Exhibit 10.1

AMENDMENT NO. 2 TO

STRATEGIC PARTNERSHIP AGREEMENT

THIS AMENDMENT NO. 2 TO STRATEGIC PARTNERSHIP AGREEMENT is entered into and effective as of the 5 ^th of December, 2005 by and among MathStar, Inc., a Delaware corporation (“MathStar”); Valley Technologies, Inc., a Pennsylvania corporation (“VTI”); and, for purposes of only the amendment to Section 3.1.2 below, Gerald Petrole, the President and Chief Executive Officer of VTI (“Petrole”).

RECITALS

WHEREAS, MathStar, VTI and Petrole entered into a Strategic Partnership Agreement dated as of October 8, 2004 (the “Original Agreement”) for the purpose of having VTI develop and support products, algorithms and applications for MathStar’s FPOAs;

WHEREAS, effective on June 10, 2005, MathStar’s board of directors and shareholders approved a three-for-one reverse stock split of the MathStar Common Stock (the “Stock Split”);

WHEREAS, MathStar and VTI amended Section 3.1.1 of the Original Agreement pursuant to Amendment No. 1 to Strategic Partnership Agreement dated August 11, 2005 (“Amendment No. 1”) (the Original Agreement, as amended by Amendment No. 1, is hereinafter referred to as the “Agreement”);

WHEREAS, as provided in Section 3.1.2 of the Agreement, upon execution of the Original Agreement, MathStar granted to Petrole warrants to purchase a total of eighty-three thousand three hundred thirty-four (83,334) shares of MathStar Common Stock at an