DayStar Technologies, Inc. (the "Company") and Michael Moretti, entered into a Purchase Agreement (the "Purchase Agreement") dated as of January 6, 2010. Pursuant to the Purchase Agreement, Mr. Moretti agreed to loan the Company the amount of $250,000 (the "Loan") to fund ongoing research and development and related business operations.   On January 6, 2010, the Company issued Mr. Moretti (a) a Secured Convertible Promissory Note (the "Note") and (b) a warrant to purchase 500,000 shares of the Company's common stock (subject to adjustment for certain dilutive transactions) (the "Warrant"). The Note is convertible into shares of the Company's common stock based on a $0.50 conversion price and the warrant has an exercise price of $0.80 per share. The Note carries an interest rate of 10% per annum.

    The foregoing descriptions of the Purchase Agreement, Note and Warrant do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement, Note and Warrant which are included as exhibits to this report and which are incorporated herein by reference.

    As of January 6, 2010, Mr. Moretti owned directly 525,000 shares of common stock and upon conversion and exercise of the outstanding convertible securities and warrants held by Mr. Moretti, an additional 1,000,000 common shares of the Company.

Security Agreement

    In connection with the transaction discussed above, the Company and Mr. Moretti entered into a Security Agreement effective as of January 6, 2010, (the "Security Agreement"). As security for the Loan, the Security Agreement grants Mr. Moretti a security interest in the Company's contracts, intellectual property, all of the Company's other assets, and certain assets as reflected in an exhibit to the Security Agreement. It is anticipated that Mr. Moretti's security interest will be pari passu with earlier lenders to the Company.

    The foregoing description of the Security Agreement does not purport to be complete and is qualified in its entirety by reference to the Security Agreement which is included as an exhibit to this report and which is incorporated herein by reference.

Registration Rights Agreement

    In connection with the transaction discussed above, the Company and Mr. Moretti entered into a Registration Rights Agreement dated as of January 6, 2010 (the "Registration Rights Agreement") pursuant to which the Company granted Mr. Moretti registration rights with respect to the shares of the Company's common stock that may be issued upon either conversion of the Note or exercise of the Warrant.

    The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement which is included as an exhibit to this report and which is incorporated herein by reference.

    The foregoing descriptions of the Note and Warrant do not purport to be complete and are qualified in their entirety by reference to Item 1.01 of this report and to the Note and Warrant which are included as exhibits to this report and which are incorporated herein by reference.

10.1                Purchase Agreement, dated as of January 6, 2010, between DayStar Technologies, Inc.

10.2                Secured Convertible Promissory Note

10.4                Registration Rights Agreement, dated as of January 6, 2010, between

10.5                Warrant to Purchase 500,000 Shares of Common Stock Dated January 6, 2010

10.6                Form of Intercreditor Agreement Dated January 6, 2010