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Unassociated Document

    

    

     

    SECURITIES
      PURCHASE AGREEMENT

    

    BETWEEN

    

    DELI
      SOLAR (USA), INC.

    

    AND

    

    BARRON
      PARTNERS LP

    

    AND

    

    THE
      OTHER INVESTORS NAMED HEREIN

    

    DATED

    

    June
      13, 2007

    

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECURITIES
      PURCHASE AGREEMENT

    

    

    This
      SECURITIES PURCHASE AGREEMENT (the “Agreement”)
      is
      made and entered into as of the 13th
      day of
      June, 2007 between Deli
      Solar (USA), Inc., a
      Nevada
      corporation (the “Company”),
      and
Barron
      Partners LP, a
      Delaware limited partnership (“Barron”),
      and
      any other investors
      named on
      the signature page of this Agreement (together with Barron, the “Investors”
and
      each an “Investor”).

    

    RECITALS:

    

    WHEREAS,
      the
      Investors wish to purchase from the Company, upon the terms and subject to
      the
      conditions of this Agreement, for the Purchase Price, as hereinafter defined,
      an
      aggregate of (i) ONE
      MILLION SEVEN HUNDRED SEVENTY FOUR THOUSAND ONE HUNDRED AND NINETY FOUR
      (1,774,194)
      shares
      of the Company’s Series A Convertible Preferred Stock, par value $.001 per share
      (“Series
      A Preferred Stock”),
      with
      each share of Series A Preferred Stock being initially convertible into one
      (1)
      share of the Company’s common stock, par value $.001 per share (“Common
      Stock”),
      subject to adjustment, (ii) common stock purchase warrants (the “Warrants”)
      to
      purchase ONE
      MILLION SEVEN HUNDRED SEVENTY FOUR THOUSAND ONE HUNDRED AND NINETY FOUR
      (1,774,194)
      shares
      of Common Stock at One Dollar and Ninety Cents ($1.90) per share, (iii) Warrants
      to purchase ONE
      MILLION SEVEN HUNDRED SEVENTY FOUR THOUSAND ONE HUNDRED AND NINETY FOUR
      (1,774,194)
      shares
      of Common Stock at Two Dollars and Forty cents ($2.40) per share.

    

    WHEREAS,
      each
      Investor is purchasing the Securities in the amounts set forth in Schedule
      A of
      this Agreement;

    

    WHEREAS,
      the
      parties intend to memorialize the terms on which the Company will sell to the
      Investors and the Investors will purchase the Securities;

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and premises contained herein, and for
      other good and valuable consideration, the receipt and adequacy of which are
      hereby conclusively acknowledged, the parties hereto, intending to be legally
      bound, agree as follows:

    

    Article
      1

    

    INCORPORATION
      BY REFERENCE AND DEFINITIONS

    

    1.1 Incorporation
      by Reference.
      The
      foregoing recitals and the Exhibits and Schedules attached hereto and referred
      to herein, are hereby acknowledged to be true and accurate, and are incorporated
      herein by this reference.

    

    1.2 Supersedes
      Other Agreements.
      This
      Agreement, to the extent that it is inconsistent with any other instrument
      or
      understanding among the parties, shall supersede such instrument or
      understanding to the fullest extent permitted by law. A copy of this Agreement
      shall be filed at the Company’s principal office.

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          1

        
          

        

      

      
        
        

      

    

     

    1.3 Certain
      Definitions.
      For
      purposes of this Agreement, the following capitalized terms shall have the
      following meanings (all capitalized terms used in this Agreement that are not
      defined in this Article 1 shall have the meanings set forth elsewhere in this
      Agreement):

    

    1.3.1 “4.9%
      Limitation”
has
      the
      meaning set forth in Section 2.1.3 of this Agreement.

    

    1.3.2 “1933
      Act”
means
      the Securities Act of 1933, as amended.

    

    1.3.3 “1934
      Act”
means
      the Securities Exchange Act of 1934, as amended.

    

    1.3.4 “Additional
      Financing”
means
      the receipt by the Company of not less than $4,000,000 from the Investors
      (within 90 days after the effectiveness of the first Registration Statement
      filed pursuant to the Registration Rights Agreement) either through the exercise
      of Warrants, or additional equity financing which shall not include the proceeds
      of the sale of the Series A Preferred Stock hereunder.

    

    1.3.5 “Affiliate”
means
      a
      Person or Persons directly or indirectly, through one or more intermediaries,
      controlling, controlled by or under common control with the Person(s) in
      question. The term “control,” as used in the immediately preceding sentence,
      means, with respect to a Person that is a corporation, the right to exercise,
      directly or indirectly, more than 50% of the voting rights attributable to
      the
      shares of such controlled corporation and, with respect to a Person that is
      not
      a corporation, the possession, directly or indirectly, of the power to direct
      or
      cause the direction of the management or policies of such controlled
      Person.

    

    1.3.6 “Articles”
means
      the Articles of Incorporation of the Company, as the same may be amended from
      time to time.

    

    1.3.7 “Authorized
      Stock Proviso”
has
      the
      meaning set forth in Section 4.4.3 of this Agreement. 

    

    1.3.8 “Board
      of Directors”
means
      the Board of Directors of the Company

    

    1.3.9 “Bylaws”
means
      the Bylaws of the Company, as the same may be amended from time to
      time.

    

    1.3.10 “Certificate
      of Designation”
means
      the Certificate of Designations, Preferences and Rights, with respect to the
      Series A Preferred Stock. The Certificate of Designation shall be in
      substantially the form of Exhibit
      A
      to this
      Agreement.

    

    1.3.11 “Closing” means
      the
      consummation of the transactions contemplated by this Agreement, all of which
      transactions shall be consummated contemporaneously with the
      Closing.

    

    1.3.12 “Closing
      Date”
means
      the date on which the Closing occurs.

    

    1.3.13 “Closing
      Escrow Agreement”
shall
      mean the agreement between the Company, the Investors and the Escrow Agent
      pursuant to which securities are deposited into escrow to be held as provided
      in
      Section 6 of this Agreement. The Closing Escrow Agreement shall be in
      substantially the form of Exhibit
      B
      to this
      Agreement. 

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          2

        
          

        

      

      
        
        

      

    

     

    1.3.14 “Common
      Stock”
means
      the Company’s common stock, which is presently designated as the common stock,
      par value $.001 per share.

    

    1.3.15 “Company’s
      Governing Documents”
means
      the Articles and Bylaws.

    

    1.3.16 “Escrow
      Agent”
means
      Tri-State Title & Escrow, LLC.

    

    1.3.17 “Escrow
      Agreement”
means
      the Escrow Agreement dated June __, 2007, among the Company, the Investors
      and
      the Escrow Agent. The Escrow Agreement shall be in substantially the form of
      Exhibit
      C
      to this
      Agreement. 

    

    1.3.18 “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers,
      directors of and consultants (other than consultants whose services relate
      to
      the raising of funds) of the Company pursuant to any stock or option plan that
      was or may be adopted by (i) a majority of independent members of the Board
      of
      Directors or (ii) a majority of the members of a committee of independent
      directors established for compensatory purposes, (b) securities upon the
      exercise or conversion of any securities issued hereunder and pursuant to the
      Registration Rights Agreement, the Series A Preferred Stock, the Warrants and
      the Certificate of Designation and (c) securities upon the exercise or
      conversion of any other options, warrants or convertible securities which are
      outstanding after completion of the Closing, (d) not more than an aggregate
      of
      3,000 shares of Common Stock (or options to purchase such number of shares)
      per
      month and (e) securities issued pursuant to acquisitions, licensing agreements,
      or other strategic transactions provided, with respect to clause (e), any such
      issuance shall only be to a Person which is, itself or through its subsidiaries,
      an operating company in a business which the Board of Directors believes is
      beneficial to the Company and in which the Company receives benefits in addition
      to the investment of funds, but shall not include a transaction in which the
      Company is issuing securities primarily for the purpose of raising capital
      or to
      an entity whose primary business is investing in securities. 

    

    1.3.19 “GAAP”
means
      United States generally accepted accounting principles consistently
      applied.

    

    

    1.3.20 “Make
      Good Escrow Stock”
means
      900,000 shares of Series A Preferred Stock.

    

    

    1.3.21 “Material
      Adverse Effect”
means
      any adverse effect on the business, operations, properties or financial
      condition of the Company or any of its Subsidiaries that is material and adverse
      to the Company and its Subsidiaries taken as a whole and/or any condition,
      circumstance, or situation that would prohibit or otherwise materially interfere
      with the ability of the Company or any Subsidiary to perform any of its material
      obligations under this Agreement, the Registration Rights Agreement or the
      Warrants or to perform its obligations under any other material agreement.
      

    

    1.3.22 “Nevada
      Law”
shall
      mean the Nevada Business Corporation Act.

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          3

        
          

        

      

      
        
        

      

    

     

    1.3.23 “Person”
means
      an individual, partnership, firm, limited liability company, trust, joint
      venture, association, corporation, or any other legal entity.

    

    1.3.24 “Preferred
      Stock”
means
      the Company’s authorized preferred stock, par value $.001 per share.

    

    1.3.25 “Pre-Tax
      Income”
      means
      income
      before income taxes determined in accordance with GAAP plus
      (a)
      any
      cash or non-cash charges relating to the transaction contemplated by this
      Agreement and the Registration Rights Agreement (including, without limitation,
      any charges for derivative instruments), minus
      (b) the
      amount, if any, by which all non-recurring losses or expenses exceed all
      non-recurring items of income or gain provided however that Pre-Tax
      Income shall not be adjusted under clause (b) if all non-recurring items of
      income or gain exceed all non-recurring losses or expenses. 

    

    1.3.26 “Purchase
      Price”
means
      the two million seven hundred fifty thousand dollars ($2,750,000) to be paid
      by
      the Investors to the Company for the Securities.

    

    1.3.27 “Registration
      Rights Agreement”
means
      the registration rights agreement between the Investors and the Company in
      substantially the form of Exhibit
      D
      to this
      Agreement.

    

    1.3.28 “Registration
      Statement”
means
      the registration statement under the 1933 Act to be filed with the SEC for
      the
      registration of the Shares pursuant to the Registration Rights
      Agreement.

    

    1.3.29 “Restricted
      Stockholders”
shall
      have the meaning set forth in Section 6.16 of this Agreement.

    

    1.3.30 “Restriction
      Termination Date”
shall
      mean the date on which the Investors shall have (a) converted all shares of
      Series A Preferred Stock and exercised all Warrants (other than Warrants that

      shall have expired unexercised) and (b) sold the underlying Shares in the public
      market.

    

    1.3.31 “Restriction
      Termination Date at 90%”
shall
      mean the date on which the Investors shall have (a) converted shares of Series
      A
      Preferred Stock and exercised Warrants (other than Warrants that shall have
      expired unexercised) and (b) sold 90% of the Total Shares.

    

    1.3.32 “Securities”
means
      the shares of Series A Preferred Stock, the Warrants and the
      Shares.

    

    1.3.33 “SEC”
means
      the Securities and Exchange Commission.

    

    1.3.34 “SEC
      Documents”
means,
      at any given time, the Company’s latest Form 10-K or Form 10-KSB and all Forms
      10-Q or 10-QSB and 8-K and all proxy statements or information statements filed
      between the date the most recent Form 10-K or Form 10-KSB was filed and the
      date
      as to which a determination is being made.

    

    1.3.35 “Series
      A Preferred Stock”
means
      the shares of Series A Preferred Stock having the rights, preferences and
      privileges and subject to the limitations set forth in the Certificate of
      Designation.

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          4

        
          

        

      

      
        
        

      

    

     

    1.3.36 “Shares”
means,
      collectively, the shares of Common Stock issued or issuable (i) upon conversion
      of the Series A Preferred Stock and (ii) upon exercise of the
      Warrants.

    

    1.3.37 “Subsidiary”
means
      an entity in which the Company and/or one or more other Subsidiaries directly
      or
      indirectly own either 50% of the voting rights or 50% of the equity
      interests.

    

    1.3.38 “Subsequent
      Financing”
means
      any offer and sale of shares of Preferred Stock or debt that is initially
      convertible into shares of Common Stock or otherwise senior or superior to
      the
      Series A Preferred Stock.

    

    1.3.39 “Target
      Number”
has
      the
      meaning set forth in Section 6.15.2 of this Agreement.

    

    1.3.40 “Total
      Shares”
means
      the number of shares of Common Stock issuable upon conversion of the Series
      A
      Preferred Stock (excluding the Make Good Escrow Stock) and exercise of the
      Warrants. The Total Shares shall initially be Five Million Three Hundred Twenty
      Two Thousand Five Hundred Eighty Two (5,322,582) shares of Common Stock but
      may
      be subsequently increased as contemplated by Section 6.15. The number of Total
      Shares shall be adjusted to reflect any change in the conversion price of the
      Series A Preferred Stock and the exercise price of the Warrants and the
      expiration of any Warrants. 

    

    1.3.41 “Transaction
      Documents”
means
      this Agreement, all Schedules and Exhibits attached hereto, the Certificate
      of
      Designation, the Warrants, the Registration Rights Agreement, the Closing Escrow
      Agreement, the Escrow Agreement and all other documents and instruments to
      be
      executed and delivered by the parties in order to consummate the transactions
      contemplated hereby.

    

    1.3.42 “Warrants”
means
      the common stock purchase warrants in substantially the forms of Exhibits
      E-1 and E-2
      to this
      Agreement.

    

    1.4 All
      references in this Agreement to “herein” or words of like effect, when referring
      to preamble, recitals, article and section numbers, schedules and exhibits
      shall
      refer to this Agreement unless otherwise stated.

    

    Article
      2

    

    SALE
      AND PURCHASE OF SECURITIES; PURCHASE PRICE

    

    2.1 Sale
      of Securities. 

    

    2.1.1 Upon
      the
      terms and subject to the conditions set forth herein, and in accordance with
      applicable law, the Company agrees to sell to the Investors, and each Investor
      severally agrees to purchase from the Company, on the Closing Date, the number
      of Securities set forth after the Investor’s name on Schedule A set forth for
      the portion of the Purchase Price set forth in Schedule A. At or prior to the
      Closing each Investor shall wire the Investor’s portion of the Purchase Price to
      the Escrow Agent, who shall release the Purchase Price to the Company upon
      receipt of instructions from the Investor and the Company as provided in the
      Escrow Agreement. The Company shall cause the Securities to be issued to the
      Investors upon the release of the Purchase Price to the Company by the Escrow
      Agent pursuant to the terms of the Escrow Agreement.

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          5

        
          

        

      

      
        
        

      

    

     

    2.1.2 Except
      as
      expressly provided in the Certificate of Designation and the
      Warrants,
      an
      Investor shall not be entitled to convert the Series A Preferred
      Stock
      into
      shares of Common Stock or to exercise the Warrants to the extent that such
      conversion or exercise would result in beneficial ownership by the Investor
      and
      its Affiliates of more than 4.9% of the then outstanding number of shares of
      Common Stock on such date after giving effect to such conversion or exercise.
      For the purposes of this Agreement beneficial ownership shall be determined
      in
      accordance with Section 13(d) of the 1934 Act, and Regulation 13d-3 thereunder.
      The limitation set forth in this Section 2.1.2 is referred to as the
“4.9%
      Limitation.”

    

    Article
      3

    

    CLOSING
      DATE AND DELIVERIES AT CLOSING

    

    3.1 Closing
      Date.
      The
      Closing of the transactions contemplated by this Agreement, unless expressly
      determined herein, shall be held at the offices of Guzov Ofsink, LLC, 600
      Madison Avenue, New York, New York 10022, at 2:00 P.M. local time, on June
      14,
      2007 (the “Closing
      Date”)
      or on
      such other date and at such other place as may be mutually agreed by the
      parties, including closing by facsimile with originals to follow. 

    

    3.2 Deliveries
      by the Company.
      In
      addition to and without limiting any other provision of this Agreement, the
      Company agrees to deliver, or cause to be delivered, to the Escrow Agent under
      the Closing Escrow Agreement, the following: 

    

    (a) At
      or
      prior to Closing, an executed Agreement with all exhibits and schedules attached
      hereto;

    

    (b) At
      the
      Closing, shares of Series A Preferred Stock and Warrants in the names of the
      Investors in the numbers set forth in Schedule A to this Agreement;

    

    (c) The
      executed Registration Rights Agreement;

    

    (d) The
      executed Closing Escrow Agreement and Escrow Agreement;

    

    (e) Copies
      of
      all SEC correspondence, if any, since the last Form 10-KSB and any
      correspondence which was issued prior to the last Form 10-KSB, if any, which
      has
      not been resolved to the satisfaction of the SEC;

    

    (f) Schedule
      of all amounts owed (cash and stock) to officers, consultants and key employees
      (salary, bonuses, etc.);

    

    (g) Certifications
      in form and substance acceptable to the Company and the Investors from any
      and
      all brokers or agents involved in the transactions contemplated hereby as to
      the
      amount of commission or compensation payable to such broker or agent as a result
      of the consummation of the transactions contemplated hereby and from the Company
      or Investor, as appropriate, to the effect that reasonable reserves for any
      other commissions or compensation that may be claimed by any broker or agent
      have been set aside; 

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          6

        
          

        

      

      
        
        

      

    

     

    (h) Copies
      of
      management letters from the Company’s registered independent accounting firm
      issued in connection with the Company’s most recent audit; 

    

    (i) Evidence
      of approval by the Board of Directors of the Transaction Documents and the
      transactions contemplated hereby;

    

    (j) Agreements
      from the Restricted Stockholders pursuant to Section 6.16 of this
      Agreement;

    

    (k) Evidence
      that the Certificate of Designation has been approved by the Board of
      Directors;

    

    (l) Good
      standing certificate from the Secretary of State of the State of
      Nevada;

    

    (m) Copy
      of
      the Company’s Articles and the Certificate of Designation, as currently in
      effect, certified by the Secretary of State of the State of Nevada;

    

    (n) An
      opinion from the Company’s general counsel, Guzov Ofsink, LLC, concerning the
      Transaction Documents and the transactions contemplated thereby in form and
      substance reasonably acceptable to Investors;

    

    (o) Executed
      disbursement instructions pursuant to the Escrow Agreement, which shall provide
      that the Escrow Agent continue to hold $150,000 to pay the Company’s anticipated
      obligations to its investor relations company; 

    

    (p) Copies
      of
      (i) all executive employment agreements which have not been disclosed in the
      Company’s Form 10-KSB for the year ended December 31, 2006, (ii) all past and
      present financing documents or other documents where stock could potentially
      be
      issued or issued as payment, (iii) all past and present material litigation
      documents which have not been disclosed in the Company’s Form 10-KSB for the
      year ended December 31, 2006; and

    

    (q) Such
      other documents or certificates as shall be reasonably requested by Investors
      or
      their counsel.

    

    3.3 Deliveries
      by Investors.
      In
      addition to and without limiting any other provision of this Agreement, each
      Investor agrees to deliver, or cause to be delivered, to the Escrow Agent under
      the Closing Escrow Agreement, the following: 

    

    (a) The
      Investor’s portion of the Purchase Price;

    

    (b) The
      executed Agreement with all Exhibits and Schedules attached hereto;

    

    (c) The
      executed Registration Rights Agreement; 

    

    (d) The
      executed Closing Escrow Agreement and Escrow Agreement;

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          7

        
          

        

      

      
        
        

      

    

     

    (e) The
      executed disbursement instructions pursuant to the Closing Escrow Agreement;
      and

    

    (f) Such
      other documents or certificates as shall be reasonably requested by the Company
      or its counsel.

    

    3.4 Delivery
      of Original Documents.
      In the
      event any document provided to the other party in Paragraphs 3.2 and 3.3 herein
      is provided by facsimile, the party shall forward an original document to the
      other party within seven (7) business days.

    

    3.5 Further
      Assurances.
      The
      Company and each Investor shall, upon request, on or after the Closing Date,
      cooperate with each other (specifically, the Company shall cooperate with the
      Investors, and each Investor shall cooperate with the Company) by furnishing
      any
      additional information, executing and delivering any additional documents and/or
      other instruments and doing any and all such things as may be reasonably
      required by the parties or their counsel to consummate or otherwise implement
      the transactions contemplated by this Agreement. 

    

    3.6 Waiver.
      An
      Investor may waive any of the requirements of Section 3.2 of this Agreement,
      and
      the Company may waive any of the provisions of Section 3.3 of this Agreement.
      The Investors may also waive any of the requirements of the Company under the
      Closing Escrow Agreement.

    

    Article
      4

    

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY 

    

    The
      Company represents and warrants to the Investors as of the date hereof and
      as of
      Closing Date (which warranties and representations shall survive the Closing
      regardless of any examinations, inspections, audits and other investigations
      the
      Investors have heretofore made or may hereinafter make with respect to such
      warranties and representations) as set forth below. The Investors are entering
      into this Agreement in reliance on the representations and warranties set forth
      in this Agreement and no reliance is being placed on oral representations,
      if
      any, that may have been made prior to the execution and delivery of this
      Agreement.

    

    4.1 Organization
      and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Nevada, and has the requisite corporate power
      and
      authority to own, lease and operate its properties and to carry on its business
      as it is now being conducted and is duly qualified to do business in any other
      jurisdiction where the nature of the businesses conducted by it or the ownership
      or leasing of its properties requires such qualification, except where the
      failure to be so qualified will not have a Material Adverse Effect on the
      business, operations, properties, assets, financial condition or results of
      operation of the Company and its Subsidiaries taken as a whole. 

    

    4.2 Company’s
      Governing Documents.
      Complete and correct copies of the Company’s Governing Documents (a) have been
      provided to the Investors and (b) have been filed with the SEC in accordance
      with the regulations of the SEC and (c) will be in full force and effect on
      the
      Closing Date.

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          8

        
          

        

      

      
        
        

      

    

     

    4.3 Capitalization.

    

    4.3.1 The
      authorized and outstanding capital stock of the Company as of the date of this
      Agreement and as adjusted to reflect the issuance and sale of the Securities
      pursuant to this Agreement is set forth in Schedule
      4.3.l
      to this
      Agreement. Schedule
      4.3.1
      also
      lists all shares issuable pursuant to employment, consulting and other services
      agreements, acquisition agreements, options and equity-based incentive plans,
      debt securities, convertible securities, warrants, financing or business
      relationships as well as each agreement, plan, arrangement or understanding
      pursuant to which any shares of any class of capital stock may be issued, a
      copy
      of each of which has been provided to the Investors. 

    

    4.3.2 All
      shares of capital stock described above to be issued have been duly authorized
      and when issued, will be validly issued, fully paid and non-assessable and
      free
      of preemptive rights. 

    

    4.3.3 Except
      pursuant to this Agreement and as set forth in Schedule
      4.3.1,
      as of
      the date hereof, there are no outstanding options, warrants, rights to subscribe
      for, calls or commitments of any character whatsoever relating to, or securities
      or rights convertible into or exchangeable for, shares of any class of capital
      stock of the Company, or agreements, understandings or arrangements to which
      the
      Company is a party, or by which the Company is or may be bound, to issue
      additional shares of its capital stock or options, warrants, scrip or rights
      to
      subscribe for, calls or commitment of any character whatsoever relating to,
      or
      securities or rights convertible into or exchangeable for, any shares of any
      class of its capital stock. The Company agrees to inform the Investors in
      writing of any additional warrants of other awards granted prior to the Closing
      Date.

    

    4.4 Authority.

    

    4.4.1 The
      Company has all requisite corporate power and authority to execute and deliver
      this Agreement, the Securities, the Registration Rights Agreement, the Closing
      Escrow Agreement, the Escrow Agreement and any other Transaction Documents
      to
      which the Company is a party, to perform its obligations hereunder and
      thereunder and to consummate the transactions contemplated hereby and thereby.
      The execution and delivery of this Agreement, the Securities, the Registration
      Rights Agreement, the Closing Escrow Agreement, the Escrow Agreement and any
      other Transaction Documents to which the Company is a party, have been duly
      authorized by all necessary corporate action and no other corporate proceedings
      on the part of the Company is necessary to authorize this Agreement or to
      consummate the transactions contemplated hereby and thereby except as disclosed
      in this Agreement. This Agreement has been duly executed and delivered by the
      Company and constitutes the legal, valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms, except as
      enforceability may be limited by bankruptcy, insolvency and other laws of
      general application affecting the enforcement of creditors’ rights and except
      that any granting of equitable relief is in the discretion of the
      court.

    

    4.4.2 The
      Securities, when issued pursuant to this Agreement, constitute the valid,
      binding and obligations of the Company enforceable against the Company in
      accordance with its terms, except as enforceability may be limited by
      bankruptcy, insolvency and other laws of general application affecting the
      enforcement of creditors’ rights and except that any granting of equitable
      relief is in the discretion of the court. The Certificate of Designation has
      been approved by the Board of Directors. Upon the filing of the Certificate
      of
      Designation, the Series A Preferred Stock, when issued, will be duly and validly
      authorized and issued, fully paid and non-assessable. The Warrants constitute
      the valid and binding obligations of the Company, enforceable against the
      Company in accordance with their terms, except as enforceability may be limited
      by bankruptcy, insolvency and other laws of general application affecting the
      enforcement of creditors’ rights and except that any granting of equitable
      relief is in the discretion of the court. All the Securities, when so issued,
      will be free and clear of all liens, charges, claims, options, pledges,
      restrictions, preemptive rights, rights of first refusal and encumbrances
      whatsoever (other than those, if any, incurred by the Investors). 

     

    
      
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    4.4.3 Notwithstanding
      any contrary representations and warranties, no
      representation is made with respect to the ability of any Investor to convert
      the Series A Preferred Stock or exercise any Warrant if and to the extent that
      the conversion price of the Series A Preferred Stock, as defined in the
      Certificate of Designation, or the number of shares of Common Stock issuable
      upon exercise of the Warrants would result in the issuance of a number of shares
      of Common Stock which is greater than the amount by which the authorized shares
      of Common Stock exceeds the sum of the outstanding Common Stock and the shares
      of Common Stock reserved for issuance pursuant to outstanding agreements and
      outstanding options, warrants, rights, convertible securities and other
      securities upon the exercise or conversion of which (or pursuant to the terms
      of
      which) additional shares of Common Stock may be issuable (the foregoing proviso
      being referred to as the “Authorized
      Stock Proviso”).

    

    4.5 No
      Conflict; Required Filings and Consents.
      Neither
      the issuance of the Securities, nor the execution and delivery of this Agreement
      and other Transaction Documents by the Company and the performance by the
      Company of its obligations hereunder and thereunder will: (i) conflict with
      or
      violate the Company’s or any Subsidiary’s Governing Instruments; (ii) conflict
      with, breach or violate any federal, state, foreign or local law, statute,
      ordinance, rule, regulation, order, judgment or decree (collectively,
“Laws”)
      in
      effect as of the date of this Agreement and applicable to the Company or any
      Subsidiary; or (iii) result in any breach of, constitute a default (or an event
      that with notice or lapse of time or both would become a default) under, give
      to
      any other entity any right of termination, amendment, acceleration or
      cancellation of, require payment under, or result in the creation of a lien
      or
      encumbrance on any of the properties or assets of the Company or any Subsidiary
      pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
      license, permit, franchise or other instrument or obligation to which the
      Company or any Subsidiary is a party or by which the Company or any Subsidiary
      or any of their respective properties or assets is bound, other than (with
      respect to clauses (i), (ii) and (iii) above) such violations, conflicts,
      breaches, defaults, terminations, accelerations or creations of liens that
      would
      not, in the aggregate, have a Material Adverse Effect
      and
      except to the extent that stockholder approval may be required as a result
      of
      the Authorized Stock Proviso, in which event, the Company will seek stockholder
      approval to effect an increase in the authorized Common Stock sufficient to
      enable the Company to be in compliance with this Section 4.5. 

    

    4.6 Report
      and Financial Statements.
      The
      Company’s Annual Report on Form 10-KSB for the year ended December 31, 2006
      filed with the SEC contains the audited consolidated financial statements of
      the
      Company and its Subsidiaries, certified by Child, Van Wagoner & Bradshaw,
      PLLC Salt Lake City, Utah (“CVB”),
      the
      Company’s independent registered accounting firm. Each of the consolidated
      balance sheets contained in the Form 10-KSB fairly presents the financial
      position of the Company, as of its date, and each of the consolidated statements
      of income, stockholders’ equity and cash flows (including any related notes and
      schedules thereto) fairly presents the results of operations, cash flows and
      changes in stockholders’ equity, as the case may be, of the Company and its
      Subsidiaries for the periods to which they relate, in each case in accordance
      with GAAP consistently applied during the periods involved. CVB is independent
      as to the Company in accordance with the rules and regulations of the SEC.
      The
      books and records of the Company and its Subsidiaries have been, and are being,
      maintained in all material respects in accordance with GAAP and any other
      applicable legal and accounting requirements and reflect only actual
      transactions. The Company has not received any letters of comments from the
      SEC
      relating to any filing made by the Company with the SEC which has not been
      addressed by an amended filing, and each amended filing responds in all material
      respects to the questions raised by the staff of the SEC. The Company maintains
      disclosure controls and procedures that are effective to ensure that information
      required to be disclosed by the Company in its annual and quarterly reports
      filed with the SEC is accumulated and communicated to the Company’s management,
      including its principal executive and financial officers as appropriate, to
      allow timely decisions regarding required disclosure. There were no significant
      changes in the Company’s internal controls or other factors that could
      significantly affect such controls subsequent to December 31, 2006. The Company
      has not received any advice from its independent registered accounting firm
      to
      the effect that there is any significant deficiency or material weakness in
      the
      Company’s controls or recommending any corrective action on the part of the
      Company or any Subsidiary. 

     

    
      
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    4.7 Compliance
      with Applicable Laws.
      Neither
      the Company nor any Subsidiary is in violation of, or, to the knowledge of
      the
      Company is under investigation with respect to, or has been given notice or
      has
      been charged with the violation of, any Law of a governmental agency, except
      for
      violations which individually or in the aggregate do not have a Material Adverse
      Effect. 

    

    4.8 Brokers.
      Except
      as set forth on Schedule
      4.8,
      no
      broker, finder or investment banker is entitled to any brokerage, finder’s or
      other fee or commission in connection with the transactions contemplated by
      this
      Agreement based upon arrangements made by or on behalf of the
      Company.

    

    4.9 SEC
      Documents.
      The
      Investors acknowledge that the Company is a publicly held company and has made
      available to the Investors upon request true and complete copies of any
      requested SEC Documents. The Company has registered its Common Stock pursuant
      to
      Section 12(d) of the 1934 Act, and the Common Stock is quoted and traded on
      the
      OTC Bulletin Board of the National Association of Securities Dealers, Inc.
      The
      Company has received no notice, either oral or written, with respect to the
      continued quotation or trading of the Common Stock on the OTC Bulletin Board.
      The Company has not provided to the Investors any information that, according
      to
      applicable law, rule or regulation, should have been disclosed publicly prior
      to
      the date hereof by the Company, but which has not been so disclosed. As of
      their
      respective dates, the SEC Documents complied in all material respects with
      the
      requirements of the 1934 Act, and rules and regulations of the SEC promulgated
      thereunder and the SEC Documents did not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein
      or
      necessary in order to make the statements therein, in light of the circumstances
      under which they were made, not misleading.

    

    4.10 Litigation.
      To the
      knowledge of the Company, no litigation, claim, or other proceeding before
      any
      court or governmental agency is pending or to the knowledge of the Company,
      threatened against the Company, the prosecution or outcome of which may have
      a
      Material Adverse Effect.

    

    4.11 Employment
      Agreements.
      Except
      as disclosed in the Company’s Form 10-KSB for the year ended December 31, 2006,
      the Company does not have any agreement or understanding with any officer or
      director, and there has been no material change in the compensation of any
      officer and director from that shown in said Form 10-KSB.

     

    
      
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    4.12 Exemption
      from Registration.
      Subject
      to the accuracy of the Investors’ representations in Article V of this
      Agreement, except as required pursuant to the Registration Rights Agreement,
      the
      sale of the Series A Preferred Stock and Warrants by the Company to the
      Investors will not require registration under the 1933 Act. When issued upon
      conversion of the Series A Preferred Stock or upon exercise of the Warrants
      in
      accordance with their terms, the shares of Common Stock underlying the Series
      A
      Preferred Stock and the Warrants will be duly and validly authorized and issued,
      fully paid, and non-assessable. The Company is issuing the Series A Preferred
      Stock and the Warrants in accordance with and in reliance upon the exemption
      from registration afforded, inter alia, by Rule 506 under Regulation D as
      promulgated by the SEC under the 1933 Act, and/or Section 4(2) of the 1933
      Act.

    

    4.13 No
      General Solicitation or Advertising in Regard to this
      Transaction.
      Neither
      the Company nor any of its Affiliates nor, to the knowledge of the Company,
      any
      Person acting on its or their behalf (i) has conducted or will conduct any
      general solicitation (as that term is used in Rule 502(c) of Regulation D as
      promulgated by the SEC under the 1933 Act) or general advertising with respect
      to the sale of the Series A Preferred Stock or Warrants, or (ii) made any offers
      or sales of any security or solicited any offers to buy any security under
      any
      circumstances that would require registration of the Series A Preferred Stock
      or
      Warrants under the 1933 Act, except as required herein.

    

    4.14 No
      Material Adverse Effect.
      Since
      December 31, 2006, no event or circumstance resulting in a Material Adverse
      Effect has occurred or exists with respect to the Company. No material supplier
      or customer has given notice, oral or written, that it intends to cease or
      reduce the volume of its business with the Company from historical levels.
      Since
      December 31, 2006, no event or circumstance has occurred or exists with respect
      to the Company or its businesses, properties, prospects, operations or financial
      condition, that, under any applicable law, rule or regulation, requires public
      disclosure or announcement prior to the date hereof by the Company but which
      has
      not been so publicly announced or disclosed in writing to the
      Investor.

    

    4.15 Material
      Non-Public Information.
      The
      Company has not disclosed to the Investors any material non-public information
      that (i) if disclosed, would reasonably be expected to have a material effect
      on
      the price of the Common Stock or (ii) according to applicable law, rule or
      regulation, should have been disclosed publicly by the Company prior to the
      date
      hereof but which has not been so disclosed.

    

    4.16 Internal
      Controls And Procedures.
      The
      Company and its Subsidiaries maintain books and records and internal accounting
      controls which provide reasonable assurance that (i) all transactions to which
      the Company or any Subsidiary is a party or by which their respective properties
      are bound are executed with management’s authorization; (ii) the recorded
      accounting of the Company’s consolidated assets is compared with existing assets
      at regular intervals; (iii) access to the Company’s consolidated assets is
      permitted only in accordance with management’s authorization; and (iv) all
      transactions to which the Company or any Subsidiary is a party or by which
      any
      of their respective properties are bound are recorded as necessary to permit
      preparation of the financial statements of the Company in accordance with
      GAAP.

     

    
      
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    4.17 Full
      Disclosure.
      No
      representation or warranty made by the
      Company in
      this
      Agreement and no certificate or document furnished or to be furnished to the
      Investors pursuant to this Agreement contains or will contain any untrue
      statement of a material fact, or omits or will omit to state a material fact
      necessary to make the statements contained herein or therein not misleading.
      

    

    
      
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    REPRESENTATIONS
      AND WARRANTIES OF THE INVESTORS

    

    Each
      Investor severally and not jointly represents and warrants to the Company
      that:

    

    5.1 Concerning
      the Investors.
      The
      state in which any offer to purchase shares hereunder was made or accepted
      by
      any Investor is the state shown as such Investor’s address. The Investor was not
      formed for the purpose of investing solely in the Securities.

    

    5.2 Authorization
      and Power.
      The
      Investor has the requisite power and authority to enter into and perform this
      Agreement and to purchase the Securities being sold to it hereunder. The
      execution, delivery and performance of this Agreement by the Investor and the
      consummation by the Investor of the transactions contemplated hereby have been
      duly authorized by all necessary corporate or partnership action. This
      Agreement, the Registration Rights Agreement, the Closing Escrow Agreement,
      the
      Escrow Agreement and the other Transaction Documents to which they are parties
      have been duly executed and delivered by each such Investor and at the Closing
      shall constitute valid and binding obligations of each such Investor enforceable
      against each such Investor in accordance with their terms, except as
      enforceability may be limited by bankruptcy, insolvency and other laws of
      general application affecting the enforcement of creditors’ rights and except
      that any granting of equitable relief is in the discretion of the
      court.

    

    5.3 No
      Conflicts.
      The
      execution, delivery and performance of this Agreement, the Registration Rights
      Agreement, the Closing Escrow Agreement, the Escrow Agreement and the other
      Transaction Documents to which each such Investor is a party, and the
      consummation by such Investor of the transactions contemplated hereby or thereby
      or relating hereto or thereto do not and will not (i) result in a violation
      of
      such Investor’s charter documents or bylaws where appropriate or (ii) conflict
      with, or constitute a default (or an event which with notice or lapse of time
      or
      both would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of any agreement, indenture or
      instrument to which such Investor is a party, or result in a violation of any
      law, rule, or regulation, or any order, judgment or decree of any court or
      governmental agency applicable to such Investor or its properties (except for
      such conflicts, defaults and violations as would not, individually or in the
      aggregate, have a Material Adverse Effect on such Investor). The Investor is
      not
      required to obtain any consent, authorization or order of, or make any filing
      or
      registration with, any court or governmental agency in order for it to execute,
      deliver or perform any of such Investor’s obligations under this Agreement the
      Registration Rights Agreement, the Closing Escrow Agreement, the Escrow
      Agreement and the other Transaction Documents to which each such Investor is
      a
      party, or to purchase the securities and the underlying Shares from the Company
      in accordance with the terms hereof. 

    

    5.4 Financial
      Risks.
      Such
      Investor acknowledges that such Investor is able to bear the financial risks
      associated with an investment in the securities (and the underlying shares
      of
      Common Stock) being purchased by such Investor from the Company and that it
      has
      been given full access to such records of the Company and its Subsidiaries
      and
      to the officers of the Company and its Subsidiaries as it has deemed necessary
      or appropriate to conduct its due diligence investigation. Such Investor is
      capable of evaluating the risks and merits of an investment in the securities
      being purchased by the Investor from the Company by virtue of its experience
      as
      an investor and its knowledge, experience, and sophistication in financial
      and
      business matters and the Investor is capable of bearing the entire loss of
      its
      investment in the securities being purchased by the Investor from the
      Company.

     

    
      
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    5.5 Accredited
      Investor.
      The
      Investor is (i) an “accredited investor” as that term is defined in Rule 501 of
      Regulation D promulgated under the 1933 Act by reason of Rule 501(a)(3) and
      (6),
      (ii) experienced in making investments of the kind described in this Agreement
      and the related documents, (iii) able, by reason of the business and financial
      experience of its officers (if an entity) and professional advisors (who are
      not
      affiliated with or compensated in any way by the Company or any of its
      affiliates or selling agents), to protect its own interests in connection with
      the transactions described in this Agreement, and the related documents, and
      (iv) able to afford the entire loss of its investment in the securities being
      purchased by the Investor from the Company. 

    

    5.6 Brokers.
      No
      broker, finder or investment banker is entitled to any brokerage, finder’s or
      other fee or Commission in connection with the transactions contemplated by
      this
      Agreement based upon arrangements made by or on behalf of such Investor. Such
      Investor understands that any obligations under agreements or arrangements
      with
      brokers disclosed in Schedule
      4.8
      are
      obligations of the Company.

    

    5.7 Knowledge
      of Company.
      Such
      Investor and such Investor’s advisors, if any, have been, upon request,
      furnished with all materials relating to the business, finances and operations
      of the Company and materials relating to the offer and sale of the securities
      being purchased by such Investor from the Company. Such Investor and such
      Investor’s advisors, if any, have been afforded the opportunity to ask questions
      of the Company and have received complete and satisfactory answers to any such
      inquiries.

    

    5.8 Risk
      Factors.
      Each
      Investor understands that such Investor’s investment in the securities being
      purchased by such Investor from the Company involves a high degree of risk.
      Such
      Investor understands that no United States federal or state agency or any other
      government or governmental agency has passed on or made any recommendation
      or
      endorsement of the securities being purchased by the Investor from the Company.
      Such Investor warrants that such Investor is able to bear the complete loss
      of
      such Investor’s investment in the securities being purchased by the Investor
      from the Company.

    

    5.9 Full
      Disclosure.
      No
      representation or warranty made by such Investor in this Agreement and no
      certificate or document furnished or to be furnished to the Company pursuant
      to
      this Agreement contains or will contain any untrue statement of a material
      fact,
      or omits or will omit to state a material fact necessary to make the statements
      contained herein or therein not misleading. Except as set forth or referred
      to
      in this Agreement, Investor does not have any agreement or understanding with
      any person relating to acquiring, holding, voting or disposing of any equity
      securities of the Company.

    

    
      
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    Article
      6 

    

    COVENANTS
      OF THE COMPANY

    

    6.1 Registration
      Rights.
      The
      Company shall cause the Registration Rights Agreement to remain in full force
      and effect according to the provisions of the Registration Rights Agreement
      and
      the Company shall comply in all material respects with the terms thereof. Except
      as set forth on
      Schedule 6.1, the
      Company does not have any agreement or obligation which would enable any Person
      to include securities in any registration statement required to be filed on
      behalf of the Investors pursuant to the Registration Rights Agreement and will
      not take any action which will give any Person any right to include securities
      in any such registration statement. Except as set forth on
      Schedule 6.1. no
      Person
      has any demand or piggyback registration right with respect to any securities
      of
      the Company. The Company will not file any registration statement covering
      any
      shares of Common Stock issuable to any officers, directors, Affiliates of or
      consultants to the Company until the earlier of (a) eighteen (18) months from
      the Closing Date or (b) the Restriction Termination Date at 90%; provided,
      however,
      that
      the Company may file a registration statement on Form S-8 for shares issued
      or
      issuable pursuant to employee stock option plans for employees who are not
      officers, directors or Affiliates of the Company.

    

    6.2 Reservation
      of Shares.
      As of
      the date hereof, the Company has reserved and the Company shall continue to
      reserve and keep available at all times, free of preemptive rights, the maximum
      number of Shares for the purpose of enabling the Company to issue the Shares
      issuable on conversion of the Series A Preferred Stock and on exercise of the
      Warrants without giving effect to any adjustments. 

    

    6.3 Compliance
      with Laws.
      The
      Company hereby agrees to comply in all material respects with the Company’s
      reporting, filing and other obligations under the securities Laws.

    

    6.4 Exchange
      Act Registration.
      The
      Company will continue its obligation to report to the SEC under Section 12
      of
      the 1934 Act and will use its best efforts to comply in all material respects
      with its reporting and filing obligations under the 1934 Act, and will not
      take
      any action or file any document (whether or not permitted by the 1934 Act or
      the
      rules thereunder) to terminate or suspend any such registration or to terminate
      or suspend its reporting and filing obligations under the 1934 until the
      Investors have disposed of all of their Shares.

    

    6.5 Corporate
      Existence; No Conflicting Agreements.
      The
      Company will take all steps necessary to preserve and continue the corporate
      existence of the Company. The Company shall not enter into any agreement, the
      terms of which agreement would restrict or impair the right or ability of the
      Company to perform any of its obligations under this Agreement or any of the
      other agreements attached as exhibits hereto.

    

    6.6 Listing,
      Securities Exchange Act of 1934 and Rule 144
      Requirements.
      The
      Company shall not take any action which would cause its Common Stock not to
      be
      traded on the OTC Bulletin Board, except that the Company may list the Common
      Stock on the Nasdaq Stock Market or the American or New York Stock Exchange
      if
      it meets the applicable listing requirements. If, for any consecutive thirty
      day
      period after the Closing Date, the Company is not in compliance with this
      Section 6.6, then the Company shall pay to the Investors as liquidated damages
      and not as a penalty, an amount equal to one percent (1%) per month for each
      subsequent full month that the Company is not in compliance. The one percent
      shall be based on the lesser of (a) the Purchase Price or (b) that percentage
      of
      the Purchase Price which the Unsold Shares bears to the number of shares of
      Common Stock initially issuable upon conversion of the Series A Preferred Stock.
      The Unsold Shares shall mean shares of Series A Preferred Stock with respect
      to
      which both (i) the Series A Preferred Stock has not been converted and (ii)
      the
      underlying shares of Common Stock that have not been sold or otherwise
      transferred pursuant to a registration statement or Rule 144. The liquidated
      damages shall be payable in cash or in shares of Series A Preferred Stock,
      as
      the Company shall determine. Such
      damages shall be payable quarterly on the tenth (10th)
      day of
      the following calendar quarter, and shall cease to accrue at the time the
      Company begins complying with the provisions of this Section 6.6. 

     

    
      
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    6.7 No
      Convertible Debt or Preferred Stock.
      The
      Company will cause to be cancelled or paid all convertible debt in the Company
      on or prior to the Closing Date. Until the earlier of (a) three years from
      the
      Closing Date or (b) the Restriction Termination Date, the Company will not
      issue
      any convertible debt or any shares of any class or series of convertible
      Preferred Stock. 

    

    6.8 Debt
      Limitation.
      Until
      the earlier of (a) three years from the Closing Date or (b) the Restriction
      Termination Date at 90%, the Company will not have any debt outstanding in
      an
      amount greater than twice the sum of the EBITDA from continuing operation for
      the past four quarters. 

    

    6.9 Reset
      Equity Deals.
      On
      or
      prior to the Closing Date, the Company will cause to be cancelled any and all
      reset features related to any shares outstanding that could result in additional
      shares being issued provided however that no action will be taken with respect
      to the outstanding warrants. Until the earlier of (a) five years from the
      Closing Date or (b) the Restriction Termination Date, the Company will not
      enter
      into any transaction that have any reset features that could result in
      additional shares being issued.

    

    6.10 Independent
      Directors.
      

    

    6.10.1 No
      later
      than the thirty (30) days after the Closing Date, the
      Company shall increase the size of the Board to five or seven and shall cause
      the appointment of the majority of the Board of Directors to be independent
      directors, as defined by the rules
      of
      the Nasdaq Stock Market. 

    

    6.10.2 If,
      at
      any time subsequent to thirty (30) days after the Closing Date until the earlier
      of (a) three years from the Closing or (b) the Restriction Termination Date
      at
      90%, the Board of Directors shall not be composed of a majority of independent
      directors: 

    

    6.10.2.1 for
      a
      reason other than for an Excused Reason, the Company shall have 30 days to
      take
      such steps as are necessary so that a majority of the Company’s directors are
      independent directors, and

    

    6.10.2.2 for
      an
      Excused Reason, the Company shall have 45 days from the date that the Company
      becomes aware of the event (or the last event if there are more than one such
      event) giving rise to the Excused Reason, to take such steps as are necessary
      so
      that a majority of the Company’s directors are independent
      directors.

     

    
      
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    6.10.3 The
      term
“Excused
      Reason”
shall
      mean the death or resignation of an independent director or the occurrence
      of an
      event whereby an independent director ceases to be independent.

    

    6.10.4 If,
      during the period referred to in Section 6.10.2 of this Agreement, the Company
      shall have failed to have its Board of Directors composed of a majority of
      independent directors after the date by which such situation was to have been
      cured pursuant to Section 6.10.2.1 or Section 6.10.2.2 of this Agreement,
      whichever shall apply, the Company shall pay to the Investors, as liquidated
      damages and not as a penalty, an amount equal to one percent (1%) per month
      of
      the Purchase Price of the then outstanding shares of Series A Preferred Stock,
      payable monthly on the tenth (10th)
      day of
      the following month, in cash or in Series A Preferred Stock at the option of
      the
      Investors, based on the number of days that such condition exists beyond the
      applicable grace period. The parties agree that the only damages payable for
      a
      violation of such provisions shall be such liquidated damages. The parties
      hereto agree that the liquidated damages provided for in this Section 6.10.4
      constitute a reasonable estimate of the damages that may be incurred by the
      Investors by reason of the failure of the Company to have a majority of
      directors as independent directors.
      

    

    6.10.5 In
      no
      event shall the total payments made pursuant to this Section 6.10 and Section
      6.11, whether in cash or Series A Preferred Stock exceed in the aggregate one
      percent (1%) per month of the Purchase Price of the shares of Series A Preferred
      Stock that are outstanding as of the date on which a computation is being made.
      

    

    6.11 Independent
      Directors on Audit and Compensation Committees. No
      later
      than sixty (60) days after the Closing Date, the Company will have an audit
      committee comprised solely of not less than three independent directors and
      a
      compensation committee comprised of not less than three directors, a majority
      of
      whom are independent directors. If at any time subsequent to the Closing Date
      during the period when the Company is required to have a majority of independent
      directors pursuant to Section 6.10 of this Agreement, independent directors
      do
      not comprise all of the members of the audit committee and a majority of the
      members of the compensation committee within the grace periods provided in
      Section 6.10, the
      Company
      shall pay to the Investors, as liquidated damages and not as a penalty, an
      amount equal to one percent (1%) per month of the Purchase Price of the then
      outstanding Series A Preferred Stock payable in the manner and at the time
      provided in Section 6.10, such payment shall be based on the number of days
      that
      such condition exists. The parties agree that the only damages payable for
      a
      violation of the terms of this Agreement with respect to which liquidated
      damages are expressly provided shall be such liquidated damages. Notwithstanding
      the foregoing, no liquidated damages shall be payable pursuant to this Section
      6.11 during any period for which liquidated damages are payable pursuant to
      Section 6.10.  

    

    6.12 Use
      of Proceeds.
      The
      Company will use the net proceeds from the sale of the Securities, after payment
      of legal fees and other closing costs, for acquisitions and for working
      capital.

    

    6.13 Right
      of First Refusal.
      

    

    6.13.1 
      In the
      event that the Company seeks to raise additional funds through a
      private
      placement of its securities (a “Proposed
      Financing”),
      other
      than Exempt Issuances as to which this section does not apply, for a period
      of
      eighteen months after the Closing provided that the Investors continue to
      beneficially own in the aggregate at least 25% of Series A Preferred Sock or
      the
      Common Stock issued thereunder, each Investor shall have the right to
      participate in any subsequent funding by the Company of the offering price
      on a
      pro rata basis, based on the percentage that (a) the number of such Investor’s
      Percentage Shares, without regard to the 4.9% Limitation but excluding shares
      of
      Common Stock issuable upon exercise of Warrants, bears to (b) the total number
      of shares of Common Stock outstanding plus the number of Shares issuable upon
      conversion of the Series A Preferred Stock and any other series of convertible
      preferred stock or debt securities, without regard to the 4.9% Limitations
      any
      other limitations on exercise such other convertible preferred stock or debt
      securities. The term “Percentage
      Shares”
shall
      mean the number of Total Shares less the number of shares of Common Stock
      issuable upon exercise of outstanding Warrants. This Section 6.13 shall apply
      to
      each such offering based on the total purchase price of the securities being
      offered by the Company. This right is personal to the Investors and is not
      transferable, whether in connection with the sale of stock or otherwise.
 

     

    
      
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    6.13.2 The
      terms
      on which the Investors shall purchase securities pursuant to the Proposed
      Financing shall be the same as such securities are purchased by other investors.
      The Company shall give the Investors the opportunity to participate in the
      offering by giving the Investors not less than ten (10) days notice setting
      forth the terms of the Proposed Financing. In the event that the terms of the
      Proposed Financing are changed in a manner which is more favorable to the
      potential investor, the Company shall provide the Investors, at the same time
      as
      the notice is provided to the other potential investors, with a new ten (10)
      day
      notice setting forth the revised terms that are provided to the other potential
      investors.

    

    6.13.3 In
      the
      event that the Investors does not exercise its right to participate in the
      Proposed Financing within the time limits set forth in Section 6.13.2 of this
      Agreement, the Company may sell the securities in the Proposed Financing at
      a
      price and on terms which are no more favorable to the investors than the terms
      provided to the Investors. If the Company subsequently changes the price or
      terms so that the price is more favorable to the investors or so the terms
      are
      more favorable to the investors, the Company shall provide the Investors with
      the opportunity to purchase the securities on the revised terms in the manner
      set forth in Section 6.13.2
      of this
      Agreement.

    

    6.14 Price
      Adjustment.
      From
      the
      Closing Date until the Restriction Termination Date (except
      for Exempt Issuances as to which this Section
      6.14
      does not
      apply), if the Company closes on the sale or issuance of Common Stock at a
      sale
      price, or warrants, options, convertible
      debt or
      equity securities with a exercise or conversion price per share which is less
      than the Conversion Price (as defined in the Certificate of Designation) then
      in
      effect (such lower sales price, conversion or exercise price, as the case may
      be, being referred to as the “Lower
      Price”),
      the
      Conversion Price in effect from and after the date of such transaction shall
      be
      reduced to the Lower Price. For purpose of determining the exercise price of
      warrants issued by the Company, the purchase price, if any, paid per share
      for
      the warrants shall be added to the exercise price of the warrants. A similar
      provision shall be included in the Warrants, except that the adjustment in
      the
      warrant exercise price shall have a formula.

    

    6.15  Deliveries
      from Escrow Based on Pre-Tax Income Per Share.

    

    6.15.1 
      The
      Company hereby represents to the Investors that the Company’s consolidated
      Pre-Tax Income for the fiscal year ending December 31, 2007 shall be at least
      $3,000,000 and that the consolidated Pre-Tax Income for the fiscal year ending
      December 31, 2008 (assuming receipt by the Company of the Additional Financing)
      shall be at least $5,500,000.   As the Investors are relying on such
      expected profit in making their investment hereunder, and in order to attempt
      to
      make whole the Investors in the event these numbers are not met, the
      Company shall deliver to the Escrow Agent at the Closing the Make Good Escrow
      Stock.

     

    
      
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    6.15.2 
      In the
      event the Company’s consolidated Pre-Tax Income for the year ended December 31,
      2007 is less than $3,000,000 (or Pretax Income Per Share of $0.22 on a fully
      diluted basis (the “2007
      Target Number”)
      the
“2007
      Percentage Shortfall”
shall
      be computed by dividing the amount of the shortfall by the 2007 Target Number.
      Thus, for example, if the Company had Pre-tax Income for the fiscal year ending
      December 31, 2007 of $2 million (representing a shortfall of $1 million), the
      2007 Percentage Shortfall would be $1 million divided by $3 million, or
      one-third (1/3).  

    

    6.15.3 
      If the
      2007 Percentage Shortfall is equal to or greater than thirty three and one-third
      percent (33 1/3%), then the Escrow Agent shall deliver all of the Make Good
      Escrow Stock to the Investors in the ratio of their initial purchase of Series
      A
      Preferred Stock. In the event of that the Company has Pre-Tax Income of zero
      or
      a loss all of the Make Good Stock shall be delivered to the
      Investors.

    

    6.15.4 
      If the
      2007 Percentage Shortfall is less than thirty three and one-third percent (33
      1/3%), then the Escrow Agent shall (i) deliver to the Investors (in the ratio
      of
      their initial purchase of Series A Preferred Stock) the lesser of (a)such number
      of shares of the Make Good Escrow Stock as is determined by multiplying the
      2007
      Percentage Shortfall by 2,750,000 and (b) 900,000, and (ii) deliver to the
      Escrow Agent the remaining shares of Make Good Escrow Stock, if any (the
“Remaining
      Escrowed Shares”).
      

    

    6.15.5 
      In the
      event the Company’s consolidated Pre-Tax Income for the year ended December 31,
      2008 is less than $5,500,000 (or Pretax Income Per Share of $0.40 on a fully
      diluted basis (the “2008
      Target Number”)
      the
“2008
      Percentage Shortfall”
shall
      be computed by dividing the amount of the shortfall by the 2008 Target
      Number.

    

    6.15.6 
      If the
      2008 Percentage Shortfall is equal to or greater than thirty three and one-third
      percent (33 1/3%), then the Escrow Agent shall deliver all of the Remaining
      Escrowed Shares to the Investors in the ratio of their initial purchase of
      Series A Preferred Stock. 

    

    6.15.7 
      If the
      2008 Percentage Shortfall is less than thirty three and one-third percent (33
      1/3%), then the Escrow Agent shall (i) deliver to the Investors (in the ratio
      of
      their initial purchase of Series A Preferred Stock) the lesser of (a)such number
      of shares of the Make Good Escrow Stock as is determined by multiplying the
      2008
      Percentage Shortfall by 2,750,000 and (b) the Remaining Escrowed Shares and
      (ii)
      deliver to the Company for cancellation any Remaining Escrowed Shares.

    

    6.15.8 
      Notwithstanding anything to the contrary contained above or herein, in the
      event
      that the Company does not receive the Additional Financing, the Investors shall
      not be entitled to any of the Make Good Escrow Stock for 2008 and all Remaining
      Escrowed Shares shall be returned to the Company for cancellation. 

    

    6.15.9 
      For
      purpose of determining Pre-Tax Income Per Share on a fully-diluted basis, all
      shares of Common Stock issuable upon conversion of convertible securities and
      upon exercise of warrants and options (whether or not vested) shall be deemed
      to
      be outstanding, regardless of whether (i) such shares are treated as outstanding
      for determining diluted earnings per share under GAAP, (ii) such securities
      are
“in the money,” or (iii) such shares may be issued as a result of the 4.9%
      Limitation; provided,
      however,
      the
      shares of Common Stock issuable upon conversion of the Make Good Escrow Stock
      shall be not be deemed outstanding for purpose of this Section 6.15.

     

    
      
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    6.15.10 The
      distribution of shares of Common Stock pursuant to this Section 6.15 shall
      be
      made within five (5) business days after the Company files its Form 10-KSB
      for
      December 31, 2007 with the SEC. In the event that the Company does not file
      its
      Form 10-KSB with the SEC within thirty (30) days after the date that such filing
      is required, after any extension pursuant to Rule 12b-25 of the Exchange Act,
      all of the Make Good Escrow Shares shall be transferred to the Investors.

    

    6.15.11 The
      parties understand that, pursuant to the Stock Escrow Agreement, the Escrow
      Agent will not make any deliveries of shares without the signed written
      instructions from the Company and the Investors. 

    

    6.16 Insider
      Selling.
      No
Restricted
      Stockholders (as defined below) may sell any shares of Common Stock in the
      public market prior to the earlier of 24 months from the Closing Date or the
      Restriction Termination Date; provided,
      however,
      that if
      any Restricted Stockholder who is a director (and not an executive officer
      of
      the Company) shall cease to be a director, such Person may sell not more than
      a
      total of 50,000 shares of Common Stock in the public market during the period
      set forth in this sentence, provided further that this restriction shall only
      apply for
      so
      long as that the Investors continue to beneficially own in the aggregate at
      least 25% of Series A Preferred Sock or the Common Stock issued thereunder.
      “Restricted
      Stockholders”
shall
      mean any Person who is an officer, director or Affiliate of the Company on
      the
      date hereof or who becomes an officer or director of the Company subsequent
      to
      the Closing Date. Without
      limiting the generality of the foregoing, the Restricted Stockholders shall
      not,
      directly or indirectly, offer to sell, grant an option for the purchase or
      sale
      of, transfer, pledge assign, hypothecate, distribute or otherwise encumber
      or
      dispose of any securities in the Company in a transaction which is not in the
      public market unless the transferee agrees to be bound by the provisions of
      this
      Section 6.16. The
      Company shall require any newly elected officer or director to agree to the
      restriction set forth in this Section 6.16. Andrew Barron Worden and the
      Investors shall not be considered Restricted Stockholders. The restrictions
      in
      this Section 6.16 shall not apply to shares issued pursuant to a stock option
      or
      long-term incentive plans which may be approved by the Board of Directors or
      Compensation Committee provided that the Board of Directors or such committee,
      as the case may be, is comprised of a majority of independent directors.

    

    6.17 Employment
      and Consulting Contracts.
      For
      three
      years after the Closing, the Company shall obtain approval from the Board of
      Directors or Compensation Committee provided that the Board of Directors or
      such
      committee, as the case may be, is comprised of a majority of independent
      directors that any awards other than salary are customary, appropriate and
      reasonable for any officer, director or consultants whose compensation is more
      than $100,000 per annum. This Section 6.17 does not apply to attorneys,
      accountants and other persons who provide professional services to the Company.
      This section shall only apply for
      so
      long as that the Investors continue to beneficially own in the aggregate at
      least 25% of Series A Preferred Sock or the Common Stock issued
      thereunder.

     

    
      
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    6.18 Subsequent
      Equity Sales.
      For
      so
      long as the Investors continue to beneficially own at least 15% of the
      outstanding shares of the Series A Preferred Stock or Common Stock issued on
      conversion thereof, the Company shall be not effect or enter into an agreement
      to effect any Subsequent Financing involving a “Variable
      Rate Transaction”
or
      an
“MFN
      Transaction”
(each
      as defined below). The term “Variable
      Rate Transaction”
shall
      mean a transaction in which the Company issues or sells (i) any debt or equity
      securities that are convertible into, exchangeable or exercisable for, or
      include the right to receive additional shares of Common Stock either (A) at
      a
      conversion, exercise or exchange rate or other price that is based upon and/or
      varies with the trading prices of or quotations for the shares of Common Stock
      at any time after the initial issuance of such debt or equity securities, or
      (B)
      with a conversion, exercise or exchange price that is subject to being reset
      at
      some future date after the initial issuance of such debt or equity security
      or
      upon the occurrence of specified or contingent events directly or indirectly
      related to the business of the Company or the market for the Common Stock.
      The
      term “MFN
      Transaction”
shall
      mean a transaction in which the Company issues or sells any securities in a
      capital raising transaction or series of related transactions which grants
      to an
      investor the right to receive additional shares based upon future transactions
      of the Company on terms more favorable than those granted to such investor
      in
      such offering. Any Investor shall be entitled to obtain injunctive relief
      against the Company to preclude any such issuance, which remedy shall be in
      addition to any right to collect damages. Notwithstanding the foregoing, this
      Section 6.18 shall not apply in respect of an Exempt Issuance, except that
      no
      Variable Rate Transaction or MFN Transaction shall be an Exempt
      Issuance.

    

    6.19 Certificate
      of Designation. The
      Board
      of Directors has approved the Certificate of Designation. The
      Company shall file the Certificate of Designation with the Secretary of State
      of
      the State of Nevada prior to the Closing. 

    

    6.20 Stock
      Splits.
      All
      forward and reverse stock splits shall effect all equity and derivative holders
      proportionately.

    

    6.21 Retention
      of Investor Relations Firm.
      The
      Company shall instruct the Escrow Agent to retain one hundred fifty thousand
      ($150,000) of the proceeds of the sale of the Securities to be utilized for
      payment to investor relations firms. The Company shall retain an investor
      relations firm within 30 days after the Closing Date. 

    

    6.22 Payment
      of Due Diligence Expenses.
      At
      Closing the Escrow Agent shall disperse to Barron the sum of fifty thousand
      dollars ($50,000.00) for its due diligence expenses.  

    

    6.23 No
      Outside Interests.
      The
      Company’s chairman, chief executive officer and chief financial officer will
      devote their full time and attention to the business of the Company and shall
      not have any business interests or activities other than as chairman, chief
      executive officer or chief financial officer, as the case may be, except that
      he or she may devote time, which shall not be material and which shall not
      interfere with his or her duties as the Company’s chairman, chief executive
      officer or chief financial officer, as the case may be, to personal passive
      investments and charitable and community activities. This
      restriction shall only apply for
      so
      long as that the Investors continue to beneficially own in the aggregate at
      least 25% of Series A Preferred Sock or the Common Stock issued
      thereunder.

     

    
      
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    6.24 Related
      Party Transactions.  For
      so
      long as that the Investors continue to own in the aggregate at least 25% of
      Series A Preferred Stock or the Common Stock issued thereunder, all transactions
      with “related persons” (as defined by Item 404 of Regulation S-K) shall require
      the
      approval
      of the Board of Directors comprised of a majority of independent directors,
      provided, however,
      that
      such approval shall not be required for (i) single transactions where the amount
      involved is less than $200,000 and (ii) transactions in any three month period
      with an aggregate value of less than $400,000. 

    

    Article
      7 

    

    COVENANTS
      OF THE INVESTOR

    

    Each
      Investor, severally and not jointly, covenants and agrees with the Company
      as
      follows:

    

    7.1 Compliance
      with Law.
      Each
      Investor’s trading activities with respect to Company’s Common Stock will be in
      compliance with all applicable state and federal securities laws, rules and
      regulations and rules and regulations of any public market on which the Common
      Stock is listed.

    

    7.2 Limitation
      on Short Sales.
      The
      Investor and its affiliates shall not engage in short sales of the Company's
      Common Stock. 

    

    7.2 Transfer
      Restrictions. Each
      Investor acknowledges that (a) the Series A Preferred Stock, Warrants and the
      Shares have not been registered under the provisions of the 1933 Act, and may
      not be transferred unless (i) subsequently registered thereunder or (ii) the
      Investor shall have delivered to the Company an opinion of counsel, reasonably
      satisfactory in form, scope and substance to the Company, to the effect that
      the
      Series A Preferred Stock, Warrants and the Shares to be sold or transferred
      may
      be sold or transferred pursuant to an exemption from such registration; and
      (b)
      any sale of the Shares made in reliance on Rule 144 promulgated under the 1933
      Act may be made only in accordance with the terms of said Rule and further,
      if
      said Rule is not applicable, any resale of such securities under circumstances
      in which the seller, or the person through whom the sale is made, may be deemed
      to be an underwriter, as that term is used in the 1933 Act, may require
      compliance with some other exemption under the 1933 Act or the rules and
      regulations of the SEC thereunder.

    

    7.3 Restrictive
      Legend. Each
      Investor acknowledges and agrees that the Securities and the Shares shall bear
      a
      restrictive legend and a stop-transfer order may be placed against transfer
      of
      any such Securities except that the requirement for a restrictive legend shall
      not apply to Shares sold pursuant to a current and effective registration
      statement or a sale pursuant Rule 144 or any successor rule.

    

    Article
      7 

    

    CONDITIONS
      PRECEDENT TO THE COMPANY’S OBLIGATIONS

    

    The
      obligation of the Company to consummate the transactions contemplated hereby
      shall be subject to the fulfillment, on or prior to Closing Date, of the
      following conditions:

    

    8.1 No
      Termination.
      This
      Agreement shall not have been terminated pursuant to Article 10
      hereof.

     

    
      
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    8.2 Representations
      True and Correct.
      The
      representations and warranties of the Investors contained in this Agreement
      shall be true and correct in all material respects on and as of the Closing
      Date
      with the same force and effect as if made on as of the Closing
      Date.

    

    8.3 Compliance
      with Covenants.
      The
      Investors shall have performed and complied in all material respects with all
      covenants, agreements, and conditions required by this Agreement to be performed
      or complied by them prior to or at the Closing Date.

    

    8.4 No
      Adverse Proceedings.
      On the
      Closing Date, no action or proceeding shall be pending by any public authority
      or individual or entity before any court or administrative body to restrain,
      enjoin, or otherwise prevent the consummation of this Agreement or the
      transactions contemplated hereby or to recover any damages or obtain other
      relief as a result of the transactions proposed hereby. 

    

    Article
      9 

    

    CONDITIONS
      PRECEDENT TO INVESTOR’S OBLIGATIONS

    

    The
      obligation of the Investors to consummate the transactions contemplated hereby
      shall be subject to the fulfillment, on or prior to Closing Date unless
      specified otherwise, of the following conditions:

    

    9.1 No
      Termination.
      This
      Agreement shall not have been terminated pursuant to Article 10
      hereof.

    

    9.2 Representations
      True and Correct.
      The
      representations and warranties of the Company contained in this Agreement shall
      be true and correct in all material respects on and as of the Closing Date
      with
      the same force and effect as if made on as of the Closing Date.

    

    9.3 Compliance
      with Covenants .
      The
      Company shall have performed and complied in all material respects with all
      covenants, agreements, and conditions required by this Agreement to be performed
      or complied by it prior to or at the Closing Date.

    

    9.4 No
      Adverse Proceedings.
      On the
      Closing Date, no action or proceeding shall be pending by any public authority
      or individual or entity before any court or administrative body to restrain,
      enjoin, or otherwise prevent the consummation of this Agreement or the
      transactions contemplated hereby or to recover any damages or obtain other
      relief as a result of the transactions proposed hereby.

    

    Article
      10  

    

    TERMINATION,
      AMENDMENT AND WAIVER

    

    10.1 Termination.
      This
      Agreement may be terminated at any time prior to the Closing Date. 

    

    10.1.1 by
      mutual
      written consent of the Investors and the Company;

    

    10.1.2 by
      the
      Company upon a material breach of any representation, warranty, covenant or
      agreement on the part of any Investor set forth in this Agreement, or by any
      Investor upon a material breach of any representation, warranty, covenant or
      agreement on the part of the Company set forth in this Agreement, or if any
      representation or warranty of the Company or the Investor, respectively, shall
      have become untrue, in either case such that any of the conditions set forth
      in
      Article 8 or Article 9 hereof would not be satisfied (a “Terminating
      Breach”),
      and
      such breach shall, if capable of cure, not have been cured within five (5)
      business days after receipt by the party in breach of a notice from the
      non-breaching party setting forth in detail the nature of such
      breach.

     

    
      
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    10.2 Effect
      of Termination.
      Except
      as otherwise provided herein, in the event of the termination of this Agreement
      pursuant to Section 10.1 hereof, there shall be no liability on the part of
      the
      Company or any Investor or any of their respective officers, directors, agents
      or other representatives and all rights and obligations of any party hereto
      shall cease.

    

    10.3 Amendment.
      This
      Agreement may be amended by the parties hereto any time prior to the Closing
      Date by an instrument in writing signed by the parties hereto; provided,
      however
      that
      the
      4.9% Limitation may not be amended or waived.

    

    10.4 Waiver.
      At any
      time prior to the Closing Date, the Company or the Investors, as appropriate,
      may: (a) extend the time for the performance of any of the obligations or other
      acts of the other party or; (b) waive any inaccuracies in the representations
      and warranties contained herein or in any document delivered pursuant hereto
      which have been made to it or them; or (c) waive compliance with any of the
      agreements or conditions contained herein for its or their benefit other than
      the 4.9% Limitation which may not be waived. Any such extension or waiver shall
      be valid only if set forth in an instrument in writing signed by the party
      or
      parties to be bound thereby.

    

    Article
      11 

    

    GENERAL
      PROVISIONS

    

    11.1 Transaction
      Costs
      Except
      as otherwise provided herein, each of the parties shall pay all of his or its
      costs and expenses (including attorney fees and other legal costs and expenses
      and accountants’ fees and other accounting costs and expenses) incurred by that
      party in connection with this Agreement; provided, the Company shall pay the
      Investors the due diligence expenses as described in Section 6.22.

    

    11.2 Indemnification.
      

    

    (a) The
      Investors agrees to indemnify, defend and hold the Company (following the
      Closing Date) and its officers and directors harmless against and in respect
      of
      any and all claims, demands, losses, costs, expenses, obligations, liabilities
      or damages, including interest, penalties and reasonable attorney’s fees, that
      any of them shall incur or suffer, which arise out of or result from any breach
      of this Agreement by the Investors or failure by the Investors to perform with
      respect to the representations, warranties or covenants contained in this
      Agreement or in any exhibit or other instrument furnished or to be furnished
      under this Agreement. The indemnification by the Investors shall be limited
      to
      $50,000.00.

    

    (b) The
      Company agrees to indemnify, defend and hold the Investors (following the
      Closing Date) harmless against and in respect of any and all claims, demands,
      losses, costs, expenses, obligations, liabilities or damages, including
      interest, penalties and reasonable attorney’s fees, that it shall incur or
      suffer, which arise out of, result from or relate to any breach of this
      Agreement or failure by the Company to perform with respect to the
      representations, warranties or covenants contained in this Agreement or in
      any
      exhibit or other instrument furnished or to be furnished under this
      Agreement.

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          25

        
          

        

      

      
        
        

      

    

     

    (c) 
      In no
      event shall the Company or the Investors be entitled to recover consequential
      or
      punitive damages resulting from a breach or violation of this Agreement nor
      shall any party have any liability hereunder in the event of gross negligence
      or
      willful misconduct of the indemnified party. In the event of the failure of
      the
      Company to issue the Series A Preferred Stock and Warrants in violation of
      the
      provisions of this Agreement, the Investors, as their sole remedy, shall be
      entitled to pursue a remedy of specific performance upon tender into the Court
      an amount equal to the Purchase Price hereunder. This Section 11.2 shall not
      relate to indemnification under the Registration Rights Agreement.

    

    11.3 Headings.
      The
      table of contents and headings contained in this Agreement are for reference
      purposes only and shall not affect in any way the meaning or interpretation
      of
      this Agreement.

    

    11.4 Entire
      Agreement.
      This
      Agreement (together with the Schedule, Exhibits, and agreements and documents
      referred to herein) constitute the entire agreement of the parties and
      supersedes all prior agreements and undertakings, both written and oral, between
      the parties, or any of them, with respect to the subject matter hereof.

    

    11.5 Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been given (i) on the date they are delivered if delivered in
      person; (ii) on the date initially received if delivered by facsimile
      transmission followed by registered or certified mail confirmation; (iii) on
      the
      date delivered by an overnight courier service; or (iv) on the third business
      day after it is mailed by registered or certified mail, return receipt requested
      with postage and other fees prepaid as follows:

    

    If
      to
      the Company:

    

    Mr.
      Deli
      Du, CEO

    Deli
      Solar (USA), Inc. 

    Building
      3 No 28, Feng Tai North Road,

    Beijing,
      CHINA 100071

    E-mail:
      

    

    With
      a
      copy to:

    

    Guzov
      Ofsink, LLC

    600
      Madison

    New
      York,
      New York 10022

    Attention:
      Darren Ofsink

    E-mail:
      dofsink@golawintl.com

    Fax:
      (212) 688-7273

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          26

        
          

        

      

      
        
        

      

    

     

    If
      to
      Barron:

    

    Barron
      Partners L.P.

    c/o
      Barron Capital Advisors, LLC

    730
      Fifth
      Avenue, 25th
      Floor

    New
      York,
      New York 10019

    Attn:
      Andrew Barron Worden

    E-mail:
      abw@barronpartners.com
      and
onf@barronpartners.com 

    Fax:
      (212)
      359-0222

    

    If
      to the
      other Investors, at their addresses set forth on Appendix A.

    

    11.6 Severability.
      If any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any rule of law or public policy, all other conditions and
      provisions of this Agreement shall nevertheless remain in full force and effect
      so long as the economic or legal substance of the transactions contemplated
      hereby is not affected in any manner materially adverse to any party. Upon
      such
      determination that any such term or other provision is invalid, illegal or
      incapable of being enforced, the parties hereto shall negotiate in good faith
      to
      modify this Agreement so as to effect the original intent of the parties as
      closely as possible in an acceptable manner to the end that the transactions
      contemplated hereby are fulfilled to the extent possible.

    

    11.7 Binding
      Effect.
      All the
      terms and provisions of this Agreement whether so expressed or not, shall be
      binding upon, inure to the benefit of, and be enforceable by the parties and
      their respective administrators, executors, legal representatives, heirs,
      successors and assignees. 

    

    11.8 Preparation
      of Agreement.
      This
      Agreement shall not be construed more strongly against any party regardless
      of
      who is responsible for its preparation. The parties acknowledge each contributed
      and is equally responsible for its preparation. In
      resolving any dispute regarding, or construing any provision in, this Agreement,
      there shall be no presumption made or inference drawn because of the drafting
      history of the Agreement, or because of the inclusion of a provision not
      contained in a prior draft or the deletion or modification of a provision
      contained in a prior draft.

    

    11.9 Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of New York, without giving effect to applicable principles of
      conflicts of law.

    

    11.10 Jurisdiction;
      Waiver of Jury Trial.
      If
      any action is brought among the parties with respect to this Agreement or
      otherwise, by way of a claim or counterclaim, the parties agree that in any
      such
      action, and on all issues, the parties irrevocably waive their right to a trial
      by jury.
      Exclusive jurisdiction and venue for any such action shall be the federal and
      state courts situated in the City, County and State of New York. In the event
      suit or action is brought by any party under this Agreement to enforce any
      of
      its terms, or in any appeal therefrom, it is agreed that the prevailing party
      shall be entitled to reasonable attorneys fees to be fixed by the arbitrator,
      trial court, and/or appellate court if such party prevails on substantially
      all
      issues in dispute.

    

    11.11
      Preparation
      and Filing of Securities and Exchange Commission
      filings.
      The
      Investors shall reasonably assist and cooperate with the Company in the
      preparation of all filings with the SEC after the Closing Date due after the
      Closing Date. 

    

    11.12 Further
      Assurances, Cooperation.
      Each
      party shall, upon reasonable request by the other party, execute and deliver
      any
      additional documents necessary or desirable to complete the transactions herein
      pursuant to and in the manner contemplated by this Agreement. The parties hereto
      agree to cooperate and use their respective best efforts to consummate the
      transactions contemplated by this Agreement.

     

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          27

        
          

        

      

      
        
        

      

    

     

    11.13 Survival.
      The
      representations, warranties, covenants and agreements made herein shall survive
      the Closing of the transaction contemplated hereby. 

    

    11.14 Third
      Parties.
      Except
      as disclosed in this Agreement, nothing in this Agreement, whether express
      or
      implied, is intended to confer any rights or remedies under or by reason of
      this
      Agreement on any persons other than the parties hereto and their respective
      administrators, executors, legal representatives, heirs, successors and
      assignees. Nothing in this Agreement is intended to relieve or discharge the
      obligation or liability of any third persons to any party to this Agreement,
      nor
      shall any provision give any third persons any right of subrogation or action
      over or against any party to this Agreement.

    

    11.15 Failure
      or Indulgence Not Waiver; Remedies Cumulative.
      No
      failure or delay on the part of any party hereto in the exercise of any right
      hereunder shall impair such right or be construed to be a waiver of, or
      acquiescence in, any breach of any representation, warranty, covenant or
      agreement herein, nor shall nay single or partial exercise of any such right
      preclude other or further exercise thereof or of any other right. All rights
      and
      remedies existing under this Agreement are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    

    11.16 Counterparts.
      This
      Agreement may be executed in one or more counterparts, and by the different
      parties hereto in separate counterparts, each of which when executed shall
      be
      deemed to be an original, but all of which taken together shall constitute
      one
      and the same agreement. A facsimile transmission of this signed Agreement shall
      be legal and binding on all parties hereto. 

     

    [SIGNATURES
      ON FOLLOWING PAGE]

    

    
      
        SECURITIES
          PURCHASE AGREEMENT BETWEEN 

        DELI
          SOLAR (USA), INC. AND BARRON PARTNERS LP

        
        

      

      
        PAGE
          28

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Investors and the Company have as of the date first written above executed
      this
      Agreement.

     

     

    
      	THE
              COMPANY:	 	 	 
	 	 	 	 
	DELI SOLAR (USA),
              INC.	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/
              Deli
              Du 	 	 	 
	 	
              
Deli
              Du, President and 	 	 	
            
	 	Chief
              Executive
              Officer	 	 	 

    

    
       

      
        	INVESTORS:	 	 	 
	 	 	 	 
	BARRON PARTNERS LP	 	 	 
	By: 	Barron Capital Advisors, LLC, its
                General
                Partner	 	 	 
	 	 	 	 	 
	 	/s/
                Andrew
                Barron  Worden	 	 	 
	 	
                
Andrew
                Barron Worden, President	 	 	
              
	 	 	 	 	 

      

      
         

        
          	EOS HOLDINGS	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/
                  Jon
                  R.Carnes 	 	 	 
	 	
                  
Jon
                  R.Carnes, President	 	 	
                

        

        
           

          
            	 	 	 	 	 
	 	/s/
                    Matthew
                    Hayden  	 	 	 
	 	
                    
Matthew
                    Hayden	 	 	
                  
	 	 	 	 	 

          

          
             

          

        

      

    

    The
      undersigned hereby agrees to be bound by the provisions of Sections 6.15, 6.16
      and 6.23 of this Agreement.

     

    
      
        
          	 	 	 	 	 
	 	/s/
                  Deli
                  Du	 	 	 
	 	
                  
Deli
                  Du	 	 	
                
	 	 	 	 	 

        

        
           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

        

      

    

    Schedule
      A

     

    
      	
              Name
                and

              Address

            	
              Amount
                of Investment

            	
              Number
                of Shares 

              of
                Series A Preferred Stock 

            	
              Number
                of 

              Shares
                Underlying Series A Preferred Stock 

            	
              Number
                of Shares

              Underlying
                $1.90 Warrants

            	
              Number
                of Shares

              Underlying
                $2.40 Warrants

            
	
              Barron
                Partners LP

              730
                Fifth Avenue, 25th
                Floor

              New
                York, New York 10019

              Attn:
                Andrew Barron Worden

            	
              $2,550,000

            	
              1,645,162
                

            	
              1,645,162
                

            	
              1,645,162
                

            	
              1,645,162
                

            
	
              Eos
                Holdings, LLC

              2560
                Highvale Dr.

              Las
                Vegas, NV 89134

              Attn:
                Jon R. Carnes, President

            	
              $100,000
                

            	
              64,516
                

            	
              64,516
                

            	
              64,516
                

            	
              64,516
                

            
	
              Matthew
                Hayden

            	
              $100,000
                

            	
              64,516
                

            	
              64,516
                

            	
              64,516
                

            	
              64,516
                

            
	 	
              $2,750,000

            	
              1,774,194
                

            	
              1,774,194
                

            	
              1,774,194
                

            	
              1,774,194
                

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A

    

    

    Form
      of Certificate of Designation of Preferences, Rights and
      Limitations

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B

    

    Closing
      Escrow Agreement 

    

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Exhibit
      C

    

    Escrow
      Agreement 

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      D

    

    Registration
      Rights Agreement

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      E-1

    

    $1.90
      Warrants

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      E-2

    

    $2.40
      WarrantsUnassociated Document

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    THIS
      REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
      is
      made and entered into as of 13th
      day of
      June, 2007, by and among Deli
      Solar (USA), Inc.,
      a
      Nevada corporation (the “Company”),
      and
Barron
      Partners L.P.,
      a
      Delaware limited partnership, and the other investors who execute this
      Agreement. (collectively,
      the “Investors”
and
      each, an “Investor”).
      Unless
      defined otherwise, capitalized terms herein shall have the identical meaning
      as
      in the Securities Purchase Agreement of even date herewith (the “Purchase
      Agreement”),
      by
      and among the Company and the Investors.

    

    PRELIMINARY
      STATEMENT

    

    WHEREAS,
      pursuant to the Purchase Agreement, the Investors are purchasing shares of
      Series A Preferred Stock and Warrants, which entitle the Investor to receive
      shares of Common Stock upon conversion or exercise thereof, such shares being
      referred to as the “Shares”;
      and

    

    WHEREAS,
      the
      ability of the Investors to sell their Shares is subject to certain restrictions
      under the 1933 Act; and

    

    WHEREAS,
      as a
      condition to the purchase of the Series A Preferred Stock and Warrants pursuant
      to the Purchase Agreement, the Company has agreed to provide the Investors
      with
      a mechanism that will permit the Investors to sell the Shares in the
      future.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and of the mutual covenants and agreements, and
      subject to the terms and conditions herein contained, the parties hereto hereby
      agree as follows:

    

    ARTICLE
      I

    

    INCORPORATION
      BY REFERENCE

    

    1.1. Incorporation
      by Reference.
      The
      foregoing recitals and the Exhibits attached hereto and referred to herein,
      are
      hereby acknowledged to be true and accurate, and are incorporated herein by
      this
      reference.

    

    1.2. Supersedes
      Other Agreements.
      This
      Agreement, to the extent that it is inconsistent with any other instrument
      or
      understanding among the parties relating to the subject matter of this
      Agreement, shall supersede such instrument or understanding to the fullest
      extent permitted by law. A copy of this Agreement shall be filed at the
      Company’s principal office.

    

    1.3. Definitions.
      All
      terms defined in the Purchase Agreement and used in this Agreement shall have
      the same meanings in this Agreement as in the Purchase Agreement. As used in
      this Agreement the following terms shall have the meanings hereinafter set
      forth.

    

    (i) “Excusable
      Reason”
shall
      have the meaning set forth in Section 2.6 of this Agreement.

    

    (ii) “Filing
      Date”
shall
      mean (i) with respect to the Initial Registration Statement, the 60th
      calendar
      day following the date hereof and (ii) with respect to any Subsequent
      Registration Statements, the later of (a) ninety (90) days after the Company
      receives a demand for registration of additional Registrable Securities or
      (b)
      thirty days following the earliest practical date on which the Company is
      permitted by SEC Guidance to file such additional Registration Statement related
      to the Registrable Securities (which is at least 180 days from the effective
      date of the Initial Registration Statement.) If any Filing Date or Required
      Effectiveness Date occurs on a date which is either (x) a Saturday, Sunday
      or
      day on which banks in the State or New York are authorized or required to be
      closed on all or part of the normal business day or (y) the SEC is closed for
      all or a portion of the business day, the Filing Date or Required Effective
      Date, as the case may be, shall the next day which is not a day described in
      clauses (x) or (y).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii) “Initial
      Registration Statement”
shall
      mean the Registration Statement filed pursuant to Section 2.2 of this
      Agreement.

    

    (iv) “Subsequent
      Registration Statements”
shall
      mean one or more Registration Statements filed pursuant to Section 2.3 of this
      Agreement.

    

    (v) “Registrable
      Securities”
shall
      mean and include the Shares issuable upon conversion of the Series A Preferred
      Stock and upon exercise of the Warrants issued pursuant to the Purchase
      Agreement. As to any particular Registrable Securities, such securities will
      cease to be Registrable Securities when (a) they have been effectively
      registered under the 1933 Act and disposed of in accordance with the
      registration statement covering them, (b) they are or may be freely traded
      without registration pursuant to Rule 144, or (c) they have been otherwise
      transferred and new certificates for them not bearing a restrictive legend
      have
      been issued by the Company and the Company shall not have “stop transfer”
instructions against them. 

    

    (vi) “Registration
      Expenses”
shall
      mean all expenses incident to the Company’s performance of or compliance with
      its obligations under this Agreement, including, without limitation, all
      registration, filing, listing, stock exchange and NASD fees, all fees and
      expenses of complying with state securities or blue sky laws (including fees,
      disbursements and other charges of counsel for the underwriters only in
      connection with blue sky filings), all word processing, duplicating and printing
      expenses, messenger and delivery expenses, the fees, disbursements and other
      charges of counsel for the Company and of its independent public accountants,
      including the expenses incurred in connection with “cold comfort” letters
      required by or incident to such performance and compliance, any fees and
      disbursements of underwriters customarily paid by the issuer of securities,
      but
      excluding from the definition of Registration Expenses underwriting discounts
      and brokerage commissions and applicable transfer taxes, if any, or legal and
      other expenses incurred by any sellers, which discounts, commissions, transfer
      taxes and legal and other expenses shall be borne by the seller or sellers
      of
      Registrable Securities in all cases.

    

    (vii) “Registration
      Statement”
shall
      mean the registration statement required to be filed pursuant to Section 2.2
      of
      this Agreement hereunder and any additional registration statements contemplated
      by Section 2.3, 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.

    

    (viii) “Required
      Effective Date”
shall
      mean the first to occur of (i) 150 days following the Filing Date with respect
      to the Registration Statement, (ii) ten (10) days following the receipt of
      a “No
      Review” or similar letter from the SEC or (iii) the third (3rd) business day
      following the day the Company receives notice from the SEC that the SEC has
      determined that the Registration Statement eligible to be declared effective
      without further comments by the SEC; provided,
      however,
      that in
      no event shall the Required Effective Date of a Subsequent Registration
      Statement be earlier than the earliest date on which, based on SEC Guidance,
      the
      SEC will declare effective such Registration Statement. 

    

    (ix) “Rule
      144”
means
      Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended or interpreted from time to time, or any similar rule or
      regulation hereafter adopted by the Commission having substantially the same
      purpose and effect as such Rule.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

    (xi) “Rule
      424”
means
      Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended or interpreted from time to time, or any similar rule or
      regulation hereafter adopted by the Commission having substantially the same
      purpose and effect as such Rule.

    

    (xii) “SEC
      Guidance”
means
      (i) any publicly-available written or oral guidance, comments, requirements
      or
      requests of the Commission staff and (ii) the Securities Act.

    

    ARTICLE
      II

    

    REQUIRED
      REGISTRATION OF REGISTRABLE SECURITIES

    

    2.1. Registrable
      Securities.
      The
      Company shall file one or more Registration Statements covering the Registrable
      Securities as provided in Sections 2.2 and 2.3 of this Agreement.

    

    2.2. Registration
      of Registrable Securities.
      The
      Company shall prepare and file the Initial Registration Statement covering
      the
      sale of such number of shares of the Registrable Securities as the Investors
      shall elect by written notice to the Company, and absent such election, covering
      the sale of all of the Registrable Securities. The Company shall use its
      commercially reasonable best efforts to cause the Initial Registration Statement
      to be declared effective by the SEC on the Required Effective Date. Subject
      to
      SEC Guidance on the number of Shares which may be registered pursuant to Rule
      415, nothing contained in this Agreement shall be deemed to limit the number
      of
      Registrable Securities to be registered by the Company hereunder. As a result,
      should the Initial Registration Statement not relate to the maximum number
      of
      Registrable Securities (other than as a result of the election by a holder
      thereof not to have Shares included in the Initial Registration Statement unless
      such election was made with a view to meeting the SEC Guidance relating to
      Rule
      415), the Company shall be required to promptly file a separate Registration
      Statement (utilizing Rule 462 promulgated under the 1933 Act, if applicable,
      to
      the extent that it may do so) relating to such Registrable Securities which
      then
      remain unregistered, subject to the SEC Guidance on the earliest day on which
      such Registration Statement may be filed. The provisions of this Agreement
      shall
      relate to any such separate registration statement as if it were an amendment
      to
      the Registration Statement. No shares of Common Stock or other securities shall
      be included in the Initial or any Subsequent Registration Statement other than
      Shares issued or issuable to the Investors and their transferees who hold
      Registrable Securities; it being understood that the Initial and Subsequent
      Registration Statements shall relate solely to Registrable Securities, and
      the
      Company shall not file any registration statement with respect to other
      securities if the effect thereof would be to impair the ability of the Investors
      to have registered the maximum number of Registrable Securities which are
      permitted based on SEC Guidance. 

    

    2.3. Subsequent
      Registration.
      Subject
      to the limitations of Section 2.2, at any time and from time to time, the
      Investors may request the registration under the 1933 Act on a Subsequent
      Registration Statement of all or part of the Registrable Securities nor
      previously sold or subject to an effective registration statement. Subject
      to
      the conditions of Section 2.6 of this Agreement, the Company shall use its
      commercially reasonable best efforts to file such registration statement under
      the 1933 Act by the Filing Date and have the Subsequent Registration Statement
      declared effective by the Required Effective Date. The Company shall notify
      the
      Investor promptly when any such subsequent Registration Statement has been
      declared effective. The parties intend that all Registrable Securities are
      to be
      registered pursuant to Section 2.2, and that this Section 2.3 is intended to
      provide the Investors with registration rights in the event that all of the
      Registrable Securities are not included in the Initial Registration Statement
      required by Section 2.2, either because the number of Registrable Securities
      had
      to be reduced in order for the offering to be deemed a secondary offering under
      Rule 415 based on SEC Guidance or because the Investors believed that the SEC
      Guidance would not permit the registration of all of the Registrable Securities.
      If more than eighty percent (80%) of the Shares have been registered and sold
      (either pursuant to the Registration Statement or Rule 144) the Company’s
      obligations under this Article II shall terminate. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.4. Registration
      Statement Form.
      Registrations under Section 2.2 and Section 2.3 shall be on the appropriate
      registration form of the SEC as shall permit the disposition of such Registrable
      Securities in accordance with the intended method or methods of disposition
      specified in the Registration Statement; provided, however,
      such
      intended method of disposition shall not include an underwritten offering of
      the
      Registrable Securities.

    

    2.5. Expenses.
      The
      Company will pay all Registration Expenses in connection with any Initial or
      Subsequent Registration Statement and any registration statement in which
      Registrable Securities are included pursuant to Article III of this Agreement.
      

    

    2.6. Effective
      Registration Statement.
      An
      Initial or Subsequent Registration Statement shall not be deemed to have been
      effected, other than for an Excusable Reason (as hereinafter defined): (i)
      unless a registration statement with respect thereto has become effective,
      provided
      that a
      registration which does not become effective after the Company filed a
      registration statement with respect thereto solely by reason of the refusal
      to
      proceed of any holder of Registrable Securities (other than a refusal to proceed
      based upon the advice of counsel in the form of a letter signed by such counsel
      and provided to the Company relating to a disclosure matter unrelated to such
      holder) shall be deemed to have been effected by the Company; (ii) if, after
      it
      has become effective, such registration statement becomes subject to any stop
      order, injunction or other order or extraordinary requirement of the SEC or
      other governmental agency or court for any reason and such stop order or other
      action continues in effect for five trading days; or (iii) if, after it has
      become effective, such registration ceases to be effective other than for an
      Excusable Reason.

    

    An
      “Excusable
      Reason”
means
      (i) the occurrence of negotiations with respect to a material agreement prior
      to
      either the announcement of the execution of the agreement or the termination
      of
      the negotiations with respect to such proposed agreement or (ii) other similar
      material corporate events to which the Company is a party or expects to be
      a
      party if, in the reasonable judgment of the Company, disclosure of the
      negotiations or other event would be adverse to the best interests of the
      Company provided that the Company is continuing to treat such negotiations
      as
      confidential and provided further that the period during which the Company
      is
      precluded from filing the registration statement (or suspended the use of an
      effective registration statement) as a result thereof has not exceeded twenty
      (20) trading days in the aggregate, and provided further that the Company shall
      not be permitted to avoid filing a registration statement (or to suspend the
      use
      of an effective registration statement) for an Excusable Reason more than twice
      in any one-year period. An Excusable Reason shall also include Acts of God
      and
      closure of the SEC.

    

    2.7. Plan
      of
      Distribution.
      The
      Company hereby agrees that the Registration Statement shall include a plan
      of
      distribution section reasonably acceptable to the Investors; provided,
      however,
      such
      plan of distribution section shall be modified by the Company so as to not
      provide for the disposition of the Registrable Securities on the basis of an
      underwritten offering.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.8. Liquidated
      Damages.

    

    (i) In
      the
      event (a) the Company does not file an Initial Registration Statement or
      Subsequent Registration Statement by the applicable Filing Date, or (b) the
      Registration Statement is not declared effective by the Required Effectiveness
      Date, or (c) if the Registrable Securities are registered pursuant to an
      effective Registration Statement and such Registration Statement or other
      Registration Statement(s) demanded by Investor including the Registrable
      Securities is not effective in the period from the Required Effective Date
      through two years following the date hereof other than for an Excusable
      Reason,
      the
      Company shall, for each such day (x) after the Filing Date that the Company
      shall not have filed the Registration Statement, (y) after the Required
      Effectiveness Date that the Registration Statement shall not have been declared
      effective, or (z) during which the Registration Statement is not effective
      as
      required by clause (c) of this Section 2.8(i), issue to the Investor, as
      liquidated damages and not as a penalty, 17,742 shares of Series A Preferred
      Stock for each month (if less than a whole month, prorated for each day), such
      issuance shall be made no later than the tenth business day of the calendar
      month next succeeding the month in which such day occurs. However, in no event
      shall the Company be required to pay any liquidated damages under this Section
      2.8 in an amount exceeding 266,129 shares of Series A Preferred Stock in the
      aggregate (as adjusted pursuant to the terms of the Certificate of Designation).
      Any Registrable Shares which has been sold pursuant to a Registration Statement
      shall not be deemed to be Shares covered by the Registration
      Statement.

    

    (ii) Notwithstanding
      anything to the contrary contained in this Agreement the parties hereto agree
      as
      follows: The Company agrees to use its commercially reasonable best efforts
      to
      file an Initial Registration Statement within 60 days of the Closing of this
      transaction covering 100% of the Registrable Securities (or such lesser number
      as the SEC deems appropriate). As soon as reasonably practicable (but no later
      than 30 days) following the date on which the Company is permitted by then
      current SEC Guidance to file a Subsequent Registration Statement the Company
      shall use its commercially reasonable best efforts to file a Subsequent
      Registration Statement covering 100% of the remaining Registrable Securities
      (or
      such lesser number as the SEC deems appropriate). The Company agrees to continue
      this process until such time as all of the Registrable Securities shall have
      been registered. In no event will any liquidated damages be payable by the
      Company on shares that the SEC deems not appropriate for registration pursuant
      to Rule 415 if the Company complies with this Section 2.8 (ii).

    

    (iii) Notwithstanding
      the provisions of Section 2.8(i):

    

    (a)
      In
      the event that the Company shall fail to file the Registration Statement by
      the
      Filing Date but the Registration Statement shall have been declared effective
      by
      the Required Effectiveness Date, then no liquidated damages shall be payable
      with respect to the failure to file by the Filing Date. The Company may defer
      the issuance of any such shares of Preferred Stock until the first date after
      the Required Effectiveness Date that the Company is required to pay liquidated
      damages pursuant to Section 2.8(i).

    

    (b)
      Any
      liquidated damages payable as a result of the failure to file the Registration
      Statement by the Filing Date shall be credited against liquidated damages
      payable as a result of the failure of the Registration Statement to be declared
      effective by the Required Effectiveness Date.

    

    (c)
      No
      fractional shares shall be issued. Any fractional shares which would otherwise
      be issued on any date on which Series A Preferred Stock is to be issued pursuant
      to Section 2.8(i) of this Agreement, shall be carried forward; provided, however,
      that if,
      at the expiration of the period during which liquidated damages is payable
      there
      remains a fractional share which has not been applied to liquidated damages,
      the
      Company shall have no further obligation to issue such fractional
      share.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv) In
      no
      event shall the Company be required to pay any liquidated damages in the event
      that the failure of to file or be declared effective on the requisite dates
      results in whole or in part from either (a) the failure of any Investor to
      provide information relating to the Investor and its proposed method of sale
      or
      any other information concerning the Investor that is required to be included
      in
      the registration statement or (b) any delays resulting from questions or issues
      raised by the SEC or any other regulatory agency, market or exchange concerning
      any Investor (or the affiliates of any Investor) or relating to Rule 415 or
      to
      the structure of the sale or resale of the Securities or (c) issues resulting
      from or relating to acts or omissions of persons or entities other than the
      Company or its affiliates. 

    

    (v) The
      parties hereto agree that the liquidated damages provided for in this Section
      2.8 constitute a reasonable estimate of the damages that may be incurred by
      the
      Investor by reason of the failure of the Registration Statement(s) to be filed
      or declared effective in accordance with the provisions hereof.

    

    (vi) The
      obligation of the Company terminates when the Investor no longer holds more
      than
      ten (10%) percent of the Registrable Securities, based on the number of
      Registrable Securities initially issuable pursuant to the Purchase Agreement
      and
      any shares issued due to adjustments in these transaction documents and the
      Warrants.

    

    ARTICLE
      III

    

    INCIDENTAL
      REGISTRATION RIGHTS

    

    3.1. Right
      To Include (“Piggy-Back”) Registrable Securities.
      Provided that the Registrable Securities have not been registered, if at any
      time after the date hereof but before the second anniversary of the date hereof,
      the Company proposes to register any of its securities under the 1933 Act (other
      than by a registration in connection with an acquisition in a manner which
      would
      not permit registration of Registrable Securities for sale to the public, on
      Form S-8, or any successor form thereto, on Form S-4, or any successor form
      thereto and other than pursuant to Section 2), on an underwritten basis (either
      best-efforts or firm-commitment), then, the Company will each such time give
      prompt written notice to all holders of Registrable Securities of its intention
      to do so and of such holders of Registrable Securities’ rights under this
      Section 3.1. Upon the written request of any such holders of Registrable
      Securities made within ten (10) days after the receipt of any such notice (which
      request shall specify the Registrable Securities intended to be disposed of
      by
      such holders of Registrable Securities and the intended method of disposition
      thereof), the Company will, subject to the terms of this Agreement, use its
      commercially reasonable best efforts to effect the registration under the 1933
      Act of the Registrable Securities, to the extent requisite to permit the
      disposition (in accordance with the intended methods thereof as aforesaid)
      of
      such Registrable Securities so to be registered, by inclusion of such
      Registrable Securities in the registration statement which covers the securities
      which the Company proposes to register, provided that if, at any time after
      written notice of its intention to register any securities and prior to the
      effective date of the registration statement filed in connection with such
      registration, the Company shall determine for any reason either not to register
      or to delay registration of such securities, the Company may, at its election,
      give written notice of such determination to each holders of Registrable
      Securities and, thereupon, (i) in the case of a determination not to register,
      shall be relieved of this obligation to register any Registrable Securities
      in
      connection with such registration (but not from its obligation to pay the
      Registration Expenses in connection therewith), without prejudice, however,
      to
      the rights of any holder or holders of Registrable Securities entitled to do
      so
      to request that such registration be effected as a registration under Section
      2,
      and (ii) in the case of a determination to delay registering, shall be permitted
      to delay registering any Registrable Securities, for the same period as the
      delay in registering such other securities. No registration effected under
      this
      Section 3.1 shall relieve the Company of its obligation under Section 2 of
      this
      Agreement other than with respect to Registrable Securities registered and
      sold
      pursuant to such registration statement. The Company will pay all Registration
      Expenses in connection with each registration of Registrable Securities
      requested pursuant to this Section 3.1.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.2. Priority
      In Incidental Registrations.
      If the
      managing underwriter of the underwritten offering contemplated by this Section
      3
      shall inform the Company and holders of the Registrable Securities requesting
      such registration by letter of its belief that the number of securities
      requested to be included in such registration exceeds the number which can
      be
      sold in such offering, then the Company will include in such registration,
      to
      the extent of the number which the Company is so advised can be sold in such
      offering, (i) first securities proposed by the Company to be sold for its own
      account, and (ii) second to holders of securities having demand registration
      rights and exercising such rights in connection with such registration
      statement, (iii) third Registrable Securities, and for (iv) fourth to securities
      of other selling security holders (including officers, directors and 5%
      stockholders, subject to any lock-up agreements with such persons) who requested
      to be included in such registration.

    

    ARTICLE
      IV

    

    REGISTRATION
      PROCEDURES

    

    4.1. Registration
      Procedures.
      If and
      whenever the Company is required to effect the registration of any Registrable
      Securities under the 1933 Act as provided in Section 2.2 and, as applicable,
      2.3, the Company shall, as expeditiously as possible:

    

    (i) prepare
      and file with the SEC the Registration Statement, or amendments thereto, to
      effect such registration (including such audited financial statements as may
      be
      required by the 1933 Act or the rules and regulations promulgated thereunder)
      and thereafter use its commercially reasonable best efforts to cause such
      registration statement to be declared effective by the SEC, as soon as
      practicable, but in any event no later than the Required Effectiveness Date
      (with respect to a registration pursuant to Section 2.2); provided,
      however,
      that
      before filing such registration statement or any amendments thereto, the Company
      will furnish to the counsel selected by the holders of Registrable Securities
      which are to be included in such registration, copies of all such documents
      proposed to be filed;

    

    (ii) with
      respect to any Initial or Subsequent Registration Statement, prepare and file
      with the SEC such amendments and supplements to such Registration Statement
      and
      the prospectus used in connection therewith as may be necessary to keep such
      registration statement effective and to comply with the provisions of the 1933
      Act with respect to the disposition of all Registrable Securities covered by
      such registration statement until the earlier to occur of twenty four (24)
      months after the date of this Agreement (subject to the right of the Company
      to
      suspend the effectiveness thereof for an Excusable Reason (each a “Black-Out
      Period”))
      or
      such time as all of the securities which are the subject of such registration
      statement cease to be Registrable Securities (such period, in each case, the
      “Registration
      Maintenance Period”).
      The
      Company shall notify the Investors within twenty four (24) hours prior to any
      Black-Out Period;

    

    (iii) furnish
      to each holder of Registrable Securities covered by such registration statement
      such number of conformed copies of such registration statement and of each
      such
      amendment and supplement thereto (in each case including all exhibits), such
      number of copies of the prospectus contained in such registration statement
      (including each preliminary prospectus and any summary prospectus) and any
      other
      prospectus filed under Rule 424 under the 1933 Act, in conformity with the
      requirements of the 1933 Act, and such other documents, as such holder of
      Registrable Securities and underwriter, if any, may reasonably request in order
      to facilitate the public sale or other disposition of the Registrable Securities
      owned by such holder of Registrable Securities; 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv) use
      its
      commercially reasonable best efforts to register or qualify all Registrable
      Securities and other securities covered by such registration statement under
      such other U.S. federal or state securities laws or U.S. state blue sky laws
      as
      any U.S. holder of Registrable Securities thereof shall reasonably request,
      to
      keep such registrations or qualifications in effect for so long as such
      registration statement remains in effect, and take any other action which may
      be
      reasonably necessary to enable such holder of Registrable Securities to
      consummate the disposition in such jurisdictions of the securities owned by
      such
      holder of Registrable Securities, except that the Company shall not for any
      such
      purpose be required to qualify generally to do business as a foreign corporation
      in any jurisdiction wherein it would not but for the requirements of this
      subdivision (iv) be obligated to be so qualified or to consent to general
      service of process in any such jurisdiction;

    

    (v) use
      its
      commercially reasonable best efforts to cause all Registrable Securities covered
      by such registration statement to be registered with or approved by such other
      governmental agencies or authorities as may be necessary to enable the U.S.
      holder of Registrable Securities thereof to consummate the disposition of such
      Registrable Securities;

    

    (vi) furnish
      to each holder of Registrable Securities who requests, a signed counterpart,
      addressed to such holder of Registrable Securities, and the underwriters, if
      any, of an opinion of counsel for the Company, dated the effective date of
      such
      registration statement (or, if such registration includes an underwritten public
      offering, an opinion dated the date of the closing under the underwriting
      agreement), such opinion to be in the form filed as Exhibit 5 to the
      registration statement, and

    

    (vii) notify
      the Investors and their counsel promptly and confirm such advice in writing
      promptly after the Company has knowledge thereof:

    

    (a)
      when
      the Registration Statement, the prospectus or any prospectus supplement related
      thereto or post-effective amendment to the Registration Statement has been
      filed, and, with respect to the Registration Statement or any post-effective
      amendment thereto, when the same has become effective;

    

    (b)
      of
      any request by the SEC for amendments or supplements to the Registration
      Statement or the prospectus or for additional information;

    

    (c)
      of
      the issuance by the SEC of any stop order suspending the effectiveness of the
      Registration Statement or the initiation of any proceedings by any Person for
      that purpose; and

    

    (d)
      of
      the receipt by the Company of any notification with respect to the suspension
      of
      the qualification of any Registrable Securities for sale under the securities
      or
      blue sky laws of any jurisdiction or the initiation or threat of any proceeding
      for such purpose;

    

    (viii) notify
      each holder of Registrable Securities covered by such registration statement,
      at
      any time when a prospectus relating thereto is required to be delivered under
      the 1933 Act, upon discovery that, or upon the happening of any event as a
      result of which, the prospectus included in such registration statement, as
      then
      in effect, includes an untrue statement of a material fact or omits to state
      any
      material facts required to be stated therein or necessary to make the statements
      therein not misleading in the light of the circumstances then existing, and
      at
      the request of any such holder of Registrable Securities promptly prepare and
      furnish to such holder of Registrable Securities a reasonable number of copies
      of a supplement to or an amendment of such prospectus as may be necessary so
      that, as thereafter delivered to the purchasers of such securities, such
      prospectus shall not include an untrue statement of a material fact or omit
      to
      state a material fact required to be stated therein or necessary to make the
      statements therein not misleading in the light of the circumstances then
      existing;

    

    (ix) use
      its
      commercially reasonable best efforts to obtain the withdrawal of any order
      suspending the effectiveness of the Registration Statement at the earliest
      possible moment;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (x) otherwise
      use its commercially reasonable best efforts to comply with all applicable
      rules
      and regulations of the SEC, and make available to its security holders, as
      soon
      as reasonably practicable, an earnings statement covering the period of at
      least
      twelve months, but not more than eighteen months, beginning with the first
      full
      calendar month after the effective date of such registration statement, which
      earnings statement shall satisfy the provisions of Section 11(a) of the 1933
      Act
      and Rule 158 thereunder;

    

    (xi) enter
      into such agreements and take such other actions as the Investors shall
      reasonably request in writing (at the expense of the requesting or benefiting
      Investors) in order to expedite or facilitate the disposition of such
      Registrable Securities; and

    

    (xii) use
      its
      commercially reasonable best efforts to list all Registrable Securities covered
      by such registration statement on any securities exchange on which any of the
      Registrable Securities are then listed.

     

    The
      Company may require each holder of Registrable Securities as to which any
      registration is being effected to furnish the Company such information regarding
      such holder of Registrable Securities and the distribution of such securities
      as
      the Company may from time to time reasonably request in writing. In this
      connection, the Investors shall 

    

    (a)
      furnish the information as to any shares of Common Stock or other securities
      of
      the Company owned by the holder, the holder’s proposed plan of distribution, any
      relationship between the holder and the Company and any other information which
      the Company reasonably requests in connection with the preparation of the
      registration statement and update such information immediately upon the
      occurrence of any events or condition which make the information concerning
      the
      Seller inaccurate in any material respect;

    

    (b)
      not
      sell any Registrable Securities pursuant to the registration statement except
      in
      the manner set forth in the Registration Statement;

    

    (c)
      comply with the prospectus delivery requirements and the provisions of
      Regulation M of the SEC pursuant to the 1933 Act to the extent that such
      regulation is applicable to the holder; 

    

    (d)
      not
      sell
      or otherwise transfer or distribute any Registrable Securities if the holder
      possesses any material nonpublic information concerning the
      Company.

    

    4.2. The
      Company will not file any registration statement pursuant to Section 2.2 or
      Section 2.3, or amendment thereto or any prospectus or any supplement thereto
      to
      which the Investors shall reasonably object, provided that the Company may
      file
      such documents in a form required by law or upon the advice of its
      counsel.

    

    4.3. The
      Company represents and warrants to each holder of Registrable Securities that
      it
      has obtained all necessary waivers, consents and authorizations necessary to
      execute this Agreement and consummate the transactions contemplated hereby
      other
      than such waivers, consents and/or authorizations specifically contemplated
      by
      the Purchase Agreement. 

    

    4.4. Each
      holder of Registrable Securities agrees that, upon receipt of any notice from
      the Company of the occurrence of any event of the kind described in subdivision
      (viii) of Section 4.1, such Holder will forthwith discontinue such holder of
      Registrable Securities’ disposition of Registrable Securities pursuant to the
      Registration Statement relating to such Registrable Securities until such holder
      of Registrable Securities’ receipt of the copies of the supplemented or amended
      prospectus contemplated by subdivision (viii) of Section 4.1 and, if so directed
      by the Company, will deliver to the Company (at the Company’s expense) all
      copies, other than permanent file copies, then in such Holder’s possession of
      the prospectus relating to such Registrable Securities current at the time
      of
      receipt of such notice.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

    

    UNDERWRITTEN
      OFFERINGS 

    

    5.1. Incidental
      Underwritten Offerings.
      If the
      Company at any time proposes to register any of its securities under the 1933
      Act as contemplated by Section 3.1 and such securities are to be distributed
      by
      or through one or more underwriters, the Company will, if requested by any
      holder of Registrable Securities as provided in Section 3.1 and subject to
      the
      provisions of Section 3.2, use its commercially reasonable best efforts to
      arrange for such underwriters to include all the Registrable Securities to
      be
      offered and sold by such holder among the securities to be distributed by such
      underwriters. In no event shall any Investors be deemed an underwriter for
      purposes of this Agreement. This Article V shall not apply to any Registrable
      Securities theretofore registered pursuant to Article II of this
      Agreement.

    

    5.2. Participation
      In Underwritten Offerings.
      No
      holder of Registrable Securities may participate in any underwritten offering
      under Section 3.1 unless such holder of Registrable Securities (i) agrees to
      sell such Person’s securities on the basis provided in any underwriting
      arrangements approved, subject to the terms and conditions hereof, by the
      holders of a majority of Registrable Securities to be included in such
      underwritten offering and (ii) completes and executes all questionnaires,
      indemnities, underwriting agreements and other documents (other than powers
      of
      attorney) required under the terms of such underwriting arrangements.
      Notwithstanding the foregoing, no underwriting agreement (or other agreement
      in
      connection with such offering) shall require any holder of Registrable
      Securities to make a representation or warranty to or agreements with the
      Company or the underwriters other than representations and warranties contained
      in a writing furnished by such holder of Registrable Securities expressly for
      use in the related registration statement or representations, warranties or
      agreements regarding such holder of Registrable Securities, such holder’s
      Registrable Securities and such holder’s intended method of distribution and any
      other representation required by law.

    

    5.3. Preparation;
      Reasonable Investigation.
      In
      connection with the preparation and filing of each registration statement under
      the 1933 Act pursuant to this Agreement, the Company will give the holders
      of
      Registrable Securities registered under such registration statement, and their
      respective counsel and accountants, the opportunity to participate in the
      preparation of such registration statement, each prospectus included therein
      or
      filed with the SEC, and each amendment thereof or supplement thereto, and will
      give each of them such access to its books and records and such opportunities
      to
      discuss the business of the Company with its officers and the independent public
      accountants who have certified its financial statements as shall be necessary,
      in the reasonable opinion of such holders’ and such underwriters’ respective
      counsel, to conduct a reasonable investigation within the meaning of the 1933
      Act.

    

    ARTICLE
      VI

    

    INDEMNIFICATION

    

    6.1. Indemnification
      by the Company.
      In the
      event of any registration of any securities of the Company under the 1933 Act,
      the Company will, and hereby does agree to indemnify and hold harmless the
      holder of any Registrable Securities covered by such registration statement,
      its
      directors and officers, each other Person who participates as an underwriter
      in
      the offering or sale of such securities and each other Person, if any, who
      controls such holder or any such underwriter within the meaning of the 1933
      Act
      against any losses, claims, damages or liabilities, joint or several, to which
      such holder or any such director or officer or underwriter or controlling person
      may become subject under the 1933 Act or otherwise, insofar as such losses,
      claims, damages or liabilities (or actions or proceedings, whether commenced
      or
      threatened, in respect thereof) arise out of or are based upon any untrue
      statement or alleged untrue statement of any material fact contained in any
      registration statement under which such securities were registered under the
      1933 Act, any preliminary prospectus, final prospectus or summary prospectus
      contained therein, or any amendment or supplement thereto, or any omission
      or
      alleged omission to state therein a material fact required to be stated therein
      or necessary to make the statements therein not misleading, and the Company
      will
      reimburse such holder and each such director, officer, underwriter and
      controlling person for any legal or any other expenses reasonably incurred
      by
      them in connection with investigating or defending any such loss, claim,
      liability, action or proceeding, provided that the Company shall not be liable
      in any such case to the extent that any such loss, claim, damage, liability,
      (or
      action or proceeding in respect thereof) or expense arises out of or is based
      upon an untrue statement or alleged untrue statement or omission or alleged
      omission made in such registration statement, any such preliminary prospectus,
      final prospectus, summary prospectus, amendment or supplement in reliance upon
      and in conformity with written information furnished to the Company by such
      holder or underwriter stating that it is for use in the preparation thereof
      and,
      provided further that the Company shall not be liable to any Person who
      participates as an underwriter in the offering or sale of Registrable Securities
      or to any other Person, if any, who controls such underwriter within the meaning
      of the 1933 Act, in any such case to the extent that any such loss, claim,
      damage, liability (or action or proceeding in respect thereof) or expense arises
      out of such Person’s failure to send or give a copy of the final prospectus, as
      the same may be then supplemented or amended, within the time required by the
      1933 Act to the Person asserting the existence of an untrue statement or alleged
      untrue statement or omission or alleged omission at or prior to the written
      confirmation of the sale of Registrable Securities to such Person if such
      statement or omission was corrected in such final prospectus or an amendment
      or
      supplement thereto. Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of such holder or any
      such
      director, officer, underwriter or controlling person and shall survive the
      transfer of such securities by such holder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.2. Indemnification
      by the Investor.
      The
      Company may require as a condition to including any Registrable Securities
      in
      any registration statement filed pursuant to this Agreement, that the Company
      shall have received an undertaking satisfactory to it from the prospective
      holder of such Registrable Securities, and each Investor hereby agrees to
      indemnify and hold harmless and reimburse the Company (in the same manner and
      to
      the same extent as set forth in Section 6.1) the Company, each director of
      the
      Company, each officer of the Company and each other Person, if any, who controls
      the Company within the meaning of the 1933 Act, with respect to any statement
      or
      alleged statement in or omission or alleged omission from such registration
      statement, any preliminary prospectus, final prospectus or summary prospectus
      contained therein, or any amendment or supplement thereto, if such statement
      or
      alleged statement or omission or alleged omission was made in reliance upon
      and
      in conformity with written information furnished to the Company through an
      instrument duly executed by such holder of Registrable Securities specifically
      stating that it is for use in the preparation of such registration statement,
      preliminary prospectus, final prospectus, summary prospectus, amendment or
      supplement. Any such indemnity shall remain in full force and effect, regardless
      of any investigation made by or on behalf of the Company or any such director,
      officer or controlling person and shall survive the transfer of such securities
      by the Investor. The indemnification by the Investor
      shall be
      limited to the purchase price paid. 

    

    6.3. Notices
      Of Claims, Etc.
      Promptly after receipt by an indemnified party of notice of the commencement
      of
      any action or proceeding involving a claim referred to in Sections 6.1 and
      Section 6.2, such indemnified party will, if a claim in respect thereof is
      to be
      made against an indemnifying party, give written notice to the latter of the
      commencement of such action, provided that the failure of any indemnified party
      to give notice as provided herein shall not relieve the indemnifying party
      of
      its obligations under Sections 6.1 and Section 6.2, except to the extent that
      the indemnifying party is actually prejudiced by such failure to give notice.
      In
      case any such action is brought against an indemnified party, unless in such
      reasonable judgment of
      counsel to the indemnified party, a
      conflict of interest,
      as
      hereinafter defined,
      between
      such indemnified and indemnifying parties may exist in respect of such claim,
      the indemnifying party shall be entitled to participate in and to assume the
      defense thereof, jointly with any other indemnifying party similarly notified,
      to the extent that the indemnifying party may wish, with counsel reasonably
      satisfactory to such indemnified party, and after notice from the indemnifying
      party to such indemnified party of its election so to assume the defense
      thereof, the indemnifying party shall not be liable to such indemnified party
      for any legal or other expenses subsequently incurred by the latter in
      connection with the defense thereof other than reasonable costs of
      investigation. No indemnifying party shall, without the consent of the
      indemnified party, consent to entry of any judgment or enter into any settlement
      of any such action which does not include as an unconditional term thereof
      the
      giving by the claimant or plaintiff to such indemnified party of a release
      from
      all liability, or a covenant not to sue, in respect to such claim or litigation.
      No indemnified party shall consent to entry of any judgment or enter into any
      settlement of any such action the defense of which has been assumed by an
      indemnifying party without the consent of such indemnifying party.
      If the
      defendants in any action covered by this Section 6.3 include both the
      indemnified party and the indemnifying party and counsel for the indemnified
      party shall have reasonably concluded that there may be reasonable defenses
      available to it which are different from or additional to those available to
      the
      indemnifying party or if the interests of the indemnified party reasonably
      may
      be deemed to conflict with the interests of the indemnifying party
      (collectively, a “conflict of interest”), the indemnified parties, as a group,
      shall have the right to select one separate counsel and to assume such legal
      defenses and otherwise to participate in the defense of such action, with the
      reasonable expenses and fees of such separate counsel and other expenses related
      to such participation to be reimbursed by the indemnifying party. Such counsel
      shall be selected by the holders of a majority of the shares of Common Stock
      having an indemnity claim against the Company, whether pursuant to this
      Agreement or any other agreements which provide such or similar
      indemnity.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.4. Indemnification
      Payments.
      The
      indemnification required by Sections 6.1 and Section 6.2 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 expense, loss, damage or liability
      is incurred.

    

    6.5. Contribution.

    

    (i) If
      the
      indemnification provided for in Sections 6.1 and Section 6.2 is unavailable
      to
      an indemnified party in respect of any expense, loss, claim, damage or liability
      referred to therein, then each indemnifying party, in lieu of indemnifying
      such
      indemnified party, shall contribute to the amount paid or payable by such
      indemnified party as a result of such expense, loss, claim, damage or liability
      (i) in such proportion as is appropriate to reflect the relative benefits
      received by the Company on the one hand and the holder of Registrable Securities
      or underwriter, as the case may be, on the other from the distribution of the
      Registrable Securities or (ii) if the allocation provided by clause (i) above
      is
      not permitted by applicable law, in such proportion as is appropriate to reflect
      not only the relative benefits referred to in clause (i) above but also the
      relative fault of the Company on the one hand and of the holder of Registrable
      Securities or underwriter, as the case may be, on the other in connection with
      the statements or omissions which resulted in such expense, loss, damage or
      liability, as well as any other relevant equitable considerations. The relative
      benefits received by the Company on the one hand and the holder of Registrable
      Securities or underwriter, as the case may be, on the other in connection with
      the distribution of the Registrable Securities shall be deemed to be in the
      same
      proportion as the total net proceeds received by the Company from the initial
      sale of the Registrable Securities by the Company to the purchasers bear to
      the
      gain, if any, realized by all selling holders participating in such offering
      or
      the underwriting discounts and commissions received by the underwriter, as
      the
      case may be. The relative fault of the Company on the one hand and of the holder
      of Registrable Securities or underwriter, as the case may be, on the other
      shall
      be determined by reference to, among other things, whether the untrue or alleged
      untrue statement of a material fact or omission to state a material fact relates
      to information supplied by the Company, by the holder of Registrable Securities
      or by the underwriter and the parties’ relative intent, knowledge, access to
      information supplied by the Company, by the holder of Registrable Securities
      or
      by the underwriter and the parties’ relative intent, knowledge, access to
      information and opportunity to correct or prevent such statement or omission,
      provided that the foregoing contribution agreement shall not inure to the
      benefit of any indemnified party if indemnification would be unavailable to
      such
      indemnified party by reason of the provisions contained herein, and in no event
      shall the obligation of any indemnifying party to contribute under this Section
      6.6 exceed the amount that such indemnifying party would have been obligated
      to
      pay by way of indemnification if the indemnification provided for hereunder
      had
      been available under the circumstances.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii) The
      Company and the holders of Registrable Securities agree that it would not be
      just and equitable if contribution pursuant to this Section 6.6 were determined
      by pro rata allocation (even if the holders of Registrable Securities and any
      underwriters were treated as one entity for such purpose) or by any other method
      of allocation that does not take account of the equitable considerations
      referred to in the immediately preceding paragraph. The amount paid or payable
      by an indemnified party as a result of the losses, claims, damages and
      liabilities referred to in the immediately preceding paragraph shall be deemed
      to include, subject to the limitations set forth herein, any legal or other
      expenses reasonably incurred by such indemnified party in connection with
      investigating or defending any such action or claim.

    

    (iii) Notwithstanding
      the provisions of this Section 6.6, no holder of Registrable Securities or
      underwriter shall be required to contribute any amount in excess of the amount
      by which (i) in the case of any such holder, the net proceeds received by such
      holder from the sale of Registrable Securities in the applicable Registration
      Statement or (ii) in the case of an underwriter, the total price at which the
      Registrable Securities purchased by it and distributed to the public were
      offered to the public exceeds, in any such case, the amount of any damages
      that
      such holder or underwriter has otherwise been required to pay by reason of
      such
      untrue or alleged untrue statement or omission. No Person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
      be
      entitled to contribution from any person who was not guilty of such fraudulent
      misrepresentation.

    

    ARTICLE
      VII

    

    RULE
      144

    

    7.1. Rule
      144.
      The
      Company shall use its commercially reasonable efforts to file in a timely manner
      the reports required to be filed by the Company under the 1933 Act and the
      1934
      Act (including but not limited to the reports under Sections 13 and 15(d) of
      the
      1934 Act referred to in subparagraph (c) of Rule 144) and the rules and
      regulations adopted by the SEC thereunder (or, if the Company is not required
      to
      file such reports, will, upon the request of any holder of Registrable
      Securities, make publicly available other information) and will take such
      further action as any holder of Registrable Securities may reasonably request,
      all to the extent required from time to time to enable such holder to sell
      Registrable Securities without registration under the 1933 Act within the
      limitation of the exemptions provided by (a) Rule 144, or (b) any similar rule
      or regulation hereafter adopted by the SEC. Upon the request of any holder
      of
      Registrable Securities, the Company will deliver to such holder a written
      statement as to whether it has complied with the requirements of this Section
      7.1.

    

    ARTICLE
      VIII

    

    MISCELLANEOUS
      

    

    8.1. Amendments
      And Waivers.
      This
      Agreement may be amended and the Company may take any action herein prohibited,
      or omit to perform any act herein required to be performed by it, only if the
      Company shall have obtained the written consent to such amendment, action or
      omission to act, of the holder or holders of fifty-one percent (51%) or more
      of
      the sum of the Registrable Securities.
      Each
      holder of any Registrable Securities at the time or thereafter outstanding
      shall
      be bound by any consent authorized by this Section 8.1, whether or not such
      Registrable Securities shall have been marked to indicate such
      consent.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.2. Nominees
      For Beneficial Owners.
      In the
      event that any Registrable Securities are held by a nominee for the beneficial
      owner thereof, the beneficial owner thereof shall be treated as the holder
      of
      such Registrable Securities for purposes of any request or other action by
      any
      holder or holders of Registrable Securities pursuant to this Agreement or any
      determination of any number of percentage of shares of Registrable Securities
      held by a holder or holders of Registrable Securities contemplated by this
      Agreement. The Company may require assurances reasonably satisfactory to it
      of
      such owner’s beneficial ownership or such Registrable Securities.

    

    8.3. Notices.
      Except
      as
      otherwise provided in this Agreement, all notices, requests and other
      communications to any Person provided for hereunder shall be in writing and
      shall be given to such Person (a) in the case of a party hereto other than
      the
      Company, addressed to such party in the manner set forth in the Purchase
      Agreement or at such other address as such party shall have furnished to the
      Company in writing, or (b) in the case of any other holder of Registrable
      Securities, at the address that such holder shall have furnished to the Company
      in writing, or, until any such other holder so furnishes to the Company an
      address, then to and at the address of the last holder of such Registrable
      Securities who has furnished an address to the Company, or (c) in the case
      of
      the Company, at the address set forth on the signature page hereto, to the
      attention of its President, or at such other address, or to the attention of
      such other officer, as the Company shall have furnished to each holder of
      Registrable Securities at the time outstanding. Each such notice, request or
      other communication shall be effective (i) upon receipt after such communication
      is deposited in the mail with first class postage prepaid, addressed as
      aforesaid or (ii) if given by any other means (including, without limitation,
      by
      fax or air courier), when delivered at the address specified above, provided
      that any such notice, request or communication shall not be effective until
      received, and provided, further, that notice by fax shall not be deemed received
      unless receipt is acknowledged.

    

    8.4. Assignment.
      This
      Agreement shall be binding upon and inure to the benefit of and be enforceable
      by the parties hereto. In addition, and whether or not any express assignment
      shall have been made, the provisions of this Agreement which are for the benefit
      of the parties hereto other than the Company shall also be for the benefit
      of
      and enforceable by any subsequent holder of any Registrable Securities. Each
      of
      the Holders of the Registrable Securities agrees, by accepting any portion
      of
      the Registrable Securities after the date hereof, to the provisions of this
      Agreement including, without limitation, appointment of a representative (the
      “Investor’s Representative”) to act on behalf of such Holder pursuant to the
      terms hereof which such actions shall be made in the good faith discretion
      of
      the Investor’s Representative and be binding on all persons for all
      purposes.

    

    8.5. Descriptive
      Headings.
      The
      descriptive headings of the several sections and paragraphs of this Agreement
      are inserted for reference only and shall not limit or otherwise affect the
      meaning hereof.

    

    8.6. Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of New York, without giving effect to applicable principles of
      conflicts of law.

    

    8.7. Jurisdiction.
      If any
      action is brought among the parties with respect to this Agreement or otherwise,
      by way of a claim or counterclaim, the parties agree that in any such action,
      and on all issues, the parties irrevocably waive their right to a trial by
      jury.
      Exclusive jurisdiction and venue for any such action shall be the State or
      Federal Courts serving the City, County and State of New York. In the event
      suit
      or action is brought by any party under this Agreement to enforce any of its
      terms, or in any appeal therefrom, it is agreed that the prevailing party shall
      be entitled to reasonable attorneys fees to be fixed by the arbitrator, trial
      court, and/or appellate court if such party prevails on substantially all
      disputed matters.

    

    8.8. Entire
      Agreement.
      This
      Agreement, together with the Purchase Agreement and the agreements incidental
      thereto, embodies the entire agreement and understanding between the Company
      and
      each other party hereto relating to the subject matter hereof and supersedes
      all
      prior agreements and understandings relating to such subject
      matter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.9. Severability.
      If any
      provision of this Agreement, or the application of any such provision to any
      Person or circumstance, shall be held invalid, the remainder of this Agreement,
      or the application of such provision to Persons or circumstances other than
      those to which it is held invalid, shall not be affected thereby.

    

    8.10. Binding
      Effect.
      All the
      terms and provisions of this Agreement whether so expressed or not, shall be
      binding upon, inure to the benefit of, and be enforceable by the parties and
      their respective administrators, executors, legal representatives, heirs,
      successors and assignees. 

    

    8.11. Preparation
      of Agreement.
      This
      Agreement shall not be construed more strongly against any party regardless
      of
      who is responsible for its preparation. The parties acknowledge each contributed
      and is equally responsible for its preparation. 

    

    8.12. Failure
      or Indulgence Not Waiver; Remedies Cumulative.
      No
      failure or delay on the part of any party hereto in the exercise of any right
      hereunder shall impair such right or be construed to be a waiver of, or
      acquiescence in, any breach of any representation, warranty, covenant or
      agreement herein, nor shall nay single or partial exercise of any such right
      preclude other or further exercise thereof or of any other right. All rights
      and
      remedies existing under this Agreement are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    

    8.13. Counterparts.
      This
      Agreement may be executed in one or more counterparts, and by the different
      parties hereto in separate counterparts, each of which when executed shall
      be
      deemed to be an original, but all of which taken together shall constitute
      one
      and the same agreement. A facsimile transmission of this signed Agreement shall
      be legal and binding on all parties hereto. 

    

    [SIGNATURES
      ON FOLLOWING PAGE]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Investor and the Company have as of the date first written above executed this
      Agreement.

    

    DELI
      SOLAR (USA), INC.

     

    
      	By:	/s/
              Deli Du 	 	 
	 	Deli Du,
              President and 	 	 
	 	Chief Executive Officer	 	 
	 	 	 	 
	INVESTOR	 	 
	 	 	 	 
	BARRON PARTNERS
              LP	 
	
              By:
                Barron Capital Advisors, LLC, its General Partners

            	 
	 	 	 	 
	By:
              	/s/Andrew
              Barron Worden	 	 
	Andrew Barron Worden	 
	President	 
	730 Fifth Avenue, 25th
              Floor	 
	New York NY 10019	 
	 	 	 	 
	EOS
              HOLDINGS	 	 
	 	 	 	 
	By:	/s/Jon
              R. Carnes	 	 
	Jon R. Carnes, President	 
	2560 Highvale Dr.	 
	Las Vegas, NV 89134	 
	
            	
            	 	 
	/s/
              Matthew Hayden	 	 
	Matthew
              Hayden

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