Exhibit 10.2
PURCHASE AGREEMENT
T HIS P URCHASE A GREEMENT ( the
“Agreement” ) is made as of the 18th day
of September, 2009 (the “Effective Date”
) between DayStar Technologies, Inc., a Delaware corporation (the
“Company” ), and TD Waterhouse RRSP
Account 240832S, in trust for Peter Alan Lacey as beneficiary (the
“Purchaser” ). The Company and the
Purchaser are sometimes referred to individually as a “
Party ” and collectively as the “
Parties .”
R ECITALS
The Company desires to issue and the
Purchaser desires to purchase (A) a secured convertible
promissory note (the “ Note ”) in
substantially the form attached hereto as Exhibit A,
(B) a warrant in substantially the form attached hereto as
Exhibit B (the “ First Warrant ”),
and (C) a warrant in substantially the form attached hereto as
Exhibit C (the “ Second Warrant ”
and, together with the First Warrant, the “
Warrants ”). The Note, the Warrants and any
securities issuable upon conversion of the Note of the exercise of
the Warrants are collectively referred to herein as the “
Securities ”.
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. P URCHASE AND S ALE OF N OTE AND W ARRANTS .
1.1 Sale and Issuance of Note and
Warrants. 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:
(i) the Note in substantially the form attached
hereto as Exhibit A in the principal amount of
US$2,000,000,
(ii) the First Warrant in substantially the form
attached hereto as Exhibit B , and
(iii) the Second Warrant in substantially the form
attached hereto as Exhibit C .
1.2 Closing;
Delivery.
(a) Closing Date.
The closing of the purchase and sale
of the Note and the Warrants (the
“Closing” ) shall be held on
September 18, 2009 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 and the Warrants by wire
transfer from the Purchaser to a bank designated by the Company and
executed counterpart signature pages to the Security Agreement (as
defined below) and the Registration Rights Agreement (as defined
below); and (ii) the Company shall issue and deliver to the
Purchaser the executed Note in favor of the Purchaser, the executed
First Warrant in favor of the Purchaser and executed counterpart
signature pages to the Security Agreement (as defined below) and
the Registration Rights Agreement (as defined below). Subject to
the execution and delivery of the amendment to the Rights Plan (as
defined below) as set forth in Section 4.7, the Company shall
issue and deliver the executed Second Warrant as soon as possible
after the Closing. The Parties agree that, unless and until such
amendment is obtained, the Purchaser will not beneficially own the
Second Warrant or any shares of stock underlying the Second
Warrant.
(c) Purchase Price
. The “Purchase Price”
of the Note and the Warrants shall equal the principal amount of
the Note.
1.3 Use of Proceeds
. The Company must use the proceeds
related to the sale of the Note and the Warrants for
(i) operating capital and (ii) funding of the
Company’s ongoing research and development and related
business operations, as more fully described in the Letter of
Intent executed by the Parties on September 18, 2009. The use
of any such proceeds in any amount exceeding $5,000 must be
approved by the Chief Executive Officer of the Company.
2. S ECURITY I NTEREST . The
indebtedness represented by the Note shall be secured by certain
assets of the Company as further provided in the Security Agreement
attached hereto as Exhibit D (the “Security
Agreement” ).
3. R EGISTRATION R IGHTS . The
shares of Company common stock into which the Note may be converted
and the Warrants may be exercised shall be subject to registration
rights as further provided in the Registration Rights Agreement
attached hereto as Exhibit E (the “ Registration
Rights Agreement ”).
4. R EPRESENTATIONS , W ARRANTIES AND C OVENANTS OF THE C OMPANY . The
Company hereby represents and warrants to the Purchaser as
follows:
4.1 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.
4.2 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 and Warrants, has been taken prior to the Closing. This
Agreement, the Note when executed and delivered by the Company, and
the Warrants 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.
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4.3 Issuance of the
Securities. The
Securities are duly authorized and, when issued and paid for in
accordance with this Agreement, the Security Agreement, the Note
and the Warrants, will be duly and validly issued, fully paid and
nonassessable (as applicable), and free and clear of all liens. The
Company has reserved from its duly authorized capital stock the
maximum number of shares of common stock (i) issuable upon the
conversion of the Note and (ii) that may be issued upon the
exercise of the Warrants.
4.4 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 and the Warrants 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.
4.5 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 and the Warrants, will not
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