Form of Escrow Agreement

Exhibit 10.19

FORM OF ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this " Agreement" ), dated as of this 25 th day of May, 2006, is by, between and among Castlerigg Master Investments Ltd. (the " Investor" ), a British Virgin Islands company, DayStar Technologies, Inc. (the " Company" ), a corporation organized under the laws of the State of Delaware, and KeyBank National Association (the " Escrow Agent" ), a national bank organized under the laws of the United States. The Investor, the Company and the Escrow Agent are sometimes individually referred to herein as a " Party" and collectively as the " Parties" . WHEREAS , as of the date hereof, the Investor and the Company entered into a securities purchase agreement (the " Purchase Agreement" ) pursuant to which the Investor agreed to purchase from the Company and the Company agreed to issue to the Investor the Securities (as defined in the Purchase Agreement), including a Senior Convertible Note (the " Note" ) in the aggregate principal amount of $15,000,000 (capitalized terms used in this Agreement, if not otherwise defined, shall have the meanings ascribed to them in the Note);

WHEREAS , pursuant to Section 15(e) of the Note, the Company and the Investor have agreed that, if, at any time following the issuance date of the Note, the Closing Sale Price of the Company' s Common Stock is less than $9.00 (subject to adjustment for stock splits, combinations and like events) for ten (10) consecutive Trading Days, the Company shall promptly, and in any event no later than the next Trading Day, deposit into an escrow account immediately available funds equal to thirty percent (30%) of the then outstanding Principal of the Note, provided that , in no event shall the amount deposited exceed Three Million Dollars ($3,000,000) (the " Escrow Deposit" );

WHEREAS , the Escrow Agent is willing to hold and administer the Escrow Deposit and any earnings thereon (together with the Escrow Deposit, the " Escrowed Funds" ) in escrow in accordance with the terms of this Agreement and the Note; and

WHEREAS , the Investor, the Company and the Escrow Agent have executed this Agreement to evidence their understanding concerning the escrow arrangement.

NOW THEREFORE , in consideration of the mutual promises set forth herein, and subject to the terms and conditions hereof, the Parties agree as follows: 1. Escrow Deposit .

(a) If, at any time following the issuance date of the Note, the Closing Sale Price of the Company' s Common Stock is less than $9.00 (subject to adjustment for stock splits, combinations and like events) for ten (10) consecutive Trading Days, the Company shall promptly,


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and in any event no later than the next Trading Day, deposit (by wire transfer or delivery of immediately available funds) the Escrow Deposit with the Escrow Agent; provided , however , that in no event shall the Escrow Deposit exceed Three Million Dollars ($3,000,000).

(b) The Escrow Agent agrees to hold and administer the Escrowed Funds in an interest bearing account identified on Annex A hereto (the " Escrow Account" ) upon the terms and conditions set forth in this Agreement. 2. Escrow Terms . Subject to Section 3 hereof, the Escrow Agent shall apply, administer and release the Escrowed Funds as follows:

(a) Upon receipt by the Escrow Agent of a notice (a " Demand Notice" ), given by the Company, stating that the Company is entitled to receipt of the Escrowed Funds, or any portion thereof, in accordance with Section 15(e) of the Note, and stating with specificity the reasons therefor and the applicable clause in Section 15(e) of the Note, and the amount of Escrowed Funds to which the Company is entitled, together with documentary evidence thereof, the Escrow Agent shall promptly give a copy of the Demand Notice to the Investor. If the Escrow Agent does not receive, within ten (10) Business Days after giving the copy of the Demand Notice to the Investor, a written objection (an " Objection" ) from the Investor, or if the Escrow Agent shall receive within such period receive a written consent of the Investor to the release requested in the Demand Notice, then the Escrow Agent shall deliver the Escrowed Funds, or such portion thereof specified in the applicable Demand Notice, in accordance with such Demand Notice. If the Escrow Agent receives an Objection within such ten (10) Business Day period, then the Escrow Agent shall continue to hold the Escrowed Funds until otherwise authorized and directed pursuant to clauses (b) and (c) of this Section 2 below. (b) Upon receipt by the Escrow Agent of a joint written instruction given by the Company and the Investor (the " Joint Instructions" ), in which event the Escrow Agent shall deliver the Escrowed Funds (or such portion thereof) in accordance with the terms of, and in the amount specified in, the Joint Instructions. (c) Upon receipt by the Escrow Agent of a final and non-appealable judgment, order, decree or award of a federal or state court (a " Court Order" ), in which event the Escrow Agent shall deliver the Escrowed Funds (or such port ...