CANTON GENEVA ESCROW AGREEMENT

THIS AGREEMENT made as of the 15th day of September, 2006.

AMONG:

CHRISTIANE ERNE, of Route de Saint-Julien 129 CH-1228 Plan-les-Ouates,
Switzerland

(“Erne”)

AND:

JEAN-CHRISTOPHE HADORN, of Route de Saint-Julien 129 CH-1228 Plan-les-Ouates,
Switzerland

(“Hadorn”)

AND:

CLAUDIA REY, of Route de Saint-Julien 129 CH-1228 Plan-les-Ouates, Switzerland

(“Rey”)

AND:

SES SOLAR INC., a Nevada corporation with an address at Suite 1400 – 1500 West
Georgia Street Vancouver, British Columbia Canada V6G 2Z6

(“SES”)

AND:

SERVICE CANTONAL DE L’ENERGIE, Etat de Geneve, Departement du territoire, Rue du
Puit-Saint-Pierre 4, 1211 Geneve 3

(“CANTON”)

AND:

CLARK WILSON LLP, of 800 – 885 West Georgia Street, Vancouver, BC V6C 3H1

(the “Escrow Agent”)

 

 

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WITNESSES THAT WHEREAS:

A.                         Canton has loaned to Société D’Energie Solaire S.A.
(“Société”) the sum of CHF2,500,000 (the “Loan”), of which CHF1,500,000 was
secured (the “CHF1,500,000 Secured Amount”) by certain of the shares of common
stock of Société owned by Erne, Hadorn and Rey (collectively, the
“Shareholders”);

B.                          On August 31, 2006, SES, Société and the
Shareholders entered into a share exchange agreement (the “Share Exchange
Agreement”), whereby SES agreed to purchase all 39,500 of the issued and
outstanding shares of common stock of Société, in exchange for the issuance of
48,286,817 shares of common stock of SES (the “SES Shares”) to the Shareholders
(the “Share Exchange”);

C.                          As a result of the Share Exchange and in connection
with the repayment of the Loan, Canton and the Shareholders have agreed to place
certain of the SES Shares issuable to them pursuant to the Share Exchange
Agreement in escrow;

D.                         The Shareholders and SES wish to appoint the Escrow
Agent to accept, hold and deliver, pursuant to the terms of this Agreement
10,000,000 SES Shares in the respective amounts as set out in Schedule A
attached hereto (the “Escrowed Shares”) in connection with the closing of the
Share Exchange Agreement; and

E.                          Pursuant to the Share Exchange Agreement, the
Shareholders have agreed that the Escrowed Shares, will be held by the Escrow
Agent and released only in accordance with this Agreement.

THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency
of which are hereby acknowledged), the parties covenant and agree as follows:

1.

INTERPRETATION

1.1

In this Agreement:

 

(a)

the headings have been inserted for convenience of reference only and in no way
define, limit, or enlarge the scope or meaning of the provisions of this
Agreement;

 

(b)

all references to any party, whether a party to this Agreement or not, will be
read with such changes in number and gender as the context or reference
requires; and

 

(c)

when the context hereof makes it possible, the word “person” includes in its
meaning any firm and any body corporate or politic.

2.

DEPOSIT INTO ESCROW

2.1                        The Shareholders will upon execution of this
Agreement and the closing of the Share Exchange Agreement, deliver the Escrowed
Shares to the Escrow Agent. The Escrow

 

 

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Agent will hold the Escrowed Shares in escrow subject to the terms and
conditions of this Agreement.

3.

ESCROW PROVISIONS

3.1                        The Shareholders and SES hereby direct the Escrow
Agent to retain the Escrowed Shares and not to cause anything to be done to
release the same from escrow except in accordance with this Agreement. The
Escrow Agent accepts its responsibilities hereunder and agrees to perform them
in accordance with the terms hereof.

3.2                        The Escrow Agent will hold the Escrowed Shares in
escrow and will, unless prohibited by an order of a court of competent
jurisdiction, deliver the Escrowed Shares:

 

(a)

upon repayment in full of the CHF1,500,000 Secured Amount to Canton by the
Shareholders:

 

(i)

if within two years of the closing of the Share Exchange Agreement, to the
escrow agent under the Long Term Escrow Agreement, dated September 1, 2006,
among the Shareholders, SES and the Escrow Agent, or

 

(ii)

if after two years of the closing of the Share Exchange Agreement, to the
respective Shareholders at the address set out in Schedule A, or such other
address as advised by the Shareholder in writing from time to time; or

 

(b)

upon default of the Loan, to Canton in full satisfaction of the Loan.

3.3                        The Escrow Agent is authorized by the Shareholders
and SES to make the deliveries required by Section 3.2 of this Agreement.

4.

ESCROW AGENT

4.1                        In exercising the rights, duties and obligations
prescribed or confirmed by this Agreement, the Escrow Agent will act honestly
and in good faith and will exercise that degree of care, diligence and skill
that a reasonably prudent person would exercise in comparable circumstances.

4.2                        The Shareholders and SES agree from time to time and
at all times hereafter well and truly to save, defend and keep harmless and
fully indemnify the Escrow Agent, its successors and assigns from and against
all loss, costs, charges, suits, demands, claims, damages and expenses which the
Escrow Agent, its successors or assigns may at any time or times hereafter bear,
sustain, suffer or be put unto for or by reason or on account of its acting
pursuant to this Agreement or anything in any manner relating thereto or by
reason of the Escrow Agent’s compliance in good faith with the terms hereof.

4.3                        In case proceedings should hereafter be taken in any
court respecting the Escrowed Shares, the Escrow Agent will not be obliged to
defend any such action or submit its rights to the court until it has been
indemnified by other good and sufficient security in addition to the indemnity
given in Clause 4.2 against its costs of such proceedings.

 

 

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4.4                        The Escrow Agent will have no responsibility in
respect of loss of the Escrowed Shares except the duty to exercise such care in
the safekeeping thereof as it would exercise if the Escrowed Shares belonged to
the Escrow Agent. The Escrow Agent may act on the advice of counsel but will not
be responsible for acting or failing to act on the advice of counsel.

4.5                        The Escrow Agent will not be bound in any way by any
contract between the other parties hereto whether or not it has notice thereof
or of its terms and conditions and the only duty, liability and responsibility
of the Escrow Agent will be to hold the Escrowed Shares as herein directed and
to pay and deliver the same to such persons and other such conditions as are
herein set forth. The Escrow Agent will not be required to pass upon the
sufficiency of any of the Escrowed Shares or to ascertain whether or not the
person or persons who have executed, signed or otherwise issued or authenticated
the said documents have authority to so execute, sign or authorize, issue or
authenticate the said documents or any of them, or that they are the same
persons named therein or otherwise to pass upon any requirement of such
instruments that may be essential for their validity, but it shall be sufficient
for all purposes under this Agreement insofar as the Escrow Agent is concerned
that the said documents are deposited with it as herein specified by the parties
executing this Agreement with the Escrow Agent.

4.6                        In the event that the Escrowed Shares are attached,
garnished or levied upon under any court order, or if the delivery of such
property is stayed or enjoined by any court order or if any court order,
judgment or decree is made or entered affecting such property or affecting any
act by the Escrow Agent, the Escrow Agent may, in its sole discretion, obey and
comply with all writs, orders, judgments or decrees so entered or issued,
whether with or without jurisdiction, notwithstanding any provision of this
Agreement to the contrary. If the Escrow Agent obeys and complies with any such
writs, orders, judgments or decrees, it will not be liable to any of the parties
hereto or to any other person, form or corporation by reason of such compliance,
notwithstanding that such writs, orders, judgments or decrees may be
subsequently reversed, modified, annulled, set aside or vacated.

4.7                        Except as herein otherwise provided, the Escrow Agent
is authorized and directed to disregard in its sole discretion any and all
notices and warnings which may be given to it by any of the parties hereto or by
any other person, firm, association or corporation. It will, however, at its
sole discretion, obey the order, judgment or decree of any court of competent
jurisdiction, and it is hereby authorized to comply with and obey such orders,
judgments or decrees and in case of such compliance, it shall not be liable by
reason thereof to any of the parties hereto or to any other person, firm,
association or corporation, even if thereafter any such order, judgment or
decree may be reversed, modified, annulled, set aside or vacated.

4.8                        If the Escrow Agent receives any valid court order
contrary to the instructions contained in this Agreement, the Escrow Agent may
continue to hold the Escrowed Shares until the lawful determination of the issue
between the parties hereto.

4.9                        If written notice of protest is made by any of the
Shareholders and/or SES to the Escrow Agent to any action contemplated by the
Escrow Agent under this Agreement, and such notice sets out reasons for such
protest, the Escrow Agent may at its sole discretion continue to hold the
Escrowed Shares until the right to the documents is legally determined by a
court of competent jurisdiction or otherwise.

 

 

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4.10                      The Escrow Agent may resign as Escrow Agent by giving
not less than five (5) days’ notice thereof to the Shareholders and SES. The
Shareholders and SES may terminate the Escrow Agent by giving not less than five
(5) days’ notice to the Escrow Agent. The resignation or termination of the
Escrow Agent will be effective and the Escrow Agent will cease to be bound by
this Agreement on the date that is five (5) days after the date of receipt of
the termination notice given hereunder or on such other date as the Escrow Agent
and the Shareholders and SES may agree upon. All indemnities granted to the
Escrow Agent herein will survive the termination of this Agreement or the
termination or resignation of the Escrow Agent. In the event of termination or
resignation of the Escrow Agent for any reason, the Escrow Agent shall, within
that five (5) days’ notice period deliver the Escrowed Shares to the new escrow
agent to be named by the Shareholders and SES.

4.11                      Notwithstanding anything herein to the contrary, the
Escrow Agent may act upon any written instructions given jointly by the
Shareholders and SES.

4.12                      Notwithstanding anything to the contrary contained
herein, in the event of any dispute arising between any of the Shareholders
and/or SES, this Agreement or any matters arising thereto, the Escrow Agent may
in its sole discretion deliver and interplead the Escrowed Shares into court and
such delivery and interpleading will be an effective discharge to the Escrow
Agent.

5.

FEES

5.1                        SES will pay all of the compensation of the Escrow
Agent and will reimburse the Escrow Agent for any and all reasonable expenses,
disbursements and advances made by the Escrow Agent in the performance of its
duties hereunder, including reasonable fees, expenses and disbursements incurred
by its counsel.

6.

GENERAL

6.1                        Except as herein otherwise provided, no subsequent
alteration, amendment, change, or addition to this Agreement will be binding
upon the parties hereto unless reduced to writing and signed by the parties.

6.2                        This Agreement will enure to the benefit of and be
binding upon the parties and their respective heirs, executors, administrators
and successors.

6.3                        The parties will execute and deliver all such further
documents, do or cause to be done all such further acts and things, and give all
such further assurances as may be necessary to give full effect to the
provisions and intent of this Agreement.

6.4                        This Agreement will be governed by and construed in
accordance with the law of the State of Delaware.

6.5                        Any notice required or permitted to be given under
this Agreement will be in writing and may be given by delivering, sending by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy, or sending by prepaid registered mail, the
notice to the following address:

 

 

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(a)

If to the Shareholders:

c/o Société d’Energie Solaire S.A.

Route de Saint-Julien 129

CH-1228 Plan-les-Ouates

Switzerland

 

Attention:

Jean-Christophe Hadorn

 

Telephone:

+41 22 884 14 84

 

 

Facsimile:

+41 22 884 14 80

 

With a copy (which will not constitute notice) to:

 

Etude d’avocats Poggia & Rudermann

Rue de Beaumont 11

1206 Geneve

Suisse

 

 

Attention:

Me Mauro Poggia

 

Telephone:

+41 22 703 58 58

 

 

Facsimile:

+41 22 703 58 57

 

 

(b)

If to SES:

Suite 1400 – 1500 West Georgia Street

Vancouver, British Columbia

Canada V6G 2Z6

 

Fax:

(604) 662-8974

 

(c)

If to Canton:

Etat de Geneve

Department du territoire

Service Cantonal de l’energie

Rue du Puit-Saint-Pierre

1211 Geneve 3

 

 

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(d)

If to the Escrow Agent:

Clark Wilson LLP

Barristers and Solicitors

800 – 885 West Georgia Street

Vancouver, British Columbia

Canada V6C 3H1

 

 

Attention:

Cam McTavish

 

 

Facsimile:

(604) 687-6314

(or to such other address as any party may specify by notice in writing to
another party). Any notice delivered or sent by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy on a business day will be deemed conclusively to have been
effectively given on the day the notice was delivered, or the electronic
communication was successfully transmitted, as the case may be. Any notice sent
by prepaid registered mail will be deemed conclusively to have been effectively
given on the third business day after posting; but if at the time of posting or
between the time of posting and the third business day thereafter there is a
strike, lockout, or other labour disturbance affecting postal service, then the
notice will not be effectively given until actually delivered.

6.6

Time is of the essence of this Agreement.

6.7                        It is understood and agreed by the parties to this
Agreement that the only duties and obligations of the Escrow Agent are those
specifically stated herein and no other.

6.8                        This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. This Agreement may be executed by
delivery of executed signature pages by fax and such fax execution will be
effective for all purposes.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of
the day and year first written above.

SES SOLAR INC.

 

 

Per:

/s/ John Veltheer                                  

 

Name: John Veltheer

 

 

Title:

President and Director

 

 

 

 

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EXECUTED by CHRISTIANE ERNE in the presence of:

/s/ signed                                                         
Signature
                                                                         
Print Name
                                                                         
Address
                                                                         

                                                                         
Occupation

)
)
)
)
)
)
)
)
)
)
)
)
)

/s/ Christiane Erne                                          
CHRISTIANE ERNE

 

 

EXECUTED by JEAN-CHRISTOPHE HADORN in the presence of:

/s/ signed                                                         
Signature
                                                                         
Print Name
                                                                         
Address
                                                                         

                                                                         
Occupation

)
)
)
)
)
)
)
)
)
)
)
)
)

/s/ Jean-Christophe Hadorn                            
JEAN-CHRISTOPHE HADORN

 

 

EXECUTED by CLAUDIA REY in the presence of:

/s/ signed                                                         
Signature
                                                                         
Print Name
                                                                         
Address
                                                                         

                                                                         
Occupation

)
)
)
)
)
)
)
)
)
)
)
)
)

/s/ Claudia Rey                                                 
CLAUDIA REY

 

 

 

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SERVICE CANTONAL DE L’ENERGIE

 

 

Per:

/s/ Olivier Ouzilou                                

 

Olivier Ouzilou

 

CLARK WILSON LLP

 

 

Per:

/s/ Virgil Hlus                                      

 

Partner

 

 

 

 

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SCHEDULE A

Name of Shareholder

Address

No. of Shares Deposited into Escrow

Christiane Erne

_________________________
_________________________
_________________________

 

Jean-Christophe Hadorn

_________________________
_________________________
_________________________

 

Claudia Rey

_________________________
_________________________
_________________________