Exhibit 10.1
INDEMNITY AGREEMENT
This Indemnity Agreement, dated as of
[ ] [ ],
2007, is made by and between Solar Enertech Corp., a Nevada
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
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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.
G. Section 78.7502, 78.751,
and 78.752 of the Nevada Revised Statutes (the “
Indemnification Sections ”) 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, partnerships, joint ventures or trusts, and expressly
provides that the indemnification provided by the Indemnification
Sections 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” 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, manager, employee
or agent of another foreign or domestic corporation, partnership,
joint venture, limited liability company, trust or other
enterprise.
(b)
Expenses and Liabilities . For purposes of this Agreement,
“expenses” shall 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, resolution or appeal of a proceeding or
establishing or enforcing a right to indemnification under this
Agreement or the Indemnification Sections or otherwise; and
“liabilities” shall include any judgments, fines, ERISA
excise taxes or penalties, or amounts paid in settlement of a
proceeding. “Expenses” and “liabilities”
shall not include any expenses or liabilities in connection with
any claim made against the Indemnitee:
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(i) if
the claim is proved by final judgment in a court of law or other
final adjudication to have been based upon or attributable to the
Indemnitee’s in fact having gained any personal profit or
advantage to which he or she was not legally entitled;
(ii) if
it is proved by final judgment in a court of law or other final
adjudication that such indemnification is unlawful;
(iii) if
it is proved by final judgment in a court of law or other final
adjudication that the Indemnitee is liable pursuant to Nevada
Revised Statute 78.138;
(iv) for
a disgorgement of profits made from the purchase and sale by the
Indemnitee of securities pursuant to Section 16(b) of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), or similar provisions of any state
statutory law or common law;
(v) on
account of any liability derived from a failure of the Indemnitee
to timely file with the U.S. Securities and Exchange Commission any
reports and notices under Sections 13 or 16(a) of the Exchange
Act;
(vi) brought
about or contributed to by the dishonesty of the Indemnitee seeking
payment hereunder; however, notwithstanding the foregoing, the
Indemnitee shall be protected under this Agreement as to any claims
upon which suit may be brought against him or her by reason of any
alleged dishonesty on his or her part, unless a judgment or other
final adjudication thereof adverse to the Indemnitee shall
establish that he or she committed (i) acts of active and
deliberate dishonesty, (ii) with actual dishonest purpose and
intent, (iii) which acts were material to the cause of action
so adjudicated; or
(vii) for
any judgment, fine or penalty which the Company is prohibited by
applicable law from paying as indemnity or for any other
reason.
(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. Notwithstanding
the preceding sentence, D&O Insurance may not provide
protection for an Indemnitee adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be
liable for intentional misconduct, fraud or a knowing violation of
law, except with respect to the advancement of expenses or
indemnification ordered by a court.
(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, resolution or appeal of such proceeding, pro
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