SOLAR ENERTECH CORP.
 
INDEMNITY AGREEMENT
 
This Indemnity Agreement, dated as of __________________, 20__, is made by and
between Solar EnerTech Corp., a Delaware corporation (the “Company”), and
________________________________________ (the “Indemnitee”).
 
RECITALS
 
A. The Company is aware that competent and experienced persons are increasingly
reluctant to serve as directors, officers or agents of corporations unless they
are protected by comprehensive liability insurance or indemnification, due to
increased exposure to litigation costs and risks resulting from their service to
such corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors, officers and
other agents.
 
B. The statutes and judicial decisions regarding the duties of directors and
officers are often difficult to apply, ambiguous, or conflicting, and therefore
fail to provide such directors, officers and agents with adequate, reliable
knowledge of legal risks to which they are exposed or information regarding the
proper course of action to take.
 
C. Plaintiffs often seek damages in such large amounts and the costs of
litigation may be so enormous (whether or not the case is meritorious), that the
defense and/or resolution of such litigation is often beyond the personal
resources of directors, officers and other agents.
 
D. The Company believes that it is unfair for its directors, officers and agents
and the directors, officers and agents of its subsidiaries to assume the risk of
huge judgments and other expenses which may occur in cases in which the
director, officer or agent received no personal profit and in cases where the
director, officer or agent was not culpable.
 
E. The Company recognizes that the issues in controversy in litigation against a
director, officer or agent of a corporation, such as the Company or its
subsidiaries, are often related to the knowledge, motives and intent of such
director, officer or agent, that he or she is usually the only witness with
knowledge of the essential facts and exculpating circumstances regarding such
matters, and that the long period of time which usually elapses before the trial
or other disposition of such litigation often extends beyond the time that the
director, officer or agent can reasonably recall such matters and may extend
beyond the normal time for retirement for such director, officer or agent with
the result that he or she, after retirement or in the event of his or her death,
his or her spouse, heirs, executors or administrators, may be faced with limited
ability and undue hardship in maintaining an adequate defense, which may
discourage such a director, officer or agent from serving in that position.
 
F. Based upon their experience as business managers, the Board of Directors of
the Company (the “Board”) has concluded that, to retain and attract talented and
experienced individuals to serve as directors, officers and agents of the
Company and its subsidiaries and to encourage such individuals to take the
business risks necessary for the success of the Company and its subsidiaries, it
is necessary for the Company to contractually indemnify its directors, officers
and agents and the directors, officers and agents of its subsidiaries, and to
assume for itself maximum liability for expenses and damages in connection with
claims against such directors, officers and agents in connection with their
service to the Company and its subsidiaries, and has further concluded that the
failure to provide such contractual indemnification could result in great harm
to the Company and its subsidiaries and the Company’s stockholders.
 
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G. Section 145 of the General Corporation Law of Delaware, under which the
Company is organized (“Section 145”), empowers the Company to indemnify its
directors, officers, employees and agents by agreement and to indemnify persons
who serve, at the request of the Company, as the directors, officers, employees
or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive.
 
H. The Company desires and has requested the Indemnitee to serve or continue to
serve as a director, officer or agent of the Company and/or one or more
subsidiaries of the Company free from undue concern for claims for damages
arising out of or related to such services to the Company and/or one or more
subsidiaries of the Company.
 
I. Indemnitee is willing to serve, or to continue to serve, the Company and/or
one or more subsidiaries of the Company, provided that he or she is furnished
the indemnity provided for herein.
 
AGREEMENT
 
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:
 
1. Definitions.
 
(a) Agent. For the purposes of this Agreement, “agent” of the Company means any
person who is or was a director, officer, employee or other agent of the Company
or of a subsidiary of the Company; or is or was serving at the request of, for
the convenience of, or to represent the interests of the Company or a subsidiary
of the Company as a director, officer, employee or agent of another foreign or
domestic corporation, partnership, joint venture, limited liability company,
trust or other enterprise; or was a director, officer, manager, employee or
agent of a foreign or domestic corporation which was a predecessor corporation
of the Company or a subsidiary of the Company, or was a director, officer,
employee or agent of another enterprise at the request of, for the convenience
of, or to represent the interests of such predecessor corporation.
 
(b) Expenses. For purposes of this Agreement, “expenses” include all
out-of-pocket costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements), actually and
reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement or Section 145 or otherwise;
provided, however, that “expenses” shall not include any judgments, fines, ERISA
excise taxes or penalties, or amounts paid in settlement of a proceeding.
 
(c) Proceeding. For the purposes of this Agreement, “proceeding” means any
threatened, pending, or completed action, suit or other proceeding, whether
civil, criminal, administrative, or investigative.
 
(d) Subsidiary. For purposes of this Agreement, “subsidiary” means any
corporation of which more than 50% of the outstanding voting securities is owned
directly or indirectly by the Company, by the Company and one or more other
subsidiaries, or by one or more other subsidiaries.
 
2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to serve
as agent of the Company, at its will (or under separate agreement, if such
agreement exists), in the capacity Indemnitee currently serves as an agent of
the Company, so long as he or she is duly appointed or elected and qualified in
accordance with the applicable provisions of the Bylaws of the Company or any
subsidiary of the Company or until such time as he or she tenders his or her
resignation in writing; provided, however, that nothing contained in this
Agreement is intended to create any right to continued employment by Indemnitee.
 
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3. Liability Insurance.
 
(a) Maintenance of D&O Insurance. The Company hereby covenants and agrees that,
so long as the Indemnitee shall continue to serve as an agent of the Company and
thereafter so long as the Indemnitee shall be subject to any possible proceeding
by reason of the fact that the Indemnitee was an agent of the Company, the
Company, subject to Section 3(c), shall promptly obtain and maintain in full
force and effect directors’ and officers’ liability insurance (“D&O Insurance”)
in reasonable amounts from established and reputable insurers.
 
(b) Rights and Benefits. In all policies of D&O Insurance, the Indemnitee shall
be named as an insured in such a manner as to provide the Indemnitee the same
rights and benefits as are accorded to the most favorably insured of the
Company’s directors, if the Indemnitee is a director; or of the Company’s
officers, if the Indemnitee is not a director of the Company but is an officer;
or of the Company’s key employees, if the Indemnitee is not a director or
officer but is a key employee.
 
(c) Limitation on Required Maintenance of D&O Insurance. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain D&O
Insurance if the Company determines in good faith that such insurance is not
reasonably available, the premium costs for such insurance are disproportionate
to the amount of coverage provided, the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit, or the
Indemnitee is covered by similar insurance maintained by a subsidiary of the
Company.
 
4. Mandatory Indemnification. Subject to Section 9 below, the Company shall
indemnify the Indemnitee as follows:
 
(a) Third Party Actions. If the Indemnitee is a person who was or is a party or
is threatened to be made a party to any proceeding (other than an action by or
in the right of the Company) by reason of the fact that he or she is or was an
agent of the Company, or by reason of anything done or not done by him or her in
any such capacity, the Company shall indemnify the Indemnitee against any and
all expenses and liabilities of any type whatsoever (including, but not limited
to, judgments, fines, ERISA excise taxes and penalties, and amounts paid in
settlement) actually and reasonably incurred by him or her in connection with
the investigation, defense, settlement or appeal of such proceeding, provided
the Indemnitee acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Company and its
stockholders, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
 
(b) Derivative Actions. If the Indemnitee is a person who was or is a party or
is threatened to be made a party to any proceeding by or in the right of the
Company by reason of the fact that he or she is or was an agent of the Company,
or by reason of anything done or not done by him or her in any such capacity,
the Company shall indemnify the Indemnitee against all expenses actually and
reasonably incurred by him or her in connection with the investigation, defense,
settlement, or appeal of such proceeding, provided the Indemnitee acted in good
faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Company and its stockholders; except that no
indemnification under this subsection 4(b) shall be made in respect to any
claim, issue or matter as to which such person shall have been finally adjudged
to be liable to the Company by a court of competent jurisdiction unless and only
to the extent that the court in which such proceeding was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such amounts which the court shall deem proper.
 
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(c) Actions where Indemnitee is Deceased. If the Indemnitee is a person who was
or is a party or is threatened to be made a party to any proceeding by reason of
the fact that he or she is or was an agent of the Company, or by reason of
anything done or not done by him or her in any such capacity, and if prior to,
during the pendency of after completion of such proceeding Indemnitee becomes
deceased, the Company shall indemnify the Indemnitee’s heirs, executors and
administrators against any and all expenses and liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
and penalties, and amounts paid in settlement) actually and reasonably incurred
to the extent Indemnitee would have been entitled to indemnification pursuant to
Sections 4(a) or 4(b) above were Indemnitee still alive.
 
(d) Limitations. Notwithstanding the foregoing, the Company shall not be
obligated to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
and penalties, and amounts paid in settlement) for which payment is actually
made to or on behalf of Indemnitee under a valid and collectible insurance
policy of D&O Insurance, or under a valid and enforceable indemnity clause,
by-law or agreement.
 
5. Partial Indemnification. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of any
expenses or liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes and penalties, and amounts paid in
settlement) incurred by him or her in the investigation, defense, settlement or
appeal of a proceeding, but not entitled, however, to indemnification for all of
the total amount hereof, the Company shall nevertheless indemnify the Indemnitee
for such total amount except as to the portion hereof to which the Indemnitee is
not entitled.
 
6. Mandatory Advancement of Expenses. Subject to Section 9(a) below, the Company
shall advance all expenses incurred by the Indemnitee in connection with the
investigation, defense, settlement or appeal of any proceeding to which the
Indemnitee is a party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an agent of the Company. Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall be determined ultimately that the Indemnitee is not entitled to be
indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to the Indemnitee within twenty (20) days
following delivery of a written request therefor by the Indemnitee to the
Company. In the event that the Company fails to pay expenses as incurred by the
Indemnitee as required by this paragraph, Indemnitee may seek mandatory
injunctive relief from any court having jurisdiction to require the Company to
pay expenses as set forth in this paragraph. If Indemnitee seeks mandatory
injunctive relief pursuant to this paragraph, it shall not be a defense to
enforcement of the Company’s obligations set forth in this paragraph that
Indemnitee has an adequate remedy at law for damages.
 
7. Notice and Other Indemnification Procedures.
 
(a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of notice of
the commencement of or the threat of commencement of any proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with respect
thereto may be sought from the Company under this Agreement, notify the Company
of the commencement or threat of commencement thereof.
 
(b) Notice by Company. If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 7(a) hereof, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.
 
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(c) Defense. In the event the Company shall be obligated to pay the expenses of
any proceeding against the Indemnitee, the Company, if appropriate, shall be
entitled to assume the defense of such proceeding, with counsel approved by the
Indemnitee, upon the delivery to the Indemnitee of written notice of its
election so to do. After delivery of such notice, approval of such counsel by
the Indemnitee and the retention of such counsel by the Company, the Company
will not be liable to the Indemnitee under this Agreement for any fees of
counsel subsequently incurred by the Indemnitee with respect to the same
proceeding, provided that (i) the Indemnitee shall have the right to employ his
or her counsel in any such proceeding at the Indemnitee’s expense; and (ii) if
(A) the employment of counsel by the Indemnitee has been previously authorized
by the Company, (B) the Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and the Indemnitee in the
conduct of any such defense, or (C) the Company shall not, in fact, have
employed counsel to assume the defense of such proceeding, then the fees and
expenses of Indemnitee’s counsel shall be at the expense of the Company.
 
8. Determination of Right to Indemnification.
 
(a) Successful Defense. To the extent the Indemnitee has been successful on the
merits or otherwise in defense of any proceeding (including, without limitation,
an action by or in the right of the Company) to which the Indemnitee was a party
by reason of the fact that he or she is or was an agent of the Company at any
time, the Company shall indemnify the Indemnitee against all expenses of any
type whatsoever actually and reasonably incurred by him or her in connection
with the investigation, defense or appeal of such proceeding.
 
(b) Other Situations. In the event that Section 8(a) is inapplicable, the
Company shall also indemnify the Indemnitee unless, and except to the extent
that, the Company shall prove by clear and convincing evidence in a forum listed
in Section 8(c) below that the Indemnitee has not met the applicable standard of
conduct required to entitle the Indemnitee to such indemnification.
 
(c) Selection of Forum. The Indemnitee shall be entitled to select the forum in
which the validity of the Company’s claim under Section 8(b) hereof that the
Indemnitee is not entitled to indemnification will be heard from among the
following:
 
(i) A quorum of the Board consisting of directors who are not parties to the
proceeding for which indemnification is being sought;
 
(ii) The stockholders of the Company;
 
(iii) Legal counsel selected by the Indemnitee, and reasonably approved by the
Board, which counsel shall make such determination in a written opinion; or
 
(iv) A panel of three arbitrators, one of whom is selected by the Company,
another of whom is selected by the Indemnitee and the last of whom is selected
by the first two arbitrators so selected.
 
(d) Submission to Forum. As soon as practicable, and in no event later than
thirty (30) days after written notice of the Indemnitee’s choice of forum
pursuant to Section 8(c) above, the Company shall, at its own expense, submit to
the selected forum in such manner as the Indemnitee or the Indemnitee’s counsel
may reasonably request, its claim that the Indemnitee is not entitled to
indemnification; and the Company shall act in the utmost good faith to assure
the Indemnitee a complete opportunity to defend against such claim.
 
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(e) Application to Court of Chancery. Notwithstanding a determination by any
forum listed in Section 8(c) hereof that Indemnitee is not entitled to
indemnification with respect to a specific proceeding, the Indemnitee shall have
the right to apply to the Court of Chancery of Delaware, the court in which that
proceeding is or was pending or any other court of competent jurisdiction, for
the purpose of enforcing the Indemnitee’s right to indemnification pursuant to
this Agreement.
 
(f) Expenses Related to this Agreement. Notwithstanding any other provision in
this Agreement to the contrary, the Company shall indemnify the Indemnitee
against all expenses incurred by the Indemnitee in connection with any hearing
or proceeding under this Section 8 involving the Indemnitee and against all
expenses incurred by the Indemnitee in connection with any other proceeding
between the Company and the Indemnitee involving the interpretation or
enforcement of the rights of the Indemnitee under this Agreement unless a court
of competent jurisdiction finds that each of the claims and/or defenses of the
Indemnitee in any such proceeding was frivolous or made in bad faith.
 
9. Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:
 
(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to the
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by the Indemnitee and not by way of defense, unless (i) such
indemnification is expressly required to be made by law, (ii) the proceeding was
authorized by the Board, (iii) such indemnification is provided by the Company,
in its sole discretion, pursuant to the powers vested in the Company under the
General Corporation Law of Delaware or (iv) the proceeding is brought to
establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Section 145;
 
(b) Lack of Good Faith. To indemnify the Indemnitee for any expenses incurred by
the Indemnitee with respect to any proceeding instituted by the Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in such
proceeding was not made in good faith or was frivolous; or
 
(c) Unauthorized Settlements. To indemnify the Indemnitee under this Agreement
for any amounts paid in settlement of a proceeding unless the Company consents
to such settlement, which consent shall not be unreasonably withheld.
 
10. Non-exclusivity. The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnitee may have under any provision of law, the Company’s
Certificate of Incorporation or Bylaws, the vote of the Company’s stockholders
or disinterested directors, other agreements, or otherwise, both as to action in
his or her official capacity and to action in another capacity while occupying
his or her position as an agent of the Company, and the Indemnitee’s rights
hereunder shall continue after the Indemnitee has ceased acting as an agent of
the Company and shall inure to the benefit of the heirs, executors and
administrators of the Indemnitee.
 
11. Enforcement. Any right to indemnification or advances granted by this
Agreement to Indemnitee shall be enforceable by or on behalf of Indemnitee in
any court of competent jurisdiction if (i) the claim for indemnification or
advances is denied, in whole or in part, or (ii) no disposition of such claim is
made within ninety (90) days of request therefor. Indemnitee, in such
enforcement action, if successful in whole or in part, shall be entitled to be
paid also the expense of prosecuting his or her claim. It shall be a defense to
any action for which a claim for indemnification is made under this Agreement
(other than an action brought to enforce a claim for expenses pursuant to
Section 6 hereof, provided that the required undertaking has been tendered to
the Company) that Indemnitee is not entitled to indemnification because of the
limitations set forth in Sections 4 and 9 hereof. Neither the failure of the
Company (including its Board of Directors or its stockholders) to have made a
determination prior to the commencement of such enforcement action that
indemnification of Indemnitee is proper in the circumstances, nor an actual
determination by the Company (including its Board of Directors or its
stockholders) that such indemnification is improper, shall be a defense to the
action or create a presumption that Indemnitee is not entitled to
indemnification under this Agreement or otherwise.
 
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12. Subrogation. In the event the Company is obligated to make a payment under
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery under an insurance policy or any other indemnity
agreement covering the Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.
 
13. Survival of Rights.
 
(a) All agreements and obligations of the Company contained herein shall
continue during the period Indemnitee is an agent of the Company and shall
continue thereafter so long as Indemnitee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, arbitrational, administrative or investigative, by reason of the fact
that Indemnitee was serving in the capacity referred to herein.
 
(b) The Company shall require any successor to the Company (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place.
 
14. Interpretation of Agreement. It is understood that the parties hereto intend
this Agreement to be interpreted and enforced so as to provide indemnification
to the Indemnitee to the fullest extent permitted by law including those
circumstances in which indemnification would otherwise be discretionary.
 
15. Severability. If any provision or provisions of this Agreement shall be held
to be invalid, illegal or unenforceable for any reason whatsoever, (i) the
validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 14 hereof.
 
16. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.
 
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17. Notice. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
hand and receipted for by the party addressee or (ii) if mailed by certified or
registered mail with postage prepaid, on the third business day after the
mailing date. Addresses for notice to either party are as shown on the signature
page of this Agreement, or as subsequently modified by written notice.
 
18. Governing Law. This Agreement shall be governed exclusively by and construed
according to the laws of the State of Delaware as applied to contracts between
Delaware residents entered into and to be performed entirely within Delaware.
 
[Signature Page Follows]
 
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The parties hereto have entered into this Indemnity Agreement effective as of
the date first above written.
 

   SOLAR ENERTECH CORP.,    a Delaware corporation              
By:
 
   

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         INDEMNITEE        

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Signature
 
       
Name:
 
   

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Address:
 
   

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[Signature Page to Indemnity Agreement]
 
 

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