Document:

DC8236.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

	
Exhibit 10.1

	
PURCHASE AGREEMENT

     THIS PURCHASE AGREEMENT (the “Agreement”) is made as of the 28th day of January, 2010 (the “Effective Date”) between DayStar Technologies, Inc., a Delaware corporation (the
“Company”), and Peter Alan Lacey (the “Purchaser”). The Company and the Purchaser are sometimes
referred to individually as a “Party” and collectively as the “Parties.” 

	
RECITALS

     The Company desires to issue and the Purchaser desires to purchase a secured promissory note (the “Note”) in substantially
the form attached hereto as Exhibit A. 

	
AGREEMENT

     Now, therefore, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

	
1. PURCHASE AND SALE OF NOTE.

     1.1 Sale and Issuance of Note. Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Closing (as defined below), and the
Company agrees to sell and issue to the Purchaser at the Closing: the Note in substantially the form attached hereto as Exhibit A in the principal amount of US$250,000.

	
1.2      		
Closing; Delivery.	
	 
	 	
(a) Closing Date. The closing of the purchase and sale of the Note (the “Closing”)	
	 

shall be held on January 28, 2010 or as soon thereafter as practicable (the “Closing Date”) at a place and time to be determined by the Company and
Purchaser. 

     (b) Deliveries at Closing. At the Closing (i) the Purchaser will deliver to the Company payment of the Purchase Price with respect to the Note by wire transfer from
the Purchaser to a bank designated by the Company and the executed counterpart signature pages to the Security Agreement (as defined below); and (ii) the Company shall issue and deliver to the Purchaser the executed Note in favor of the Purchaser
and the executed counterpart signature pages to the Security Agreement (as defined below).

     (c) Purchase Price. The “Purchase Price” of the Note shall equal the principal amount of the Note. 

     1.3 Use of Proceeds. The Company shall use the proceeds related to the sale of the Note for (i) operating capital and (ii) funding of the Company’s ongoing
research and development and related business operations.

2. SECURITY INTEREST. The indebtedness represented by the Note shall be secured by certain assets of the Company as set forth in that certain Amended and Restated Security

	
Exhibit 10.1

Agreement, dated as of January 28, 2010 by and between the Company and the Purchaser attached hereto as Exhibit B (the “Security
Agreement”). 

3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company hereby represents and warrants to the Purchaser as follows: 3.1 Corporate
Power. The Company has all requisite corporate power to execute and deliver this Agreement and to carry out and perform its obligations under the terms of this Agreement. 

     3.2 Authorization. All corporate action on the part of the Company, its directors and its shareholders necessary for the authorization, execution, delivery and
performance of this Agreement by the Company and the performance of the Company’s obligations hereunder, including the issuance and delivery of the Note, has been taken prior to the Closing. This Agreement and the Note when executed and
delivered by the Company shall constitute valid and binding obligations of the Company enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to
rights to indemnity, subject to federal and state securities laws. 

     3.3 Issuance of the Securities. The Note is duly authorized and, when issued and paid for in accordance with this Agreement, the Note will be duly and validly issued.

     43.4 Governmental Consents. All consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with, any
governmental authority, required on the part of the Company in connection with the valid execution and delivery of this Agreement, the offer, sale or issuance of the Note or the consummation of any other transaction contemplated thereby or hereby
shall have been obtained and will be effective at the Closing or, except for notices required or permitted to be filed with certain state and federal securities commissions, which notices will be filed on a timely basis. 

     3.5 No Conflicts. The execution, delivery and performance of this Agreement by the Company and the performance of the Company’s obligations hereunder, including
the issuance and delivery of the Note, will not (a) breach any law to which the Company or any of its subsidiaries or any of their assets is subject or any provision of its organizational documents, (b) breach any contract, order or permit to which
the Company or any of its subsidiaries is a party or by which it is bound or to which any of its assets is subject, or (c) trigger any rights of first refusal, preferential purchase, or similar rights. 

     3.6 Offering. Assuming the accuracy of the representations and warranties of the Purchaser contained in Section 4 hereof, the offer, issue, and sale of the Note is and
will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “1933 Act”), and have been registered or qualified
(or are exempt from registration and qualification) under the registration, permit, or qualification requirements of all applicable state securities laws. 

4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.

The Purchaser represents, warrants and covenants to the Company as follows: 

	
Exhibit 10.1

     4.1 Purchase for Own Account. The Purchaser represents that it is acquiring the Note solely for its own account and beneficial interest for investment and not with a
view to or for sale in connection with any distribution of the Note, has no present intention of selling, granting any participation in the same, and does not presently have reason to anticipate a change in such intention. 

     4.2 Information and Sophistication. The Purchaser acknowledges that it has received all the information it has requested from the Company and it considers necessary or
appropriate for deciding whether to acquire the Note. The Purchaser represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Note and to obtain any
additional information necessary to verify the accuracy of the information given the Purchaser. The Purchaser further represents that it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits
and risk of this investment. 

     4.3 Ability to Bear Economic Risk and Knowledge of Certain Risk Factors. The Purchaser acknowledges that investment in the Note involves a high degree of risk, and
represents that it is able, without materially impairing its financial condition, to hold the Note for an indefinite period of time and to suffer a complete loss of its investment. The Purchaser has evaluated the risks involved in investing in the
Note, and has determined that the Note is a suitable investment for the Purchaser. 

     4.4 Further Limitations on Disposition. Without in any way limiting the representations set forth above, the Purchaser further agrees not to make any disposition of
all or any portion of the Note unless and until there is then in effect a registration statement under the 1933 Act covering such proposed disposition and such disposition is made in accordance with such registration statement or such disposition
does not require registration under the 1933 Act or any applicable state securities laws. In the event that Purchaser seeks to make a disposition of all or any portion of the Note in the absence of registration under the 1933 Act and any applicable
state securities laws, Purchaser shall furnish an opinion of counsel reasonably satisfactory in form and in substance to the Company that such disposition is exempt from registration under the 1933 Act and any applicable state securities laws.

	
5.      		
MISCELLANEOUS.	
	 
	 	
5.1 Binding Agreement. The terms and conditions of this Agreement shall inure to the	
	 

benefit of and be binding upon the respective successors and assigns of the Parties. Nothing in this Agreement, express or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement. 

     5.2 Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed under the laws of the State of California without giving effect to the
conflict of laws provisions thereof that would require the application of the law of another jurisdiction. THE PARTIES EACH HEREBY, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS

	
Exhibit 10.1

RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS. 

     5.3 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one
and the same instrument. 

     5.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this
Agreement. 

     5.5 Notices. Any notice required or permitted under this Agreement or the Note shall be given in writing and shall be deemed effectively given upon personal delivery,
upon confirmation of facsimile delivery, one day after deposit with a national overnight courier service, or three days after deposit with the United States Post Office, postage prepaid, addressed to the Company at 2972 Stender Way, Santa Clara,
California 95054, or to the Purchaser at its address shown on the signature page hereto, or at such other address as such Party may designate in writing to the other Party. 

     5.6 Modification; Waiver. No modification or waiver of any provision of this Agreement or consent to departure therefrom shall be effective unless in writing and
approved by the Company and the Purchaser. 

     5.7 Expenses. Company and Purchaser shall bear the entire cost of its own expenses and legal fees incurred on its behalf with respect to this Agreement, the Security
Agreement and the Note and the transactions contemplated hereby and thereby. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the Note, the Security Agreement or any other agreement entered into in
conjunction herewith or therewith, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 

     5.8 Entire Agreement. This Agreement, the Security Agreement, the Note, and the Exhibits hereto and thereto constitute the full and entire understanding and agreement
between the Parties with regard to the subjects hereof and no Party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 

     5.9 Interpretation; Rules of Construction.  The words “include”, “includes” and “including” when used in this Agreement shall be deemed
in each case to be followed by the words “without limitation”.  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The parties hereto
agree that they have been represented by legal counsel during the negotiation and execution of this Agreement and the Note and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an
agreement or other document shall be construed against the party drafting such agreement or document.

	
[Signature Page Follows]

	
Exhibit 10.1

     IN WITNESS WHEREOF, the Parties have executed this PURCHASE AGREEMENT as of the date first written above.

	
COMPANY: 
		
 		
DayStar Technologies, Inc., 
	
	
 
		
 		
a Delaware corporation 
	
	
 
	
	
 
		
 		
By: 
		
 		
 
	
	
		
		
		
		

	
	
 
		
 		
Name: 
		
 		
Patrick J. Forkin III 
	
	
 
		
 		
Title: 
		
 		
Sr. VP Corporate Development & Strategy 
	
	
 
	
	
PURCHASER: 
		
 		
 
		
 		
 
	

	
Name: Peter Alan Lacey

Address:

[SIGNATURE PAGE TO PURCHASE AGREEMENT]DC8237.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

	
Exhibit 10.2

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR AN EXEMPTION THEREFROM.

	
SECURED PROMISSORY NOTE

	
US$250,000

	
JANUARY 28, 2010

     For value received DayStar Technologies, Inc., a Delaware corporation (“Payor”), promises to pay to Peter Alan Lacey (“Lacey”), or his assigns, the principal sum of US$250,000 on the terms set forth below. Interest on the outstanding principal amount shall accrue at the rate of 20% per annum.  Interest shall
commence on the date hereof and shall continue on the outstanding principal until paid in full. Interest shall be computed on the basis of a year of 365 days for the actual number of days elapsed.

     This secured promissory note (this “Note”) is issued pursuant to the terms of that certain Purchase Agreement (the
“Agreement”) dated as of January 28, 2010 between Payor and Holder. This Note shall be secured pursuant to the terms of that certain Amended and Restated Security Agreement
by and between Payor and Holder dated January 28, 2010 and incorporated herein by reference (as amended and/or restated from time to time, the “Security Agreement”).

	
1.      		
Definitions. The following terms shall have the meanings herein specified:	
	 
	 	
“Event of Default” means an event specified in Section 3 hereof.	
	 
	 	
“Holder” means Lacey, and each endorsee, pledgee, assignee, owner and holder of this Note, as such; and any consent, waiver or agreement in writing by the then Holder with respect
to any matter or thing in connection with this Note, whether altering any provision hereof or otherwise, shall bind all subsequent Holders. Notwithstanding the foregoing, Payor may treat the registered holder of this Note as Holder for all
purposes.	
	 
	 	
“Lacey RRSP Account” means that certain TD Waterhouse Account 240832S, in trust for Peter Alan Lacey as beneficiary.	
	 
	 	
“Prior Notes” collectively means (i) that certain Secured Convertible Promissory Note, dated as of September 21, 2009 in the principal amount of $2,000,000 issued by the Payor
in favor of the Lacey RRSP Account, (ii) that certain Secured Promissory Note, dated as of December 2, 2009 in the principal amount of $150,000 issued by the Payor in favor of Lacey, (iii) that certain Secured Promissory Note, dated as of
December 17, 2009 in the principal amount of $150,000 issued by the Payor in favor of Lacey, (iv) that certain Secured Promissory Note, dated as of December 31, 2009 in the principal amount of $125,000 issued by the Payor in favor of Lacey,
and (v) that certain Secured Convertible Promissory Note, dated as of January 6, 2010 in the principal amount of $250,000 issued by the Payor in favor of Mike Moretti.	
	 

- 1 -

	
Exhibit 10.2

     “Prior Purchase Agreements” collectively means (i) that certain Note Purchase Agreement, dated as of September 18, 2009, by and between the Payor and
the Lacey RRSP Account, (ii) that certain Purchase Agreement, dated as of December 2, 2009, by and between the Payor and Lacey, (iii) that certain Purchase Agreement, dated as of December 16, 2009, by and between the Payor and Lacey (iv) that
certain Purchase Agreement, dated as of December 31, 2009, by and between the Payor and Lacey (v) that certain Purchase Agreement, dated as of January 6, 2010, by and between the Payor and Mike Moretti.

     “Prior Security Agreements” means (i) that certain Security Agreement, effective as of September 21, 2009, by and between the Payor and the Lacey RRSP
Account (ii) that certain Security Agreement, effective as of January 6, 2010, by and between the Payor and Mike Moretti. 

Words of one gender include the other gender; the singular includes the plural; and the plural includes the singular, unless the context otherwise requires.

	
2.      		
Payment of the Note – Principal and Interest a. Term. All principal and all unpaid accrued interest above shall be due
and	
	 

payable on or before the 180th day after the date of this Note (the “Maturity Date”).  The
Maturity Date may be extended by Holder, at the option of Holder and in its sole discretion, effective upon notice of such extension by Holder to Payor not less than 15 calendar days prior to the original Maturity Date.  At any time after the
Maturity Date (as it may be extended pursuant to this Section 2(a)), Holder may proceed to collect such outstanding principal and accrued interest. All payments of interest and principal shall be in lawful money of the United States of America and
shall be made to Holder. All payments shall be applied first to accrued interest, and thereafter to principal.

     b. Payment on Event of Default. If any Event of Default occurs hereunder, then, at the option and upon the declaration of Holder of this Note
and upon written notice to Payor (which election and notice shall not be required in the case of an Event of Default under Section 3(c) or 3(d)) and Payor’s subsequent failure to cure any such Event of Default under Section 3(d) within thirty
(30) days following receipt of such written notice, this Note shall accelerate and all unpaid principal and accrued interest shall become due and payable, and, at any time thereafter, Holder may proceed to collect such outstanding principal and
accrued interest.

     c. Default Interest.  In the event Payor fails to pay the entire unpaid principal balance when due, Payor shall pay a default penalty (the
“Default Penalty”) in an amount equal to 6% of the then outstanding principal and accrued and outstanding interest under this Note and the entire unpaid principal balance,
accrued and outstanding interest, and the Default Penalty (if not paid) shall thereafter bear interest at a default interest rate equal to the lower of 20% per annum or the highest rate permitted by law.

	
d.      		
Prepayment. Payor may prepay this Note at any time without penalty.	
	 
	
e.      		
Attorney’s Fees. If an Event of Default shall occur hereunder, Payor shall pay	
	 

all reasonable attorneys’ fees and court costs incurred by Holder in enforcing and collecting this Note.

- 2 -

	
Exhibit 10.2

3. Events of Default.  The occurrence of any one or more of the following, if uncured within 10 days from written notice thereof with respect to subsections (a) and
(b) only, shall constitute an “Event of Default”:

     a. Payor fails to pay timely any of the principal amount due under this Note on the date the same becomes due and payable or any accrued interest or other amounts due under this Note on the date the
same becomes due and payable;

     b. Payor breaches any of its representations, warranties, covenants or agreements set forth in the Agreement, the Prior Purchase Agreements, the Security Agreement, the Prior Security Agreements, the
Prior Notes or this Note;

     c. Payor files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in
effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing; or

     d. An involuntary petition is filed against Payor under any bankruptcy statute now or hereafter in effect, unless such petition is dismissed or discharged within sixty (60) days thereafter, or a
custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of Payor.

4. Transfer. In order to transfer this Note, Holder, or its duly authorized representative, shall surrender this Note at the office of Payor pursuant to Section 8
hereof, accompanied by an assignment duly executed by Holder hereof, but in no event shall this Note be transferred to a third party unrelated to Holder, unless (i) an Event of Default under Section 3(a) of this Note has been declared by Holder and
(ii) Payor shall have received thirty (30) days prior written notice of such proposed transfer. In the event that Holder seeks to make a transfer of this Note in the absence of registration under the Securities Act of 1933 (as amended, the
“1933 Act”) and any applicable state securities laws, Holder shall furnish an opinion of counsel satisfactory in form and in substance to the Payor that such transfer is
exempt from registration under the 1933 Act and any applicable state securities laws.

5. Loss or Mutilation of Note. Upon receipt by Payor of evidence satisfactory to Payor of the loss, theft, destruction or mutilation of this Note, together with an
indemnity reasonably satisfactory to Payor, in the case of loss, theft, or destruction, or the surrender and cancellation of this Note, in the case of mutilation, Payor shall execute and deliver to Holder a new Note of like tenor and denomination as
this Note.

6. Waiver or Amendment. Any term of this Note may be amended or waived with the written consent of Payor and Holder. The failure of Holder to enforce at any time
any of the provisions of this Note shall not, absent an express written waiver signed by Holder specifying the provision being waived, be construed to be a waiver of any such provision, nor in any way to affect the validity of this Note or any part
hereof or the right of Holder thereafter to enforce each and every such provision. No waiver of any breach of this Note shall be held to be a waiver of any other or subsequent breach.

- 3 -

	
Exhibit 10.2

7. Compliance with Usury Laws. It is the intention of the parties to conform strictly to the applicable usury laws, whether
pursuant to state, federal or other applicable law, that are applicable to this Note. All agreements between Payor and Holder, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no event,
shall the amount paid or agreed to be paid to Holder under this Note, exceed the maximum amount permissible under applicable usury laws. If, under any circumstances, fulfillment of any provision hereof at the time performance of such provision shall
be due, shall involve exceeding the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity; and if under any circumstances Holder shall ever receive an amount deemed interest by
applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the principal amount owing hereunder and not to the payment of interest, or if
such excessive interest exceeds the unpaid balance of principal and such other indebtedness, the excess shall be deemed to have been a payment made by mistake and shall be refunded to the Payor. The terms and provisions of this Section shall control
and supersede every other provision of this Note, as applicable.

8. Notices.  All notices or other communications to a party required or permitted hereunder shall be in writing and shall be delivered personally or by facsimile
(receipt confirmed electronically) to such party (or, in the case of an entity, to an executive officer of such party) or shall be sent by a reputable express delivery service or by certified mail, postage prepaid with return receipt requested,
addressed as follows:

	 	
if to Holder to:

	 	
Peter Alan Lacey

	 	
if to Payor to:

	
DayStar Technologies, Inc.

2972 Stender Way

Santa Clara, California

Attn: Mr. William Steckel

President and Chief Executive Officer

     Any party may change the above specified recipient and/or mailing address by notice to all other parties given in the manner herein prescribed. All notices shall be deemed given on the day when
actually delivered as provided above (if delivered personally or by facsimile, provided that any such facsimile is received during regular business hours at the recipient’s location) or on the day shown on the return receipt (if delivered by
mail or delivery service).

9. Headings.  The titles and headings to the Sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Note. This Note shall be construed without regard to any presumption or other rule requiring construction hereof against the party causing this Note to be drafted.

- 4 -

	
Exhibit 10.2

10. Governing Law; Waiver of Jury Trial. This Note shall be governed by and construed under the laws of the State of California, as applied to agreements among
California residents, made and to be performed entirely within the State of California, without giving effect to conflicts of laws principles that would require the application of the laws of any other jurisdiction. THE PARTIES EACH HEREBY, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE
TRANSACTIONS.

[the remainder of this page is intentionally left blank]

- 5 -

IN WITNESS WHEREOF, the Payor has executed this Note as of the date first written above.

	
DayStar Technologies, Inc.,

a Delaware corporation

By: 
____________________________

Name:

Title:

[SIGNATURE PAGE TO SECURED PROMISSORY NOTE]

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