,589

  	
   

  
	
   

  	
   

  	
  Stanley
  Levy

  	
   

  	
  30,224

  	
   

  
	
   

  	
   

  	
  Jahangir
  Noorvash

  	
   

  	
  26,600

  	
   

  
	
   

  	
   

  	
  Sean
  Noorvash

  	
   

  	
  26,600

  	
   

  
	
   

  	
   

  	
  Craig
  Suarez

  	
   

  	
  25,907

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  368,040

  	
   

  

 

 

SCHEDULE
C

REPRICED
STOCK OPTIONS

 

	
  Optionee

  	
   

  	
  Number of Repriced

  Stock Options

  	
   

  	
  New Exercise Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Norman Dodd

  	
   

  	
  200,000

  	
   

  	
  US$

  	
  0.40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Don Rogers

  	
   

  	
  150,000

  	
   

  	
  US$

  	
  0.40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Howard Gomes

  	
   

  	
  75,000

  	
   

  	
  US$

  	
  0.40

  	
   

  

 

 

SCHEDULE
D

OTHER
STOCK OPTIONS

 

	
  Optionee

  	
   

  	
  Number of Stock

  Options

  	
   

  	
  Exercise Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Don Rogers

  	
   

  	
  150,000

  	
   

  	
  US$

  	
  0.48Exhibit 10.5

 

EXTENSION
AGREEMENT

 

EXTENSION AGREEMENT, dated of as March 17,
2008, by and between OPEN ENERGY CORPORATION (the
“Company”), and YA  GLOBAL INVESTMENTS, L.P. (formerly, CORNELL CAPITAL PARTNERS, LP) (“YA Global”).  All capitalized terms used herein shall have
the respective meanings assigned thereto in the Transaction Documents (as
defined below) unless otherwise defined herein.

 

W
I T N E S S E T H:

 

WHEREAS, the Company and YA Global have
entered into certain financing arrangements set forth on Schedule A
attached hereto and referred to herein as the “Transaction Documents”  pursuant to which, YA Global is the holder of
the Secured Convertible Debenture (No. OEGY-2-1) in the principal amount
of $3,000,000 (the “Debenture”) issued by the Company on March 29,
2007.

 

WHEREAS, the Maturity Date of the Debenture is March 39, 2008.

 

WHEREAS, the Company has requested
that YA Global extend the Maturity Date for one month to April 30, 2008.

 

WHEREAS, YA Global is willing to
agree to such extension on the terms and conditions specified herein.

 

NOW, THEREFORE, in consideration of
the foregoing, and the respective agreements, warranties and covenants
contained herein, the parties hereto agree, covenant and warrant as follows:

 

1.               ACKNOWLEDGMENTS.

 

a.               Acknowledgement of Obligations.  The
Company hereby acknowledges, confirms and agrees that as of the date hereof, the
Company is indebted to YA Global under the Debenture and the Transaction
Documents in the outstanding principal amount plus accrued and unpaid interest
thereon and hereafter accruing and any liquidated damaged, fees, costs,
expenses and other charges now or hereafter payable by the Company to YA Global
under the Transaction Documents (collectively, the “Obligations”) and
such Obligations are unconditionally owed by the Company to YA Global, without
offset, defense or counterclaim of any kind, nature or description whatsoever.

 

b.              Acknowledgement of Security Interests.  The Company and its subsidiaries hereby
acknowledges, confirm and agree that YA Global has and shall continue to have
valid, enforceable and perfected first-priority liens upon and security
interests in the Pledged Property heretofore granted to YA Global pursuant to
the 

 

 

Security Agreement
between the Company, its subsidiaries, and YA Global dated March 29, 2007 or
otherwise granted to or held by YA Global.

 

c.               Binding Effect of Documents.  The Company hereto acknowledges, confirms and
agrees that:  (a) each of the
Transaction Documents to which it is a party has been duly executed and
delivered to YA Global by the Company, and each is in full force and effect as
of the date hereof, (b) the agreements and obligations of the Company contained
in such documents and in this Agreement constitute the legal, valid and binding
obligations of the Company, enforceable against each in accordance with their
respective terms, and the Company has no valid defense to the enforcement of
such obligations, and (c) YA Global is and shall be entitled to the
rights, remedies and benefits provided for in the Transaction Documents and
applicable law, without setoff, defense or counterclaim of any kind, nature or
descriptions whatsoever.

 

2.               AGREEMENTS.

 

a.               Extension.  In reliance upon the
representations, warranties and covenants of the Company contained in this
Agreement, and subject to the terms and conditions of this Agreement YA  Global agrees to extend the Maturity Date of
the Debenture to April 30, 2008.

 

b.              No Waivers; Reservation of Rights. 
YA Global reserves the right, in its discretion, to exercise any or all
of its rights and remedies under the Transaction Documents, and YA Global has not
waived any of such rights or remedies, and nothing in this Agreement should be
construed as a waiver of any such rights or remedies.

 

3.               RELEASE.  In exchange for the accommodations made by YA
Global herein, the Company does hereby, on behalf of itself and its agents,
representatives, attorneys, assigns, heirs, subsidiaries, executors and
administrators (collectively, “Company Parties”) RELEASE AND FOREVER DISCHARGE
YA Global and its subsidiaries and its respective affiliates, parents, joint
ventures, officers, directors, shareholders, interest holders, members,
managers, employees, consultants, representatives, successors and assigns,
heirs, executors and administrators (collectively, “Buyer Parties”) from
all causes of action, suits, debts, claims and demands whatsoever known or
unknown, at law, in equity or otherwise, which the Company Parties ever had,
now has, or hereafter may have on or prior to the date hereof, and any claims
for reasonable attorneys’ fees and costs, and including, without limitation,
any claims relating to fees, penalties, liquidated damages, and indemnification
for losses, liabilities and expenses. 
The release contained in this Section is effective without regard
to the legal nature of the claims raised and without regard to whether any such
claims are based upon tort, equity, or implied or express contract.  It is expressly understood and agreed that
this release shall operate as a clear and unequivocal waiver by the Company
Parties of any such claim whatsoever.

 

2

 

4.               PROVISIONS OF
GENERAL APPLICATION

 

a.               Effect of this Agreement. 
Except as modified pursuant hereto, no other changes or modifications to
the Transaction Documents are intended or implied and in all other respects the
Transaction Documents are hereby specifically ratified, restated and confirmed
by all parties hereto as of the effective date hereof.  To the extent of conflict between the terms
of this Agreement and the other Transaction Documents, the terms of this
Agreement shall control.  The Transaction
Documents and this Agreement shall be read and construed as one agreement.

 

b.              Governing Law. 
This Agreement shall be interpreted according to the laws of the State
of New Jersey and shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.  Any notices, demands, consents, other
writings or communications permitted or required by this Agreement shall be
given in the manner and to the address as set forth in the Transaction
Documents.

 

c.               Mutual Waiver of Jury Trial. 
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE BETWEEN
FACTOR AND CLIENT ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER FACTORING DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.

 

[SIGNATURE PAGE IMMEDIATELY TO FOLLOW]

 

3

 

IN
WITNESS WHEREOF, this Agreement is executed and delivered as
of the day and year first above written.

 

	
   

  	
  OPEN ENERGY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  David P. Saltman

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  YA GLOBAL INVESTMENTS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Yorkville
  Advisors, LLC

  
	
   

  	
  Its:

  	
  Investment
  Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Mark Angelo

  
	
   

  	
  Title:

  	
  Portfolio Manager

  
					

 

4

 

SCHEDULE A

 

TRANSACTION
DOCUMENTS

 

Securities Purchase
Agreement, dated March 29, 2007, between the Company and YA Global.

 

Secured Convertible
Debenture (No. OEGY 2-1), dated March 29, 2007, issued by the Company
to YA Global.

 

Warrant (No. OEGY
2-1), dated March 29, 2007, issued by the Company to YA Global.

 

Registration Rights
Agreement, dated March 29, 2007, between the Company and YA Global.

 

Security Agreement, dated
March 29, 2007 among the Company, WaterEye Corp., Solar Roofing Systems, Inc.,
Connect Renewable Energy, Inc., and YA Global.

 

Irrevocable Transfer
Agent Instructions, dated March 29, 2007 among the Company, Madison Stock
Transfer, and YA Global.

 

5

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