Escrow Disbursement Letter under Escrow Agreement among USE, CES, AJG Financial, and Others

Summary

This letter instructs the escrow agent, Tannenbaum Helpern Syracuse & Hirschtritt LLP, to release funds and securities held under an Escrow Agreement among AJG Financial Services (as agent for major shareholders), U.S. Energy Systems, Inc., USE Acquisition Corp., Cinergy Energy Solutions, Inc., US Energy Biogas Corp., and others. With all disputes resolved and the release date reached, the letter details how the escrowed cash and securities should be distributed to the specified parties and accounts. The Major Shareholder Agent will further distribute assets to the shareholders and major shareholders.

EX-10.82 5 d59235_ex10-82.txt ESCROW LETTER Exhibit 10.82 October 16,2003 Tannenbaum Helpern Syracuse & Hirschtritt 900 Third Avenue New York, New York 10022 Attn: Stephen Rosenberg Re: Escrow Agreement, as amended (the "Escrow Agreement"), by and among Stephen Rosenberg, AJG Financial Services, through its Vice-President, General Counsel as agent (the "Major Shareholder Agent") for the Major Shareholders, Finova Mezzanine Capital Corp., AJG Financial Services, Inc., Environmental Opportunities Fund (by itself and as successor to Environmental Opportunities Fund Cayman), Frederic Rose M&R Associates, Martin F. Laughlin, Richard C. Augustine and Michael J. Carolan (each a "Major Shareholder"), U.S. Energy Systems, Inc., a Delaware corporation ("USE") and USE Acquisition Corp., a Delaware corporation (the "Sub" and together with USE, the USE Parties"), Cinergy Energy Solutions, Inc., a Delaware corporation ("CES") and together with the USE Parties, the "Beneficiaries") and Tannenbaum Helpern Syracuse and Hirschtritt LLP (the "Escrow Agent"). Gentlemen: Pursuant to the Escrow Agreement, the Escrow Agent is holding the Working Capital Escrow Fund and the Indemnification Escrow Fund. All capitalized terms used herein and not defined herein, shall have the meaning set forth in the Escrow Agreement. It is our understanding that the Release Date has occurred and that all disputed amounts have been settled. Thus, there is no Disputed Amount. Accordingly, pursuant to Escrow Agreement, the Major Shareholder Agent hereby gives notice to the Escrow Agent and the Beneficiaries that the Escrow Agent should disburse all the amounts in the Working Capital Escrow Fund and the Indemnification Escrow Fund as follows: 1. Disburse $1,100,000 from the Working Capital Escrow Fund to US Energy Biogas Corp. 2. Transfer to USE from the Working Capital Escrow Fund 41,463 shares of Parent Common Stock and 2,667 shares of Parent Series C Preferred Stock. 3. Transfer to USE from the Indemnification Escrow Fund 18,350 shares of Parent Common Stock. 4. Disburse and/or transfer to the Major Shareholder Agent for the benefit of the Shareholders all of the remaining assets in the Working Capital Escrow. The Major Shareholder Agent will disburse the assets to the Shareholders. 5. Disburse and/or transfer to the Major Shareholder Agent for the benefit of the Major Shareholders all of the remaining assets in the Indemnification Escrow Fund. The Major Shareholder Agent will disburse the assets to the Major Shareholders. For any cash mounts to be transferred to US Energy Biogas Corp., please wire the funds to the following account: Fleet National Bank 777 Main Street Hartford CT 06115 Bank Account Name: US Energy Biogas Corporation Account # 6545-8499 ABA # 0119-00571 For any Securities to be delivered to USE, please arrange for such securities to be delivered to: US Energy Systems, Inc. Attention: Allen J. Rothman One North Lexington Avenue Fourth Floor White Plains, NY 10601 For any cash amounts to be transferred to the Major Shareholder Agent, please wire the funds to the following account: Harris Trust and Savings Bank Chicago, IL ABA Number 071000288 Account Name: AJG Financial Services, Inc Account Number: 160-458-6 For any securities to be delivered to the Major Shareholder Agent, please arrange for such securities to be delivered to: AJG Financial Services, Inc. The Gallagher Centre Two Pierce Place Itasca, IL 60143-4131 Attn: Kerry S. Abbott, Asst General Counsel After receipt of the funds and securities, the Major Shareholder Agent shall distribute the funds and cause the securities to be delivered to the Shareholders and the Major Shareholders. AJG FINANCIAL SERVICES, INC., as Major Shareholder Agent By: ________________________________ John C. Rosengren, Vice President And General Counsel CINERGY ENERGY SOLUTIONS, INC. By: ________________________________ Title: _____________________________ U.S. ENERGY SYSTEMS, INC. By: /s/ Goran Mornhed -------------------------------- Goran Mornhed, CEO US ENERGY BIOGAS CORP By: /s/ Goran Mornhed -------------------------------- Goran Mornhed, Chairman For any securities to be delivered to the Major Shareholder Agent, please arrange for such securities to be delivered to: AJG Financial Services, Inc. The Gallagher Centre Two Pierce Place Itasca, IL 60143-4131 Attn: Kerry S. Abbott, Asst General Counsel After receipt of the funds and securities, the Major Shareholder Agent shall distribute the funds and cause the securities to be delivered to the Shareholders and the Major Shareholders. AJG FINANCIAL SERVICES, INC., as Major Shareholder Agent By: ________________________________ John C. Rosengren, Vice President And General Counsel CINERGY ENERGY SOLUTIONS, INC. By: /s/ Donald R. Snider -------------------------------- Title: President U.S. ENERGY SYSTEMS, INC. By: ________________________________ Goran Mornhed, CEO US ENERGY BIOGAS CORP By: ________________________________ Goran Mornhed, Chairman