Exhibit 10.1

AMENDMENT TO NOTE, WARRANT AND SECURITY AGREEMENT

This AMENDMENT TO SECURED CONVERTIBLE PROMISSORY NOTE, WARRANT and SECURITY
AGREEMENT (this “Amendment”) is made as of September 22, 2010, by and between
DayStar Technologies, Inc. (the “Company”), and Dynamic Worldwide Solar Energy,
LLC (the “Holder”).

WHEREAS, the Company issued to the Holder a First Secured Convertible Promissory
Note dated April 29, 2010 (as amended to date, the “Note”);

WHEREAS, the Company issued to the Holder a Warrant for the Purchase of Shares
of Common Stock dated April 29, 2010 (the “Warrant”);

WHEREAS, the Company and the Holder are parties to a Security Agreement dated as
of April 29, 2010 (the ‘Security Agreement”);

WHEREAS, the Company and the Holder have agreed to amend the Note to, among
other things, provide that the Maturity Date (as defined in the Note) shall be
January 22, 2011;

WHEREAS, the Company and the Holder have agreed to amend the Warrant to, among
other things, provide that the Purchase Price (as defined in the Warrant) shall
be $1.25 per share; and

WHEREAS, the Company and Holder have agreed to amend the Security Agreement to
exclude certain items from the Collateral (as defined in the Security Agreement)
so that the Company may sell such items;

NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:

1. The Maturity Date of the Note, as defined in Section 3(a) of the Note, is
hereby amended to be January 22, 2011.

2. The following is added immediately prior to the first sentence of
Section 2(a) of the Note: “At any time after the date which is 255 days after
April 29, 2010,”.

3. Section 3(e) of the Note is hereby deleted and replaced in its entirety by
the following:

“Prepayment. Payor may prepay all or any part of this Note only after the date
which is 260 days after the issuance hereof and then only by giving Holder at
least five (5) days advance written notice of Payor’s intent to prepay the Note,
specifying the date on which such prepayment will be made, whereupon such Holder
shall have the right to convert, pursuant to Section 2(a) above, all or any part
of this Note on or before the date scheduled for such prepayment.”

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4. The Company confirms that, as of the date hereof, the Conversion Price (as
defined in the Note) is $0.90 per share and the number of shares of Common Stock
(as defined in the Note) issuable upon conversion of the Note is 722,222; such
Conversion Price and number of shares issuable upon conversion reflect
adjustments in accordance with the Note and the 9:1 reverse stock split in May
2010.

5. From and after the date hereof, Section 2(f) of the Note is hereby deleted
and replaced in its entirety by the following:

“Limitation on Cash Payment. If Holder elects to convert this Note prior to the
Maturity Date at a price less than $0.90 per share, and on the Maturity Date
Payor’s VWAP is less than $0.90 and Holder by this conversion has not been
compensated for the original principal amount of the Note plus interest accrued
thereon, Payor will make a cash payment to Holder of any unpaid principal amount
of the Note plus any accrued and unpaid interest based upon the following
calculation: ($0.90 – VWAP) x 722,222.”

6. From and after the date hereof, Section 3(b) of the Note is hereby deleted
and replaced in its entirety by the following:

“Payment on Event of Merger or Acquisition. Regardless of whether Payor causes
the events to occur in Section 2.d.1 above, if any consolidation with or merger
of Payor with or into another corporation (other than a merger or consolidation
in which Payor is the surviving or continuing corporation) or any sale, lease or
conveyance to another corporation of the property of Payor as an entirety or
substantially as an entirety, in either case while any principal or accrued
interest remains outstanding under this Note, for a sales price equivalent to
less than $0.75 per share of Capital Stock (“Sale Price”), then at Holder’s
election, the Payor within a reasonable time after the completion of
consolidation or merger (not to exceed 30 days) shall pay to Holder an
additional sum of ($0.75 – Sales Price)* 722,222 (which represents the maximum
shares of Capital Stock issuable upon conversion of the Note) (subject to
adjustment in the event of any stock splits, stock dividends or other
recapitalization of such class or series of Capital Stock subsequent to the date
of such sale or issuance) up to a maximum of $325,000 in addition to any cash
amounts payable for principal or accrued interest after conversion of the Note.
This payment is to make Holder whole for its lost expectation of profit if Payor
had continued as an independent entity. Payment under this Section 3.b is not
considered to be the contracting for, charge or receipt of interest as
contemplated in Section 12 below.”

7. The first paragraph of the Warrant is deleted in its entirety and replaced
with the following:

“THIS CERTIFIES THAT, FOR VALUE RECEIVED, Dynamic Worldwide Solar Energy, LLC,
or its registered assign(s) (the “Holder”), is entitled to purchase from Daystar
Technologies, Inc., a Delaware corporation (the “Company”), subject to the terms
and conditions set forth in this Warrant, up to 240,741 fully paid and
nonassessable shares of common stock (“Common Stock”), of the Company, at any
time commencing

 

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on the date that is 255 days after April 29, 2010 (the “Commencement Date”) and
expiring at 5:00 p.m. PST, on April 28, 2017 (the “Expiration Date”). The price
for each share of Common Stock purchased hereunder (as adjusted as set forth
herein, collectively the “Warrant Shares”) is $1.25 per share until expiration
of this Warrant (as adjusted as set forth herein, the “Purchase Price”).”

8. The parties hereby exclude from the “Collateral” on Exhibit A to the Security
Agreement, and agree that the Company may sell, items of furniture, fixtures or
equipment to be selected by the Company to be sold in bona fide sales to third
parties unaffiliated with the Company or any of its “affiliates”, provided that
the only items that may be so excluded and selected by the Company shall be
items of furniture, fixtures or equipment that are not expected to be needed for
future operations, and provided further that such items shall have an aggregate
fair market value not exceeding $100,000. The Company agrees to use all of the
net proceeds of such sales for working capital purposes.

9. Except to the extent amended hereby, the Note, the Warrant and the Security
Agreement shall continue in full force and effect and shall not be otherwise
affected by this Amendment. The parties agree that to the extent the
modifications to the Note and the Warrant made pursuant to this Agreement may
result in the issuance by the Company of shares of its Common Stock in violation
of stockholder approval requirements of Nasdaq Stock Market Rule 5635, the
Company shall not issue such shares without first complying with such rule.

10. This Amendment has been authorized by all necessary action of the Company
and the Holder and shall be governed by and construed in accordance with the
laws of the State of Delaware, as such laws are applied to contracts to be
entered into and performed entirely in the State of Delaware by Delaware
residents. This Amendment may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement. This Amendment may be
executed by facsimile or electronic signature.

IN WITNESS WHEREOF, the parties have executed this Amendment on the date first
above written.

 

DayStar Technologies, Inc.       Dynamic Worldwide Solar Energy, LLC By:   

/s/ Patrick J. Forkin III

      By:   

/s/ Brad Zackson

Name:    Patrick J. Forkin III       Name:    Brad Zackson Title:    Sr. VP
Corporate Development       Title:    Authorized Signatory

 

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