**Exhibit 10.1**

Lampe, Conway & Co., LLC 

LC Capital Master Fund, Ltd. 

680 Fifth Avenue, Suite 1202 

New York, NY10019 

July 31, 2007 

DAYSTARTECHNOLOGIES, INC. 

13 Corporate Drive 

Halfmoon, NY 12065

Attn: Stephan DeLuca, Chief Executive Officer 

 

Ladies and Gentlemen: 

Reference is hereby made to that certain Loan Agreement, dated as of June 15, 2007 (as amended andmodified from time to time, the “Loan Agreement”), by and among the DayStar Technologies, Inc. (the “Company”), LC Capital Master Fund, Ltd. (together with its successor and assigns, the “Holders”)and Lampe, Conway & Co., LLC, as the agent and collateral agent for the Holders (in such capacities, together with its successors and assigns, the “Agent”). Initially capitalized terms used herein but not specificallydefined herein shall have the meanings ascribed to them in the Loan Agreement. 

The Company has requested that the Holders extend thedeadline for consummating the Transaction under Section 6.2 of the Loan Agreement (such deadline, the “Transaction Deadline”) from July 31, 2007 to September 14, 2007 (such later date, the “ExtensionDate”). The Agent and the Holders party hereto (who represent the Majority Holders) hereby agree to extend the Transaction Deadline to the Extension Date; *provided* that, notwithstanding the provisions of Section 6.1 of the LoanAgreement, failure to consummate the Transaction (or a similar equity financing) on or before the Extension Date, whereby the Company shall have raised Transaction Proceeds of not less than $25,000,000, shall immediately (without any cure period)constitute an Event of Default under the Loan Agreement. The Holders party hereto (who represent the Majority Holders) expressly agree that the failure of the Company to consummate the Transaction by July 31, 2007 shall not be deemed a defaultor an Event of Default under Section 6.1 of the Agreement. 

The extension of the Transaction Deadline granted herein is limited to thespecifics hereof, shall not apply with respect to any default or Event of Default, or any other facts or occurrences other than those on which the same are based, shall not excuse future non-compliance with the Loan Agreement, shall not be apractical construction, course of conduct or course of performance under the Loan Agreement, and, except as expressly set forth herein, shall not operate as a waiver or an amendment of any right, power, or remedy of Agent, nor as a consent to orwaiver of any further or other matter, under the Loan Documents. The Company hereby acknowledges and reaffirms (i) all of their obligations and duties under the Loan Documents, and (ii) that the Agent, for the ratable benefit of theHolders, has and shall continue to have valid, secured, Liens in the Collateral. 

This letter may be executed in any number of counterpartsand by different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of this letterby telefacsimile shall be equally as effective as delivery of an original executed counterpart of this letter. 

 

This letter shall be governed by the laws of the state of New York applicable to contracts made and to beperformed in the state of New York. 

Very truly yours, 

**LAMPE, CONWAY & CO., LLC**, 

as Agent 

By:  /s/ Richard F.Conway                                    

Name: Richard F. Conway 

Title: 

**LC CAPITAL MASTER FUND, LTD,**

as a Holder 

By:  /s/ Richard F.Conway                                     

Name: Richard F. Conway 

Title: 

 

**ACKNOWLEDGED AND ACCEPTED:**

**DAYSTAR TECHNOLOGIES, INC.**, 

as the Company 

By:     /s/ StephenDeLuca                        

Name: Stephen DeLuca 

Title: Chief Executive Officer