Item 1.01 Entry into a Material Definitive Agreement.

On July 15, 2009, DayStar Technologies, Inc. (the "Company") and Veeco Compound Semiconductor, Inc. ("Veeco") entered into a series of transactions whereby
(i) pursuant to an Asset Purchase Agreement, the Company sold substantially all of the Company's tangible assets located at the Company's Halfmoon, New York facility (the "Halfmoon Facility") to Veeco; (ii) pursuant to a License Agreement, the Company has licensed certain non-core intellectual property to Veeco that is contemplated to further Veeco's copper indium gallium diselenide ("CIGS") co-evaporation equipment offerings; (iii) Veeco has assumed the real property leases associated with the Company's Halfmoon Facility; and (iv) Veeco will hire eighteen former employees of the Company located at the Company's Halfmoon Facility, subject to the acceptance by the employees of Veeco's offers of employment. In connection with the transactions, Veeco paid the Company $2 million, with $1.7 million payable in cash at closing and $300,000 to be held in escrow for a six month period for indemnification claims.

The Asset Purchase Agreement contains representations, warranties, agreements and other provisions that are customary for this type of transaction.

The License Agreement involves (1) a limited exclusive license of the Company's CIGS on foil know-how, trade secrets and patents; and (2) the non-exclusive license of certain balance of cell know-how, trade secrets and patents maintained by the Company. Balance of cell is used to refer to the other layers in the manufacture of CIGS solar cell, including the back contact and transparent conducting oxide layers. None of the intellectual property licensed by the Company to Veeco under the License Agreement relates to the Company's core technology, the creation of the critical CIGS layer using reactive sputter, which remains exclusively owned by the Company.

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