Executive Incentive, Change of Control Retention and Severance Agreement

This Executive Incentive, Change of Control Retention and Severance Agreement (the " Agreement ") is made and entered into as of August 19, 2008 (the " Effective Date "), by and between Solar Enertech Corp. ( “Company”) and Leo S. Young (the " Executive "). Capitalized terms used in this Agreement shall have the meanings set forth in Section 5 below.

1.   Purpose . The purpose of this Agreement is to encourage Executive to remain in the employ of the Company and to continue to devote Executive's full attention to the success of the Company including in the event of a Change of Control, as such term is defined in Section 5 of this Agreement.

2.   Compensation  

2.1 Base Salary . The Company plans to increase base salary for the Executive in relation to improvements in the operating and financial performance of the Company consistent with the forecasts and plans agreed upon between the Board of Directors and the Executive. For the Fiscal Year 2009, contingent on achievement of certain operating and financial metrics to be agreed upon between the Board of Directors and the Executive, the base salary is planned to increase as follows:

Current base salary: $200,000 per annum

January 2009 base salary: $250,000 per annum

For the Fiscal Year 2010, assuming fiscal 2009 performance metrics were met and contingent on achievement of certain operating and financial metrics to be agreed upon between the Board of Directors and the Executive, the base salary is planned to increase as follows:

January 2010 base salary: $300,000 per annum

In the event fiscal 2009 performance metrics are not met, the parties agree to revisit appropriate adjustments to this Section 2.1.

2.2 Stock Options . Contingent on achievement of certain operating and financial metrics to be agreed upon between the Board of Directors and the Executive, the Company plans to award (subject to Board approval) options to purchase up to 1.5 million shares of the Company’s common stock to Executive.  Any grants shall become fully vested twelve (12) months after the date of grant if the Executive is currently employed by the Company. The exercise price shall be equal to the market price of the Company’s common stock on the date of the grant and shall be exercisable until the earlier of (a) the third (3 ^rd ) anniversary of the date of vesting and (b) sixty (60) days from the date at which the Executive ceases to be employed by the Company.

2.3 Personal Travel to USA . The Company will provide 2 weeks of paid vacation for each 6 month period of employment under this Agreement and the Company will pay for round trip business class airfare to/from China and the United States for the either the Executive or his spouse.

3.   Severance for reasons other than Cause . In the event of Executive’s involuntary severance from service for reasons other than Cause, or due to the event of a Diminution of Responsibilities, then, provided that Executive complies with Section 7 below prior to the forty-fifth (45 ^th ) day following such termination, Executive shall receive a lump sum cash payment in an amount equal to eighteen (18) months of Executive's then effective base salary (less applicable withholding), paid on the first payroll date which is forty-five (45) days after the date of termination.

4.   Termination Upon Change of Control . The provisions set forth in this Section 4 shall apply in lieu of those in Section 3 in the event of the Executive’s Termination Upon a Change of Control. In the event of Executive's Termination Upon a Change of Control, Executive shall receive the following payments and benefits:

4.1 Accrued Salary and Vacation, and Benefits . Executive shall receive all salary and accrued vacation (less applicable withholding) earned through Executive's termination date, and the benefits, if any, under Company benefit plans to which Executive may be entitled pursuant to the terms of such plans.

4.2 Stock Award Acceleration . Provided that Executive complies with Section 7 below, all outstanding stock options granted and restricted stock issued by the Company to Executive prior to the Change of Control shall become fully vested and exercisable immediately prior to the effective date of the Termination Upon a Change of Control.

4.3 Cash Severance Payment . Provided that Executive complies with Section 7 below prior to the forty-fifth (45 ^th ) day following such termination, Executive shall receive a lump sum cash payment in an amount equal to eighteen (18) months of Executive's then effective base salary (less applicable withholding), paid on the first payroll date which is forty-five (45) days after the date of termination.

5.   Definitions .   Capitalized terms used in this Agreement shall have the meanings set forth in this Section 5.

5.1 " Cause " means Executive's (a) failure to perform any reasonable and lawful duty of Executive's position or failure to follow the lawful written directions of the Board of Directors; (b) commission of an act that constitutes misconduct and is injurious to the Company or any subsidiary; (c) conviction of, or pleading "guilty" or "no contest" to, a felony under the laws of the United States or any state thereof; (d) committing an act of fraud against, or the misappropriation of property belonging to, the Company or any subsidiary; (e) commission of an act of dishonesty in connection with Executive's responsibilities as an employee and affecting the business or affairs of the Company; (f) material breach of any confidentiality, proprietary information or other agreement between Executive and the Company or any subsidiary; or (g) failure or refusal to carry out the reasonable directives of the Board of Directors.

5.2 " Change of Control " means (a) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the " Exchange Act ")), other than a trustee or