Exhibit 10.1

EMPLOYMENT AGREEMENT

between
DayStar Technologies, Inc.
and
Magnus Ryde

     This EMPLOYMENT AGREEMENT (“Agreement”), executed as of February 15, 2010
(“Effective Date”) between Magnus Ryde (“Executive”), an individual currently
residing in California, and DayStar Technologies, Inc., a Delaware corporation
(the “Company”), having its principal office at 2972 Stender Way, Santa Clara,
CA 95054.

     NOW, THEREFORE, in consideration of the agreements and covenants contained
herein, the Executive and the Company hereby agree as follows:

ARTICLE I Employment and Term

  Section 1.01 Position; Responsibilities.

     (a) The Company hereby employs Executive as its Chief Executive Officer
upon the terms and conditions hereinafter set forth.

     (b) Executive shall at all times hold the position described above or such
other senior management level positions as determined by the Board of Directors
of the Company (the “Board”) or its designee, and perform the duties,
responsibilities and authorities customarily associated with such positions or
such other senior management level duties as determined by the Board or its
designee, so long as such other duties are consistent with the Executive’s
skills. Executive shall report directly and solely to the Board or the Board’s
designee.

Section 1.02 Performance of Duties/Other Commitments and Activities.

     (a) Executive shall at all times endeavor to perform duly and faithfully
all of his duties hereunder to the best of his abilities.

     (b) Executive shall devote his full business time, best efforts and
business judgment, skill and knowledge to the advancement of the Company’s
interests and to the discharge of his duties and responsibilities hereunder;
provided, however, that nothing herein shall be construed as preventing
Executive from engaging in any of the activities described below so long as such
activities do not impair his ability to fulfill his duties and responsibilities
under this Agreement or violate any other agreements between Executive and the
Company: (i) investing his assets in such form or manner as shall not require
any material services on his part in the operations or affairs of the companies
or the other entities in which such investments are made;

     (ii) serving on the board of directors of any company; provided that he
obtains the prior written approval of a majority of the Board of Directors (for
board positions not disclosed to the Company as of the date hereof) and shall
not be required to render any material services with respect to the operations
or affairs of any such company, it being acknowledged that Executive currently
serves on the boards of Quanlo AB, GLO AB and Sol Voltaics, AB and may continue
to serve onsuch boards and provides services consistent with his past practices;

(iii)      engaging in religious, charitable, educational or other community or
nonprofit activities;   (iv)      serving in such capacities as may be
reasonably necessary for Executive to maintain his active  

professional licensing as a member of any professional organization that
reasonably relates to his employment with and the business of the Company; or
(v) continuing to serve as a partner of Mars Capital Group LLC.

     (c) Executive’s base of operations under this Agreement is the Company’s
headquarters offices which is currently located in the San Francisco, California
bay area.

     Section 1.03 Term. Executive’s term of employment under this Agreement (the
“Term”) shall commence on the Effective Date and shall expire on February 15,
2013; provided, however, that the Term shall be automatically extended for
additional one (1) year period such date, and annually thereafter (each such
anniversary, commencing with February 15, 2013, the “Anniversary Date”), unless
the Executive or the Company has received a written

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Exhibit 10.1

Notice of Non-Renewal delivered no later than thirty (30) days prior to the
Anniversary Date, pursuant to Section 6.01 below. Executive’s rights to
compensation upon his separation from service with the Company, including but
not limited to upon the non-renewal of this Agreement, are as set forth in
Article 3 below.

     Section 1.04 Representations and Warranty of Executive. Executive hereby
represents and warrants to the Company that he is not aware of any presently
existing fact, circumstance or event (including, but without limitation, any
health condition or legal constraint) which would preclude or restrict him from
providing to the Company the services contemplated by this Agreement, or which
would give rise to any breach of any term or provision hereof, or which could
otherwise result in the termination of his employment hereunder for Cause or
Good Reason (as such terms are defined in Article 3). Any and all agreements
between Executive and any prior employer as well as any agreements to which
Executive is a party containing any restriction upon Executive’s ability to use
or disclose confidential information or engages in any business activity are
listed in Appendix “A” and shall be promptly made available to the Company upon
request.

     Section 1.05 Representations and Warranty of Company. The Company hereby
represents and warrants to Executive that it has received all authorizations and
has taken all actions, necessary or appropriate for the due execution, delivery
and performance of this Agreement.

ARTICLE II Compensation

     Section 2.01 General. The Company shall compensate Executive for all of his
services under this Agreement, as set forth herein.

     Section 2.02 Basic Compensation. Executive’s salary (“Base Salary”) when
annualized shall be at the rate of $300,000 and shall be payable in bi-weekly or
other installments in accordance with the Company’s normal payment schedule for
senior management (but not less frequently than monthly). During the period
through December 31, 2010, the Company may, at its sole option, defer up to
one-half of the Base Salary payments for the period provided in this Section
2.02. Such deferred payments shall be due and payable in full upon the earlier
to occur of : (i) the consummation of a capital raising transaction and (ii)
December 31, 2010.

     Section 2.03 Incentive Compensation. Executive shall be eligible to
participate in a bonus program to be established by the mutual agreement of the
Company and the Executive each acting in their sole discretion once the Company
begins to sell products. Nothing herein shall be deemed to obligate the Company
to provide any payments under a bonus program unless and until such bonus
program is established.

  Section 2.04 Other Benefits.

     (a) During the Term, Executive shall be entitled to participate in all
employee benefit plans, including retirement programs, if any, group health care
plans, and all fringe benefit plans, of the Company , subject to the terms and
conditions of such plans. Such plans shall at all times be comparable to those
made available to the senior-most management of the Company.

     (b) In addition, the Company shall provide Executive with the following
benefits during the Term: (i) Reimbursement for Company business travel
(including overnight accommodations as reasonably deemed necessary by
Executive); (ii) Company paid cell phone and home office communication equipment
(fax, internet access, etc.) (without any requirement to maintain records of
specific use); and (iii) Reimbursement for reasonable out-of-pocket home office
expenses.

     (c) During the Term, Executive shall be entitled to 15 days per year of
paid vacation in accordance with the Company’s Vacation Policy and calculations
as set forth in the Company Employee Handbook. After four (4) years of service
Executive shall be entitled to accrue up to an additional 5 days of paid
vacation in each calendar year. With respect to all unused vacation time, unless
otherwise approved by the Board of Directors and the Compensation Committee of
such Board, Executive shall carry over unused vacation time for periods prior to
calendar year in accordance with the Company’s Employee Handbook or supplemental
written policies, as determined from time to time.

     (d) Executive shall also be entitled to such paid holidays and paid sick
leave as shall be authorized by the Company for its senior-most officers
pursuant to its written policies, as determined from time to time.

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Exhibit 10.1

     Section 2.05 Expense Reimbursements. The Company shall reimburse Executive
for all proper expenses incurred by him in the performance of his duties
hereunder in accordance with the policies and procedures of the Company as in
effect from time to time.

     Section 2.06 Excise Tax. Notwithstanding any other provision of this
Agreement, if the aggregate present value of the “parachute payments” to the
Executive, determined under Section 280G(b) of the Code would be, but for this
Section 2.06, at least three times the “base amount” determined under such
Section 280G, then the parachute payments otherwise payable under this Agreement
(and any other amount payable hereunder or any other severance plan, program,
policy or obligation of the Company) shall be reduced so that the aggregate
present value of the parachute payments to the Executive determined under
Section 280G, does not exceed 2.99 times the base amount. In no event, however,
shall any benefit provided hereunder be reduced to the extent such benefit is
specifically excluded from treatment under Section 280G of the Code as a
“parachute payment” or as an “excess parachute payment”. Any decisions regarding
the requirement or implementation of such reductions shall be made by the tax
counsel and accounting firm retained by the Company. If a reduced amount is to
be paid, (i) Executive shall have no rights to any additional payments and/or
benefits constituting the payments, and (ii) reduction in payments and/or
benefits shall occur in the following order: (1) reduction of cash payments; (2)
cancellation of accelerated vesting of stock awards other than stock options;
(3) cancellation of accelerated vesting of stock options; and (4) reduction of
other benefits (if any) paid to Executive. In the event that acceleration of
compensation from Executive’s stock awards is to be reduced, such acceleration
of vesting shall be canceled in the reverse order of the date of grant.

     Section 2.07 Withholding. The Base Salary and all other payments and
benefits provided to Executive in connection with his services to the Company
shall be subject to all withholding and deductions required by federal, state or
other law (including those authorized by Executive but not otherwise required by
law), including but not limited to state, federal and local income taxes,
unemployment tax, Medicare and FICA, together with such deductions as Executive
may from time to time specifically authorize under any employee benefit program
which may be adopted by the Company for the benefit of its senior executives or
Executive.

     Section 2.08 Equity Grant. As an inducement to join the Company, Executive
shall receive the equity compensation award attached hereto as Exhibit A.

ARTICLE III Termination of Employment

     Section 3.01 Right to Terminate. Executive’s employment hereunder is “at
will” and shall be terminable by either party at any time with or without Cause
or Good Reason and any such termination shall not constitute a breach of this
Agreement, provided the notice set forth in subsection 3.02 is provided. Upon
any termination of Executive’s employment, Executive will have no rights to
receive any compensation from the Company except as set forth in this Article
III.

     Section 3.02 Notice. Executive shall give the Company at least sixty (60)
days’ advance written notice prior to any termination by Executive.

     Section 3.03 Termination for Good Reason. The Executive may terminate
employment for Good Reason or without Good Reason. “Good Reason” means, without
the consent of the Executive: (i) any material reduction in Executive’s base pay
and bonus target amount that is not remedied by the Company within sixty (60)
days after receipt of written notice thereof from the Executive; (ii) the
assignment to the Executive of any duties or any other action by the Company
that results in a material diminution in the Executive’s authority, duties, or
responsibilities described in Section 1.01(b) of this Agreement that is not
remedied by the Company within sixty (60) days after receipt of written notice
thereof from the Executive; (iii) any material breach by the Company of this
Agreement that is not remedied by the Company within sixty (60) days after
receipt of written notice thereof from the Executive; or (iv) any failure of the
Company under Section 6.10 below to use its best efforts to maintain directors’
and officers’ liability insurance coverage for Executive that is not remedied by
the Company within sixty (60) days after receipt of written notice thereof from
the Executive. Notwithstanding the foregoing, Good Reason shall not exist unless
the Executive provides notice of any condition described in (i)-(iv) above
within ninety (90) days of the initial existence of the condition and the
effective

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Exhibit 10.1

date of Executive’s termination, following the Company’s failure to reasonably
cure such condition, is not later than the one hundred and twentieth (120th) day
after the Company received notice of the condition.

     Section 3.04 Procedure for Termination for Good Reason. A termination of
employment by the Executive for Good Reason shall be effectuated by giving the
Company written notice (“Notice of Termination for Good Reason”) of the
termination, setting forth in reasonable detail the specific conduct of the
Company that constitutes Good Reason and the specific provision(s) of this
Agreement on which the Executive relies. A termination of employment by the
Executive for Good Reason shall be effective on the sixtieth (60th) day
following the date when the Notice of Termination for Good Reason is received by
the Company, unless the act or admission that constitutes the Good Reason is
cured prior to the expiration of said period and the Executive is given written
notice thereof, the Notice of Termination for Good Reason sets forth a later
date (as provided in Section 3.03 above) for the effectiveness of the
termination or the Company accepts the Executive’s termination for Good Reason
on an earlier date.

     Section 3.05 Termination for Cause. The Company shall have the right to
terminate Executive’s employment hereunder for Cause. For purposes hereof,
“Cause” shall be defined as the Board’s good faith determination that the
Executive has: (i) been convicted of or entered a plea of nolo contendere with
respect to a criminal offense constituting a felony; (ii) committed one or more
acts or omissions constituting fraud, embezzlement or breach of a fiduciary duty
to the Company; (iii) committed one or more acts constituting gross negligence
or willful misconduct; (iv) habitually abused alcohol or any controlled
substance or reported to work under the influence of alcohol or any controlled
substance (other than a controlled substance which Executive is properly taking
under a current prescription), (v) engaged in harassment of any employee or
customer of the Company in violation of Company policy; (vii) committed a
material violation of any Company policy; (viii) been insubordinate or
dishonest; (ix) engaged in self-dealing or in any act constituting a conflict of
interest; (ix) exposed the Company to criminal liability through negligence or
wrongdoing of any kind; (x) disclosed the Company’s confidential information in
violation of his obligations under this Agreement; or (xi) failed, after written
warning specifying in reasonable detail the breach(es) complained of, to
substantially perform his duties under this Agreement.

     Notwithstanding the foregoing in the event of a Change of Control, a
termination by the Company of the Executive for any reason during the twelve
(12) month period immediately following the Change of Control, other than an
intentional and malicious act or omission that is reasonably likely to result in
material injury to the business or reputation of the Company, shall be deemed to
be a termination without Cause for all purposes under this Agreement.

     Section 3.06 Procedure for Termination for Cause. A termination of the
Executive’s employment for Cause shall be effected in accordance with the
following procedures. The Company shall give the Executive written notice
(“Notice of Termination for Cause”) of its intention to terminate the
Executive’s employment for Cause, setting forth in reasonable detail the
specific conduct of the Executive that it considers to constitute Cause and the
specific provision(s) of this Agreement on which it relies and stating the date,
time and place of the Special Board Meeting. The “Special Board Meeting” means a
meeting of the Board called and held specifically for the purpose of considering
the Executive’s termination for Cause that takes place not less than thirty (30)
and not more than sixty (60) days after the Executive receives the Notice of
Termination for Cause. The Executive shall be given an opportunity, together
with counsel, to be heard at the Special Board Meeting. The Executive’s
termination for Cause shall be effective when and if a resolution is duly
adopted at the Special Board Meeting, stating that, in the good faith opinion of
the Board, the Executive is guilty of the conduct described in the Notice of
Termination for Cause, such conduct constitutes Cause under this Agreement and
in the case of a termination for Cause as defined in subsection 3.05(xi), such
conduct has not ceased or been cured between the date the Executive received the
Notice of Termination for Cause and the date of the meeting.

     Section 3.07 Death. In the event that the Executive dies while employed
under this Agreement, the Company’s obligations to Executive under this
Agreement shall immediately cease and Executive shall have no rights to receive
the severance package set forth in Section 3.09 below. All benefits accrued to
the date of death, including vested securities, health and disability benefits
shall inure to the benefit of Executive’s heirs and assigns.

     Section 3.08 Disability. In the event that the Board determines in its sole
discretion that Executive has been disabled from substantially performing his
duties for any one hundred and twenty (120) days within any twelve (12) month
period while employed under this Agreement, the Company may terminate
Executive’s employment for

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Exhibit 10.1

Cause (including in any period following a Change of Control) and Executive
shall have no rights to receive the severance package set forth in Section 3.09
below.

  Section 3.09 Severance Package.

     (a) Change of Control Severance Package. In the event Executive’s
employment is terminated during the Term in a manner that constitutes a
“separation from service” (as such term is defined in Treasury Regulation
Section 1.409A-1(h)) on or after a Change of Control (as defined below) and
prior to the date that is thirty (30) days immediately following the first
anniversary of the Change of Control, by the Company other than for Cause, and
other than as a result of a timely Notice of Non-Renewal or Executive’s death or
disability (as determined under Section 3.08), then, subject to the satisfaction
of the conditions set forth in Section 3.09(d) below, Executive’s change of
control severance package (“Change of Control Severance Package”) shall be as
follows: (i) Executive shall receive two hundred fifty percent (250%) of the
aggregate of (x) Executive’s annual Base Salary for the year in which such
termination occurs, and (y) the target (i.e., at 100% of goal attainment) amount
of any Incentive Payment payable to Executive for the year in which such
termination occurs under the Management Incentive Program applicable to
Executive. Such amount shall be paid ratably in accordance with the Company’s
normal salary payment schedule for senior management over the eighteen (18)
month period following the date of the Executive’s separation from service
(except as set forth in Section 3.09(d) and

(g)      below). The foregoing payment is referred to herein as the “Change of
Control Severance Pay”; (ii) During the eighteen (18) month period immediately
following the termination of employment, the  

Company shall pay the premium for continued medical and any other applicable
health insurance coverage under COBRA for Executive (and if applicable, his
family) subject to Executive’s timely election of such COBRA coverage, the
continued eligibility for participation by Executive and his family, and subject
to COBRA’s terms, conditions and restrictions; and

     (iii) All unvested compensatory equity awards (including any stock options
and restricted stock awards) then held by Executive, if any, shall vest
automatically effective as of immediately prior to the termination of
Executive’s employment.

     (b) Definition of Change in Control. “Change in Control” shall mean the
occurrence of any of the following events: (A) any consolidation or merger of
the Company in which the Company is not the continuing or surviving corporation
or which contemplates that all or substantially all of the business and/or
assets of the Company shall be controlled by another corporation, in either case
where the continuing, surviving or other corporation both (i) is not directly or
indirectly owned by holders of at least 50% of the combined voting power of the
Company’s securities outstanding immediately prior to such consolidation or
merger and (ii) does not have a board of directors approved by or consisting of
more than one-half of the Company’s Board members as the Board was constituted
immediately prior to the transaction, (B) a recapitalization (including an
exchange of Company equity securities by the holders thereof), in either case,
in which any “Person” (as such term is used in Sections 13(d) and 14(d)(2) of
the Exchange Act) becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities having the right to vote in the election of directors and
the Company does not have a board of directors approved by or consisting of more
than one-half of the Company’s Board members as the Board was constituted
immediately prior to the transaction; (C) any sale, lease, exchange or transfer
(in one transaction or in a series of related transactions) of all or
substantially all of the assets of the Company and its subsidiaries; D) approval
by the shareholders of the Company of any plan or proposal for the liquidation
or dissolution of the Company, unless such plan or proposal is abandoned within
60 days following such approval; or (E) any “Person” (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) shall become the beneficial
owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
securities of the Company representing more than 50% of the combined voting
power of the Company’s then outstanding securities having the right to vote in
the election of directors, and following such acquisition of securities, the
Company does not have a board of directors approved by or consisting of more
than one-half of the Company’s Board members as the Board was constituted
immediately prior to the transaction.

     (c) Regular Severance Package. In the event Executive’s employment is
terminated during the Term in a manner that constitutes a “separation from
service” by the Company other than for Cause, or by Executive for Good Reason,
in either such case other than on or within the period ending on the 30th day
following the first anniversary of a Change of Control, and in all cases other
than as a result of a timely Notice of Non-Renewal or Executive’s

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Exhibit 10.1

death or disability (as determined under Section 3.08), then, subject to the
satisfaction of the conditions set forth in subsection 3.09(d) below,
Executive’s regular severance package (“Regular Severance Package”) shall be as
follows: (i) Executive shall receive one hundred percent (100%) of the
Executive’s annual Base Salary for a period of 12 months following such
termination. Such amount shall be paid ratably in accordance with the Company’s
normal salary payment schedule for senior management (but not less frequently
than monthly) over twelve months immediately following the date of the
Executive’s separation from service (except as set forth in Section 3.09(d) and
(g) below). The foregoing payment is referred to herein as the “Regular
Severance Pay”; (ii) During the 12 month period immediately following the
termination of employment, the Company shall also pay the premium for continued
medical and any other applicable health insurance coverage under COBRA for
Executive (and if applicable, his family) subject to Executive’s timely election
of such COBRA coverage, the continued eligibility for participation by Executive
and his family, and subject to COBRA’s terms, conditions and restrictions.

     (d) Conditions for Severance Packages. Executive shall receive the Change
of Control Severance Package and the Regular Severance Package described in
subsections 3.09(a) and (c), if and only if (i) Executive duly executes and
returns within forty-five days to the Company (and allows to become effective in
accordance with its terms) a termination agreement (“Termination Agreement”)
satisfactory to the Company in its sole discretion, which shall include a
general release of any and all claims arising out of Executive’s employment or
cessation of employment against the Company and any other persons or entities
designated by the Company, other than a release of rights for payments and
benefits set forth in section 3.09(a) or (c) (as applicable) and, in the
Company’s sole discretion, provisions requiring the Executive not to disparage
the Company or its employees and Board, not use or disclose information deemed
confidential by the Company, to reasonably cooperate with the Company in
transitioning business matters and handling claims and litigation; and (ii)
Executive complies with his obligations under this Agreement and the Termination
Agreement. Notwithstanding the payment schedules set forth in Section 3.09(a)
and (c) above, none of the payments or benefits will be paid or otherwise
delivered prior to the effective date of the Termination Agreement. Except as
otherwise provided in Section 3.09(g), on the first regular payroll pay day
following the effective date of the Termination Agreement, the Company will pay
Executive the payments and benefits Executive would otherwise have received
under Section 3.09 on or prior to such date but for the delay in payment related
to the effectiveness of the Termination Agreement, with the balance of the
payments and benefits being paid as originally scheduled. All amounts payable
under this Section 3.09 will be subject to standard payroll taxes and
deductions.

     (e) Severance Package – Company Non-Renewal of Term. Subject to the
conditions set forth in 3.09(f), in the event that the Company timely provides
the Executive with Notice of Non-Renewal and such notice results in the
termination of Executive’s employment at the end of the Term (including any
extension of the original Term) in a manner that constitutes a “separation from
service” other than a termination by the Company for Cause and other than as a
result of Executive’s death or disability (as determined under Section 3.08),
then as and for a Severance Package (“Non-Renewal Severance Package”): (i)
Executive shall receive the product of the Regular Severance Pay multiplied by a
fraction, (a) the numerator of which shall be the number equal to (I) fifty-two
(52) minus the number of full weeks (rounded down for any partial weeks) from
the date Executive received the Notice of Non-Renewal until the last day of the
Term (such number of weeks until the last day of the Term, the “Weeks of
Notice”), and (b) the denominator of which shall be fifty-two (52). The
foregoing payment is referred to herein as “Non-Renewal Severance Pay”.
(Accordingly, Notice of Non-Renewal received by Executive forty-two (42) full
weeks prior to the last day of the Term and Regular Severance Pay totaling
$280,000 would result in Non-Renewal Severance Pay in the amount of $53,846
(10/52 x $280,000 = $53,846)). Such amount shall be paid ratably in accordance
with the Company’s normal salary payment schedule for senior management, during
the “Severance Period”, which shall be the number of weeks equal to fifty-two
(52) minus the number of Weeks of Notice.

     (ii) During the Severance Period, the Company shall also pay the premium
for continued medical and any other applicable health insurance coverage under
COBRA for Executive (and if applicable, his family) subject to Executive’s
timely election of such COBRA coverage, the continued eligibility for
participation by Executive and his family, and subject to COBRA’s terms,
conditions and restrictions; and

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Exhibit 10.1

     (iii) As to the unvested compensatory equity awards (including any stock
options and restricted stock awards) then held by Executive, if any, that would
vest in the ordinary course within the ninety (90) day period immediately after
the Term expires, a portion of (the “Vested Portion”) such awards shall be
vested effective as of immediately prior to the termination of Executive’s
employment. For these purposes, the “Vested Portion” shall be the number of
unvested shares on the date Executive’s employment terminates that would vest in
the ordinary course within the ninety (90) day period immediately after the Term
expires, multiplied by a fraction, (a) the numerator of which shall be the
number of full weeks (rounded up for any partial weeks) of active service
Executive provided to the Company between the most recent prior vesting date of
the applicable equity award and the employment termination date, and (b) the
denominator of which shall be fifty-two (52). This vesting schedule shall
supersede any contrary vesting schedule or vesting provision set forth in the
documents granting the foregoing equity interests or the applicable plan
documents as amended from time to time. All other unvested equity awards shall
immediately be forfeited (subject, however, to any contrary determination of the
Board in its sole discretion).

     (f) Conditions for Non-Renewal Severance Package. Executive shall receive
the Non-Renewal Severance Package described in subsection 3.09(e), if and only
if (i) Executive duly executes and returns within forty-five days to the Company
(and allows to become effective in accordance with its terms) a termination
agreement (“Termination Agreement”) satisfactory to the Company in its sole
discretion, which shall include a general release of any and all claims arising
out of Executive’s employment or cessation of employment against the Company and
any other persons or entities designated by the Company, other than a release of
rights for payments and benefits set forth in section 3.09(e) and, in the
Company’s sole discretion, provisions requiring the Executive not to disparage
the Company or its employees and Board, not use or disclose information deemed
confidential by the Company, to reasonably cooperate with the Company in
transitioning business matters and handling claims and litigation ; and (ii)
Executive complies with his obligations under this Agreement and the Termination
Agreement. Notwithstanding the payment schedules set forth in Section 3.09(e)
above, none of the payments or benefits will be paid or otherwise delivered
prior to the effective date of the Termination Agreement. Except as otherwise
provided in Section 3.09(g), on the first regular payroll pay day following the
effective date of the Termination Agreement, the Company will pay Executive the
payments and benefits Executive would otherwise have received under Section 3.09
on or prior to such date but for the delay in payment related to the
effectiveness of the Termination Agreement, with the balance of the payments and
benefits being paid as originally scheduled. All amounts payable under this
Section 3.09 will be subject to standard payroll taxes and deductions.

     (g) Compliance with Section 409A. It is intended that each installment of
the payments and benefits provided for in this Agreement is a separate “payment”
for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance
of doubt, it is intended that payments of the amounts set forth in this
Agreement satisfy, to the greatest extent possible, the exemptions from the
application of Section 409A of the Code (Section 409A of the Code, together,
with any state law of similar effect, “Section 409A”) provided under Treasury
Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the
Company (or, if applicable, the successor entity thereto) determines that the
payments and benefits provided under this Agreement (the “Agreement Payments”)
constitute “deferred compensation” under Section 409A and Executive is, on the
termination of his employment, a “specified employee” of the Company or any
successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of
the Code (a “Specified Employee”), then, solely to the extent necessary to avoid
the incurrence of the adverse personal tax consequences under Section 409A, the
timing of the Agreement Payments shall be delayed as follows: on the earlier to
occur of (i) the date that is six months and one day after Executive’s
separation from service or (ii) the date of Executive’s death (such earlier
date, the “Delayed Initial Payment Date”), the Company (or the successor entity
thereto, as applicable) shall (A) pay to Executive a lump sum amount equal to
the sum of the Agreement Payments that

Executive would otherwise have received through the Delayed Initial Payment Date
if the commencement of the payment of the Agreement Payments had not been so
delayed pursuant to this Section 3.09(g) and (B) commence paying the balance of
the Agreement Payments in accordance with the applicable payment schedules set
forth in this Agreement.

     Section 3.10 Accrued Payments. In the event Executive’s employment under
this Agreement is terminated during the Term, by the Company other than for
Cause or by Executive for Good Reason, Executive shall in all events be paid all
accrued but unpaid Base Salary, earned but unpaid Incentive Compensation for any
prior year, reimbursable expenses and other accrued benefits, if any, through
the date of termination.

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Exhibit 10.1

     Section 3.11 No Additional Payment or Reduction Due to Mitigation. The
parties agree that the foregoing shall be Executive’s sole and exclusive
entitlement under this Agreement by reason of termination by Executive for Good
Reason or by the Company other than for Cause. Such payments shall not be
reduced or limited by amounts Executive might earn or be able to earn from other
employment or ventures (except with respect to Executive’s eligibility for COBRA
payments, in accordance with applicable law).

     Section 3.12 Rights on Termination for Cause or Without Good Reason.
Executive shall have no rights to receive any of the severance compensation set
forth in Section 3.09 above in the event that the Company shall duly terminate
Executive’s employment for Cause or in the event that Executive shall terminate
his employment with the Company for reasons other than Good Reason; provided,
however, that Executive shall in all events be paid all accrued but unpaid Base
Salary, earned but unpaid Incentive Compensation for any prior year,
reimbursable expenses and other accrued benefits, if any, through the date of
termination. In addition, in the event that the Company shall terminate
Executive’s employment for Cause or in the event that Executive shall terminate
his employment with the Company for reasons other than Good Reason, then all
unvested equity awards then held by Executive, if any, shall automatically be
forfeited (subject, however, to any contrary determination of the Board in its
sole discretion). The parties agree that the foregoing shall be Executive’s sole
and exclusive entitlement under this Agreement by reason of termination by
Executive for other than Good Reason or by the Company for Cause. Such payments
shall not be reduced or limited by amounts Executive might earn or be able to
earn from other employment or ventures.

ARTICLE IV Confidential Information;
Inducing Company Employees; Non-Solicitation

     Section 4.01 Confidential Information. Without the prior written consent of
Company, except as shall be necessary in the performance of Executive’s assigned
duties, Executive shall not disclose Company Confidential Information (as
hereinafter defined) to any third party or use the Company Confidential
Information for Executive’s direct or indirect benefit or the direct or indirect
benefit of any third party, and Executive shall maintain in strict confidence,
both during and after Executive’s employment, the confidentiality of any and all
Company Confidential Information. “Company Confidential Information” means any
information (written, oral or stored in any information storage and/or retrieval
medium or device) that the Company treats as confidential or proprietary,
including, but not limited to, all of the Company’s trade secrets (including,
without limitation, any trade secrets relating to thin film
copper-indium-gallium-di-selenide solar cells, other related thin film
photovoltaic technologies, and sputtering techniques) and any information
constituting or relating to: the Inventions (as hereinafter defined); research
and development plans; manufacturing or production designs, protocols,
processes, methods and data; existing and proposed products or services; product
plans, sketches, and blueprints; tests and test results; computer codes or
instructions (including source and object code, program logic algorithms,
subroutines, modules and related documentation, including program notation);
business studies; business development plans and efforts; business procedures;
financial data (including, but not limited to, revenue and cost data,
projections and/or forecasts); marketing and sales data, methods, plans and
efforts; the identities of customers, resellers, independent contractors, and
suppliers and prospective customers, resellers, independent contractors, and
suppliers; the terms of contracts and agreements with customers, resellers,
independent contractors, and suppliers; any information or data provided by or
on behalf of independent contractors, resellers, customers, prospective
customers, prospective resellers, or others subject to the terms of a
confidentiality, non-disclosure or similar agreement or the reasonable
expectation that such information or data would be treated as “confidential” or
non-public information or data; information with respect to Company’s employees
and independent contractors, including, but not limited to, their skills,
abilities, assignments, performance, compensation, and benefits, as well as the
nature and other terms and conditions of their relationship with the Company;
and any other information used or developed by Company that has not been made
available by Company to the general public. Failure to mark any of the Company
Confidential Information as confidential or proprietary shall not affect its
status as Company Confidential Information under the terms of this Agreement.
Additionally, Executive shall comply with the confidentiality requirements of
any client of Company and shall execute such policies, procedures or agreements
as such client requires. Company shall at all times retain any and all right,
title and interest in and to the Company Confidential Information and Executive
shall have no rights to or in the Company Confidential Information. In the event
of any dispute between Executive and the Company or between Executive or the
Company and others, Executive shall cooperate with the Company as to redaction
or other protective measures with respect to any unnecessary public disclosure
of any Company Confidential Information.

  Section 4.02 Intellectual Property.

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Exhibit 10.1

     (a) Inventions Retained and Licensed. Executive has attached hereto, as
Attachment “1”, a list describing all inventions, original works of authorship,
developments, improvements, and trade secrets which were made by Executive prior
to the date of this Agreement (collectively referred to as “Prior Inventions”),
which are owned by Executive alone or jointly with others, which relate in any
way to Company’s existing or proposed business, products or research and
development, and which are not assigned to Company hereunder and/or were not
previously assigned by Executive to Company. If no items are listed in
Attachment “1,” Executive agrees and represents that there are no Prior
Inventions which are owned by Executive or in which Executive has any interest.
If in the course of Executive’s employment with Company, Executive incorporates
into a Company product, process or machine a Prior Invention owned by Executive
or in which Executive has an interest, Company is hereby granted and shall have
a worldwide, non-exclusive, royalty-free, irrevocable, perpetual, assignable,
transferable, and sublicenseable license to make, have made, modify, use and
sell such Prior Inventions as part of or in connection with such product,
process or machine.

     (b) Assignment of Inventions. Executive shall promptly make full written
disclosure to Company, will hold in trust for the sole right and benefit of
Company, and hereby assigns, transfers, conveys, grants and sets over to
Company, or its designee, all Executive’s worldwide right, title, and interest
in and to any and all inventions, original works of authorship, developments,
concepts, improvements or trade secrets, including, but not limited to, all
writings, documents, discoveries, computer programs or instructions (whether in
source code, object code, or any other form), plans, memoranda, tests and test
results, research, designs, graphical elements, graphic layouts and designs,
website designs, computer graphics, computer animations, artwork models,
advertisements, marketing materials, specifications, data, diagrams, sales and
marketing techniques, customer training materials and techniques, flow charts,
and/or other techniques (whether reduced to written form or otherwise) that
Executive may solely or jointly create, make, record, discover, conceive,
develop or reduce to practice, or cause to be created, made, recorded,
discovered, conceived, developed or reduced to practice, whether during working
hours at Company’s facility or at any other time or location, whether upon the
request or suggestion of Company or otherwise, and whether or not patentable or
registrable under copyright or similar laws, from the date Executive’s
employment with Company commenced until Executive’s cessation of employment with
Company, which relate in any way to Company’s existing or proposed business,
products or research and development, including, but not limited to, the work
that Executive performs for Company (collectively referred to as “Inventions”).
The Inventions shall include any and all intellectual property rights inherent
in the Inventions and appurtenant thereto including, without limitation, all
patent rights, copyrights, trademarks, know-how and trade secrets (collectively
referred to as “Intellectual Property Rights”). Executive further acknowledges
that all original works of authorship which are made by Executive (solely or
jointly with others) from the date Executive’s employment with Company commenced
until Executive’s cessation of employment with Company that relates in any
manner to the current or future business of Company and which are protectable by
copyright are “works made for hire,” as that term is defined in the United
States Copyright Act.

     (c) Maintenance of Records. Executive shall keep and maintain adequate and
current records of all Inventions made by Executive (solely or jointly with
others) during Executive’s employment with Company. The records will be in the
form of notes, sketches, drawings, and any other format that may be specified by
Company. The records will be available to and remain the sole and exclusive
property of Company at all times.

     (d) Further Assurances. Upon the request and at the expense of Company,
Executive shall execute and deliver all instruments and documents and take such
other acts as may be necessary or desirable to document all assignments and
transfers contemplated in this Agreement and to enable Company to secure its
rights in the Inventions and all Intellectual Property Rights relating thereto
in any and all jurisdictions, or to apply for, prosecute and enforce
Intellectual Property Rights in any and all jurisdictions with respect to any
Inventions, or to obtain any extension, validation, re-issue, continuance or
renewal of any such Intellectual Property Rights. Executive further agrees that
Executive’s obligation to execute or cause to be executed, when it is in
Executive’s power to do so, any such instrument or papers shall continue after
the termination of this Agreement. If Company is unable for any other reason to
secure Executive’s signature to apply for or to pursue any application for any
United States or foreign patent, trademark, copyright or other registration
covering Inventions assigned to Company as above, then Executive hereby
irrevocably designates and appoints Company and its duly authorized officers and
agents as Executive’s agent and attorney-in-fact, to act for and in Executive’s
behalf and stead to execute and file any such applications and to do all other
lawfully permitted acts to further the prosecution and issuance of letters
patent or trademark, copyright or other registrations thereon with the same
legal force and effect as if executed by Executive.

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Exhibit 10.1

  Section 4.03 Non-solicitation of Employees.

     (a) During Executive’s employment with the Company and for the periods set
forth below after the termination of his employment with Company for any reason
whatsoever, Executive shall not, directly or indirectly, without the Company’s
prior written consent, and at the Company’s sole and absolute discretion: (i)
for a period of one (1) year after such termination, on his own behalf or in the
service or on behalf of others, solicit, encourage, recruit or attempt to
persuade any person to terminate such person’s employment with the Company,
whether or not such person is a full-time employee or whether or not such
employment is pursuant to a written agreement or is at-will.

     (b) Executive acknowledges and agrees that the Company shall have the
right, in addition to any other rights either may have under applicable law, to
obtain from any court of competent jurisdiction preliminary and permanent
injunctive relief to restrain any breach or threatened breach of, or otherwise
to specifically enforce any such covenant or any other obligations of Executive
under Article IV of this Agreement, as well as to obtain damages and an
equitable accounting of all earnings, profits and other benefits arising from
such violation, which rights shall be cumulative and in addition to any other
rights or remedies to which the Company may be entitled.

     (c) If the period of time or scope of any restriction set forth in this
Agreement should be adjudged unreasonable in any proceeding, then the period of
time shall be reduced by such number of months or the scope of the restriction
shall be modified, or both, by a court of competent jurisdiction so that such
restrictions may be enforceable for such time and in the manner to the fullest
extent adjudged to be reasonable.

     Section 4.04 Returning Company Documents and Property. During the period of
Executive’s employment and thereafter, Executive shall not remove from Company’s
offices or premises any documents, records, notebooks, files, correspondence,
reports, memoranda, computer tapes, computer disks or similar materials of or
containing Company Confidential Information, or other materials or property of
any kind, unless necessary in accordance with Executive’s duties and
responsibilities of employment, and in the event that any of such material or
property is removed, Executive shall return all of the foregoing to their proper
files or places of safekeeping as promptly as possible after the removal shall
have served its specific purpose; nor shall Executive make, retain, remove or
distribute any copies of any of the foregoing for any reason whatsoever, except
as may be necessary in the discharge of Executive’s assigned duties; and upon
the termination of Executive’s employment with Company, Executive shall return
to Company all originals, copies and extracts of the foregoing, then in
Executive’s possession or under Executive’s direct or indirect control, and
shall delete or destroy any of the foregoing in Executive’s possession or under
Executive’s direct or indirect control stored on magnetic or other media or on
any information storage or retrieval device, whether prepared by Executive or by
others. In the event Company provides Executive with any equipment, including
but not limited to a laptop computer or other computer hardware, such property
shall at all times remain the property of Company and Executive shall promptly
return any such property to Company upon termination of Executive’s employment
with Company. Executive agrees that, at the time of leaving the employ of the
Company, or earlier upon request, he shall deliver to the Company (and will not
keep in his possession or control or deliver to anyone else) any and all
records, data, notes, reports, information, proposals, lists, correspondence,
e-mails, specifications, drawings, blueprints, sketches, materials, other
documents (including, but not limited to, on computer discs or drives) of any
aforementioned items either developed by Executive pursuant to his employment
with the Company or otherwise relating to the business of the Company, retaining
neither copies nor excerpts thereof. Executive also agrees that, at the time of
leaving the employ of the Company, or earlier upon request, he shall deliver to
the Company all Company property in his possession, including cell phones,
computers, computer discs, drives and other equipment.

ARTICLE V Arbitration.

     Section 5.01 Arbitration. In order to obtain the many benefits of
arbitration over court proceedings, including speed of resolution, lower costs
and fees and more flexible rules of evidence, all disputes (except those
relating to unemployment compensation or workers compensation, and except as
provided in Section 5.02 below) arising out of Executive’s employment or
concerning the interpretation or application of this Agreement or its subject
matter (including without limitation those relating to workplace discrimination
and/or harassment on any basis, whatsoever, including but not limited to age,
race, sex, religion, national origin, disability or perceived

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Exhibit 10.1

disability, as well as any claimed violation of any federal, state or local law,
regulation or ordinance, such as Title VII of the Civil Rights Act, the Age
Discrimination in Employment Act, the Americans with Disabilities Act and their
state and local counterparts, if any, including but not limited to any claims of
retaliation thereunder) shall be resolved exclusively by binding arbitration at
a location in reasonable proximity to Executive’s last place of employment with
the Company, pursuant to the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association. The parties expressly waive
their rights to have any such claim resolved by jury trial. The Company shall
bear the cost of the Arbitrator’s fee. The Company shall initially bear its
filing fees, as well as Executive’s filing fees in excess of $75.00 upon
Executive’s written request to the Company’s Board. Arbitration must be demanded
within three hundred (300) days of the time when the demanding party knows or
should know of the events giving rise to the claim. The decision of the
Arbitrator shall be in writing and set forth the findings and conclusions upon
which the decision is based. Notwithstanding the foregoing, the requirement to
arbitrate does not apply to the filing of a claim with a federal, state or local
administrative agency. The decision of the Arbitrator shall be final and binding
and may be enforced under the terms of the Federal Arbitration Act (9 U.S.C.
Section 1 et seq.). Judgment upon the award may be entered, confirmed and
enforced in any federal or state court of competent jurisdiction.

     Section 5.02 Equitable Remedies. Executive agrees that if he breaches or
threatens to breach any of the obligations set forth in Article IV, the Company
will have available, in addition to any other right or remedy available, the
right to obtain injunctive and equitable relief of any type from a court of
competent jurisdiction, including but not limited to restraining such breach or
threatened breach and to specific performance of any such provision of this
Agreement. Executive may seek declaratory judgment or other equitable relief
with respect to Article IV from a court of competent judgment.

ARTICLE VI Miscellaneous

     Section 6.01 Notices. All notices, requests or other communications
provided for in this Agreement shall be made, if to the Company, to the
Secretary of the Company at the Company’s principal executive office, and if to
Executive, to his address on the books of the Company (or to such other address
as the Company or Executive may give to the other for purposes of notice
hereunder). Copies of all notices given to Executive shall be sent to such
person as Executive may designate by written notice to the Company. All notices,
requests or other communications required or permitted by this Agreement shall
be made in writing either (a) by personal delivery to the party entitled
thereto, (b) by mailing via certified mail, postage prepaid, return receipt
requested, in the United States mails to the last known address of the party
entitled thereto, (c) by reputable overnight courier service, or (d) by
facsimile with confirmation of receipt. The notice, request or other
communication shall be deemed to be received upon actual receipt by the party
entitled thereto; provided, however, that if a notice, request or other
communication is not received during regular business hours, it shall be deemed
to be received on the next succeeding business day of the Company.

     Section 6.02 Assignment and Succession. The Company may assign this
Agreement in connection with any sale or merger (whether a sale or merger of
stock or assets or otherwise) of the Company or the business of the Company.
Executive expressly consents to the assignment of the Agreement, including, but
not limited to the restrictions which apply subsequent to the termination of
Executive’s employment, to any new owner of the Company’s business or purchaser
of the Company. Executive’s rights and obligations hereunder are personal and
may not be assigned, provided, however, in the event of the Executive’s death or
permanent disability, the Executive’s representative may exercise any
unexercised Options, and any benefits accrued to the date of death or permanent
disability, if any, to the extent permitted by the relevant Option plan
agreement or this Agreement. This Agreement shall inure to the benefit of and be
enforceable by Executive’s heirs, beneficiaries and/or legal representatives.

     Section 6.03 Headings. The Article, Section, paragraph and subparagraph
headings in this Agreement are for convenience of reference only and shall not
define or limit the provisions hereof.

     Section 6.04 Invalidity. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality or enforceability of the remaining provisions hereof shall not in any
way be affected or impaired

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Exhibit 10.1

     Section 6.05 Waivers. No omission or delay by either party hereto in
exercising any right, power or privilege hereunder shall impair such right,
power or privilege, nor shall any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof~ or the exercise of
any other right, power or privilege.

     Section 6.06 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

     Section 6.07 Entire Agreement. Except as otherwise provided or referred to
herein, this Agreement[, together with the Employee Nondisclosure, Developments
and Nonsolicitation Agreement previously signed by Executive,] contains the
entire understanding of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, including but not limited
to the Prior Agreement. This Agreement may not be amended, except by a written
instrument hereafter signed by each party hereto.

     Section 6.08 Interpretation. The parties hereto acknowledge and agree that
each party and its or his counsel reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its drafting.

Accordingly, (a) the rules of construction to the effect that any ambiguities
are resolved against the drafting party shall not be employed in the
interpretation of this Agreement, and (b) the terms and provisions of this
Agreement shall be construed fairly as to all parties hereto and not in favor of
or against any party regardless of which party was generally responsible for the
preparation of this Agreement. Except where the context requires otherwise, all
references herein to Sections, paragraphs and clauses shall be deemed to be
reference to Sections, paragraphs and clauses of this Agreement. The words
“include”, “including” and “includes” shall be deemed in each case to be
followed by the phrase “without limitation.” The words “hereof”, “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.

     Section 6.09 Governing Law. This Agreement and the performance hereof shall
be construed and governed in accordance with the internal laws of the State of
California without reference to principles of conflict of laws. Any court action
instituted by Executive or on his behalf relating in any way to this Agreement
or his employment with the Company shall be filed exclusively in federal or
state court in the County of Santa Clara, California and he consents to the
jurisdiction and venue of these courts in any action instituted by the Company
against him.

     Section 6.10 Indemnification. In addition to any additional benefits
provided under applicable state law to Executive as a director and officer of
the Company, Executive shall be entitled to the benefits of: (a) those
provisions of the Restated Articles of Incorporation and By-Laws of the Company,
as amended, which provide for indemnification of directors and officers of the
Company (and no such provision shall be amended in any way to limit or reduce
the extent of indemnification available to Executive as a director or officer of
the Company), and (b) any Indemnification Agreement between the Company and
Executive. The rights of Executive under such indemnification obligations shall
survive the termination of this Agreement and be applicable for so long as
Executive may be subject to any claim, demand, liability, cost or expense, which
the indemnification obligations referred to in this Section are intended to
protect and indemnify him against.

     The Company shall, at no cost to Executive, use its best efforts to at all
times include Executive, during the term of Executive’s employment hereunder and
for so long thereafter as Executive may be subject to any such claim, as an
insured under any directors’ and officers’ liability insurance policy maintained
by the Company, which policy shall provide such coverage in such amounts as the
Board shall deem appropriate for coverage of all directors and officers of the
Company.

     Section 6.11 Severability. If any provision of this Agreement or
application thereof to anyone or under any circumstances is adjudicated to be
invalid or unenforceable by an arbitrator or court of competent jurisdiction,
such invalidity or unenforceability shall not affect any other provision or
application of this Agreement which can be given effect without the invalid or
unenforceable provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction.

     Section 6.12 Executive Acknowledgement. Executive acknowledges and agrees
(i) that he has had the opportunity to consult with independent counsel of his
own choice concerning this Agreement and has been advised to do so by the
Company, and (ii) that he has read and understands the Agreement, is fully aware
of its legal effect, and has entered into it freely based on his own judgment.

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Exhibit 10.1

     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its duly authorized officer and the Executive has signed this Agreement as of
the day and year first above written.

DAYSTAR TECHNOLOGIES, INC.    EXECUTIVE:    By: \s\ Peter A. Lacey    By: \s\
Magnus Ryde  Name: Peter A. Lacey    Name: Magnus Ryde  Title: Chairman     
Date: February 15, 2010    Date: February 15, 2010 

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Exhibit 10.1

EXHIBIT A

- Equity Compensation Award.

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