AMENDMENT NO. 1
TO AGREEMENT AND PLAN OF
REORGANIZATION AND MERGER
BY AND AMONG U.S. ENERGY SYSTEMS, INC.,
USE ACQUISITION CORP. AND
ZAHREN ALTERNATIVE POWER CORPORATION
This Amendment No. 1 to Agreement and Plan of Reorganization
and Merger (the "Amendment") is made as of the __ day of December, 2000 by and
among U.S. Energy Systems, Inc. ("Parent"), USE Acquisition Corp.("Merger Sub"),
and Zahren Alternative Power Corporation (the "Company"). Unless indicated
otherwise, capitalized terms shall have the same meanings herein as they have in
the Merger Agreement (as defined below).
W I T N E S S E T H
WHEREAS, Parent, Merger Sub and the Company previously entered
into that certain Agreement and Plan of Reorganization and Merger dated as of
November 28, 2000 (the "Merger Agreement"); and
WHEREAS, the Parent, Merger Sub and the Company now wish to
amend the Agreement.
NOW, THEREFORE, in consideration of $10.00 and other
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. The last unlettered paragraph of Section 8.01 of the Merger
Agreement is hereby amended by deleting the existing paragraph in its entirety
and inserting in its place the following paragraph:
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This Agreement will be terminated and be void and of no effect
in the event Hancock does not consent in writing on or before 5:00
p.m., Eastern Standard time on December 19, 2000, to the Company's
entering into the Merger Agreement and the Exhibits hereto to which the
Company is a party and which are to be entered into as of the date
hereof; provided, however, that the terms of the consent are subject to
the prior approval of Parent and Merger Sub.
2. Except as amended hereby, the Merger Agreement is as hereby
ratified and confirmed and, as so amended, remains in full force and effect on
the date hereof.
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be executed as of the date first written above.
U.S. ENERGY SYSTEMS, INC.
By: /s/ Goran Mornhed
--------------------------------
Name: Goran Mornhed
Title: President and
Chief Operating Officer
USE ACQUISITION CORP.
By: /s/ Goran Mornhed
---------------------------------
Name: Goran Mornhed
Title: President
ZAHREN ALTERNATIVE POWER CORPORATION
By: /s/ Bernard J. Zahren
----------------------------------
Name: Bernard J. Zahren
Title: President
