STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of August
19, 2008 among Solar Enertech Corp. (the “Company”) and China New EnerTech,
Inc., a company incorporated in the Cayman Islands (the “Cayman Co.”), and
solely with respect to Section 4.8, Solar Enertech (Shanghai) Co., Ltd., and
solely with respect Sections 4.9 through 4.12 hereof, Leo S. Young.
 
RECITALS

A. The Company and Solar Enertech (Shanghai) Co., Ltd. (formerly Infotech
(Shanghai) Solar Technologies Ltd.) (“Agent”) are party to an Agency Agreement
dated effective as of the 10th day of April, 2006 (the “Agency Agreement”)
pursuant to which Agent performs certain services, including securing factory
space, employees, inventory, equipment and other goods or services, for the
benefit of the Company.

B. Due to the agency relationship between the Company and Agent, the Company
consolidates the financial statements of Agent with its financial statements
pursuant to FASB Interpretation No. 46(R).

C. Cayman Co. is the parent holding company owning all of the outstanding
ownership interest in InfoTech Hong Kong New Energy Technologies, Limited (“HK
Co.”), which owns all of the outstanding ownership interest in Agent.

D. The Company desires to acquire Agent and any related operations of HK Co. for
consolidation into its business.

AGREEMENT

In consideration of the mutual covenants and conditions contained herein, it is
hereby agreed by and among the parties hereto as follows:
 
SECTION 1
PURCHASE AND CLOSING

1.1 Purchase. In exchange for an aggregate purchase price of one dollar (USD
$1.00), upon the Closing (as defined), Cayman Co. sells all of its right, title
and interest in HK Co. to the Company.
 
1.2 Closing. The closing of the sale of all of the outstanding shares of HK Co.
by Cayman Co. to the Company is effective upon the exchange of the closing
deliverables set forth in Section 1.3 below. The closing referred to in this
Section 1.2 shall be hereinafter referred to as the “Closing”.
 
1.3 Closing Deliverables.
 
(a) At the Closing, the Company shall deliver to the Cayman Co. the aggregate
purchase price of one dollar (USD $1.00).
 
(b) At the Closing, the Cayman Co. shall deliver to the Company the share
certificate representing 10,000 shares of HK Co., constituting all of its
outstanding shares.
 
 
 

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SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company hereby represents and warrants to Cayman Co. that the statements in
the following paragraphs of this Section 2 are true and correct as of the date
of this Agreement and as of the Closing:
 
2.1 Authorization. All corporate action on the part of the Company, its
directors and shareholders necessary for the authorization, execution, delivery
and performance of this Agreement by the Company and the performance of the
Company’s obligations hereunder has been taken.
 
2.2 Corporate Power. The Company has all requisite corporate power necessary for
the authorization, execution and delivery of this Agreement. This Agreement is
the valid and binding obligations of the Company, enforceable in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, usury and other laws of
general application affecting the enforcement of creditors’ rights.
 
SECTION 3
REPRESENTATIONS AND WARRANTIES OF CAYMAN CO.
 
Cayman Co. hereby represents and warrants to the Company that the statements in
the following paragraphs of this Section 3 are true and correct as of the date
of this Agreement and as of the Closing:
 
3.1 Organization of the Cayman Co. and Affiliates
 
(a) Cayman Co. is a corporation duly incorporated, validly existing and in good
standing under the laws of the Cayman Islands. HK Co. is a corporation duly
incorporated, validly existing and in good standing under the laws of Hong Kong.
Agent Cayman is a corporation duly incorporated, validly existing and in good
standing under the laws of the People’s Republic of China. Cayman Co., HK Co.
and Agent are collectively referred to as the “Cayman Entities”.
 
(b)  The share capital of HK Co. is HKD$10,000.00, par value $1.00 per share, of
which 10,000 shares are issued and outstanding, all of which are held by Cayman
Co. HK Co. owns all of the outstanding equity of Agent.
 
(c) There are no agreements, arrangements, options, warrants, calls, rights or
commitments of any character to which the Cayman Entities are a party relating
to the issuance, sale, purchase or redemption of any common stock or other
equity interest of HK Co. or Agent, whether on conversion of other securities or
otherwise. None of the issued and outstanding equity interests of HK Co. or
Agent have been issued in violation of, or is subject to, any preemptive or
subscription rights. The Cayman Entities are not party to any stockholder or
members agreement, voting trust agreement or any other similar contract,
agreement, arrangement, commitment, plan or understanding restricting or
otherwise relating to the voting, dividend, ownership or transfer rights of any
common stock or other equity interest of HK Co. or Agent.
 
3.2 Authorization. All corporate action on the part of Cayman Co., its directors
and shareholders necessary for the authorization, execution, delivery and
performance of this Agreement by Cayman Co. and the performance of its
obligations hereunder has been taken prior to the date hereof.
 
3.3 Corporate Power. Cayman Co. has all requisite corporate power necessary for
the authorization, execution and delivery of this Agreement. This Agreement is
the valid and binding obligations of Cayman Co., enforceable in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, usury and other laws of
general application affecting the enforcement of creditors’ rights.
 
 
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3.4 Ownership of the Business. Other than HK Co. or Agent, there are no other
entities or business, including Infotech Essentials, Inc., owned directly or
indirectly, in whole or in part, by Cayman Co. or its officers, directors or
shareholders which are engaged in the business of manufacturing photovoltaic
solar energy cells and solar applications or which utilize any equipment,
intellectual property, inventory, employees or other resources or assets used in
the business as conducted or currently proposed to be conducted by HK Co. or
Agent. Cayman Co. has no assets or operations and its sole purpose has been to
serve as a holding company for the HK Co. shares.
 
3.5 Financial Statements. The Cayman Entities have provided to the Company all
of their financial records since inception.
 
3.6 No Undisclosed Liabilities. HK Co. and Agent are not subject to any
liability (including, without limitation, unasserted claims, whether known or
unknown), whether absolute, contingent, accrued or otherwise, which is not shown
or which is in excess of amounts shown or reserved for in the financial records
of the Cayman Entities other than in the ordinary course of business.
 
3.7 Disclosure. No representation or warranty by Cayman Co. in this Agreement,
when taken together, contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements made herein and
therein, in the light of the circumstances under which they were made, not
misleading.
 
 
SECTION 4
MISCELLANEOUS
 
4.1 No Finders Fee. Each party represents that it neither is nor will be
obligated for any finder’s or broker’s fee or commission in connection with this
transaction.
 
4.2 Governing Law. This Agreement shall be governed in all respects by the
internal laws of the State of California, without reference to principles of
conflict of laws or choice of law.
 
4.3 Survival. The representations, warranties, covenants and agreements made
herein shall survive the execution and delivery of this Agreement and the
Closing.
 
4.4 Successors and Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.
 
4.5 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
 
4.6 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision(s) shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision(s) were so excluded and shall be enforceable in accordance with its
terms.
 
 
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4.7 Expenses. The Company shall bear all reasonable costs and expenses in
connection with the negotiation, execution, delivery and performance of this
Agreement.
 
4.8 Termination of Agency Agreement. Pursuant to Section 4.02 of the Agency
Agreement, the Company hereby terminates the Agency Agreement effective as of
the Closing.
 
4.9 Termination of Management Agreement. The Company and Mr. Young hereby agree
to terminate that certain Management Agreement dated March 1, 2006, by and
between the Company and Mr. Young effective as of the date the Closing.
 
4.10 Executive Incentive, Change of Control Retention and Severance Agreement.
The Company and Mr. Young hereby agree to enter into an Executive Incentive,
Change of Control Retention and Severance Agreement effective as of the date the
Closing in the form attached hereto as Exhibit A.
 
4.11 Indemnification. The Company agrees to indemnify, defend and hold harmless
Mr. Young up to an amount not to exceed US$1,000,000 for any liabilities he may
incur as a result of actions relating to the grant of his original stock option
from Ms. Blanchard for 36 million shares of common stock of the Company, his
exercise of the option with respect to 5 million shares of common stock and his
transfer of 5.75 million shares of common stock to other members of Agent which
he exercised on their behalf as nominee of such members. For purposes of
clarity, the foregoing indemnity is not intended to reimburse Mr. Young for any
taxes previously paid by Mr. Young as a result of the exercise of his original
stock option.
 
4.12 Legal Fees. The Company shall reimburse Mr. Young for his legal fees and
reasonable other professional expenses incurred in connection with the
transactions contemplated hereby, up to a maximium of US$5,000 in the aggregate.

 
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IN WITNESS WHEREOF, the parties hereto have executed this Stock Exchange
Agreement as of the date first set forth above.
 

SOLAR ENERTECH CORP.

By: /s/ MING WAI ANTHEA CHUNG
Name: Ming Wai Anthea Chung
Title: Chief Financial Officer

CHINA NEW ENERTECH, INC.

By: /s/ LEO S. YOUNG
Name:
Title:

With respect to Section 4.8 only:

SOLAR ENERTECH (SHANGHAI) CO., LTD.

By: /s/ LEO S. YOUNG
Name:
Title:

With respect to Section 4.9 through 4.12 only:

/s/ LEO S. YOUNG
LEO S. YOUNG

 
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EXHIBIT A

Executive Incentive, Change of Control Retention and Severance Agreement
 
 
 
 

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