Security Holders

                                    AGREEMENT





                                     between



                       Scandinavian Energy Finance Limited



                                       and



                                 Goran Ernstson







<PAGE>





                                      INDEX
<TABLE>
<CAPTION>
<S>                                                                                                 <C>


1.         Definitions.................................................................................2
2.         Scope of the Agreement......................................................................4
3.         The Company.................................................................................5
4.         Protective Covenants........................................................................6
5.         Option......................................................................................7
6.         Dealing in Shares...........................................................................8
7.         Indemnification.............................................................................9
8.         Compliance with this Agreement.............................................................11
9.         Term and termination.......................................................................11
10.        Invalidity.................................................................................13
11.        Waiver.....................................................................................13
12.        Assignment.................................................................................13
13.        Counterparts...............................................................................14
14.        No Partnership or Agency...................................................................14
15.        Applicable Law.............................................................................14
16.        Arbitration................................................................................14
17.        US Tax Election............................................................................14

</TABLE>

<PAGE>

                                    AGREEMENT


This Agreement is made this ___ day of March, 2002 between


1.         Scandinavian  Energy  Finance  Ltd, an Irish  company  with the
           address c/o Michael  Ryan, McCann Fitzgerald,  2 Harbourmaster Place,
           International Financial Service Centre, Dublin 1, Ireland ("SEFL");
           and

2.         Goran Ernstson, a Swedish citizen with personal code 530710-6210 and
           residing at Skoldungavagen 23 B, SE-131 46 Nacka, Sweden
           ("Ernstson").


WHEREAS, 95 % of the shares of the Gigantissimo 2321 AB to be renamed Narvarme
Acqusition III AB (the "Company") are now held by Ernstson as set out in
Schedule 1; and


WHEREAS, the Company owns all of the outstanding shares of Gigantissimo 2323 AB
(Swedco 2) and Gigantissimo 2324 AB (Swedco 1); and


WHEREAS, the Company has issued one convertible debenture loan which has been
subscribed for by SEFL and one convertible subordinated loan which has been
subscribed for by Lansforsakringar; and


WHEREAS, Ernstson has granted SEFL an option to acquire all of his shares in the
Company.


NOW, THEREFORE, the parties agree as follows.


1.         Definitions

1.1        Terms used

           a)     "Act" means the Swedish Companies Act (1975:1385);

           b)     the  "Agreement"  and  this  "Agreement"  shall  mean  the
                  agreement  between  the parties, being the subject hereof;

           c)     the "Articles of Association" shall mean the articles of
                  association of the Company as to be seen from the document
                  attached hereto (Schedule 2);

<PAGE>
           d)     the "Board" shall mean the board of directors of the Company;

           e)     "Business Day" means any day (other than a Saturday or Sunday)
                  on which clearing banks in the city of Stockholm are open for
                  the transaction of normal USD and SEK banking business;

           f)     "the Company" shall mean Gigantissimo 2321 AB, registered with
                  number 556614-6642 and whose registered office is at
                  Kanalvagen 15, Taby, Sweden;

           g)     the "Directors" shall mean the directors of the Company;

           h)     "Group"  means the Company and its direct and  indirect
                  subsidiaries  from time to time;

           i)     "Group Company" means the Company or any of its direct or
                   indirect subsidiaries;

           j)     "Lansforsakringar Agreement" means the Shareholders Agreement
                  to be entered into between Ernstson, SEFL and Lansforsakringar
                  regarding their shareholding in the Company;

           k)     "Option" shall mean the option granted by Ernstson to SEFL to
                  acquire his Shares;

           l)     a "Shareholder" shall mean any holder of Shares from time to
                  time;

           m)     the "Shares" shall mean all stocks, convertible bonds,
                  warrants, debentures, options to subscribe for new shares and
                  securities of any kind now or hereafter issued by the Company
                  including for the avoidance of doubt, any preference shares,
                  whether convertible or not, and carrying a right of
                  participation in the profit or assets of the company, in each
                  case including all allotments, offers, rights, bonuses
                  benefits and advantages whatsoever which accrue, are offered
                  or arise in respect thereof, and a reference to the Shares of
                  a party hereto shall mean all Shares held by that party at any
                  time;

              n) "Transferee" means any person to whom Shares or the Option, as
                  the case may be, have been transferred (except for
                  Lantbrukskredit or its transferees);

<PAGE>

1.2        Schedules

           The Schedules form part of this Agreement and shall have the same
           force and effect as if set out in the body of this Agreement and
           references to this Agreement include the Schedules.

1.3        Clause Headings

           Clause headings are for convenience of reference only and shall not
           affect the construction of this Agreement.

1.4        Interpretation

           In this Agreement, unless the contrary intention appears, a reference
           to

           a)     a clause  or  schedule  shall  be  construed  as a  reference
                  to a clause  of this Agreement or a schedule thereto,
                  respectively;

           b)     a provision of law is a reference to that law as amended or
                  re-enacted;

           c)     a person includes its successors and assigns;

           d)     a "subsidiary" shall be construed in accordance with the Act;

           e)     a document in the "agreed  form" is a  reference  to a
                  document in a form  approved and for the purposes of
                  identification signed by or on behalf of the parties; and

           f)     "persons" includes a reference to any natural or legal person,
                  body corporate, unincorporated association, partnership or
                  governmental entity or authority.

2.         Scope of the Agreement

2.1        Purpose

           The purpose of this Agreement is to lay down the rights and
           obligations by and among SEFL and Ernstson in respect of certain
           matters relating to his ownership of Shares and the Option.

2.2        Shareholdings

<PAGE>

           The shareholding in the Company as of the date hereof will be in
           accordance with Schedule 1. In the event that Ernstson shall marry,
           he shall use all reasonable efforts to procure that the Shares held
           by him shall be the personal property (Sw: enskild egendom) of
           Ernstson.


2.3        Priority of Agreement

           As between the parties hereto, in case of any inconsistency between
           this Agreement and the Articles of Association, this Agreement shall
           prevail unless specifically stated herein. For the avoidance of
           doubt, the parties hereto agree that in case of any inconsistency
           between this Agreement and the Lansforsakringar Agreement, this
           Agreement shall have priority with respect to the relations between
           the parties hereto.


2.4        Obligation to Comply

           The parties hereto shall comply at all times with the provisions of
           this Agreement and each party shall procure compliance with the terms
           hereof in respect of any agent, attorney or other representative of
           such party acting in shareholders' meetings, board meetings or any
           other context where the provisions of this Agreement come into
           operation and shall instruct such representative accordingly.

3.         The Company

           Ernstson shall use all reasonable endeavours to cause the Company
           and/or the Board to pass all resolutions necessary and to take all
           actions necessary so as to ensure compliance with the terms and
           provisions of this Agreement.

3.1        Issued Share Capital
           The Company shall on a fully diluted base have an issued share
           capital of SEK 125.000 divided into 125.000 shares with a par value
           of SEK 1.

3.2           Registered Office
           The registered office of the Company shall be in Taby.

3.3        Articles of Association

           The Articles of Association shall be in accordance with Schedule 2.
<PAGE>

4.          Protective Covenants

4.1        In order to protect the rights of SEFL under the Option, Ernstson
           agrees that he shall not, without the prior written consent of SEFL,
           cause any Group Company to or permit any Group Company to:

        a)        replace, amend or alter the articles of association applicable
                  to such company;

        b)        issue any shares, enter into or grant any options to subscribe
                  for shares or issue any securities convertible into shares or
                  entering into any agreement for the same other than the
                  convertible loans issued to ICO and Lansforsakringar;

        c)        establish any bonus, profit sharing, share option or other
                  incentive scheme for any director or employee of the Company
                  or any member of the Group (as appropriate);

        d)        sell, transfer or dispose their assets outside the ordinary
                  course of business;

        e)        effect a merger with a third party;

        f)        reduce the capital by redemption of shares or any equivalent
                  procedure;

        g)        distribute profit by dividends or any other form of
                  shareholder benefit;

        h)        voluntarily liquidate or wind-up (except, for the avoidance of
                  doubt, any actions and measures taken in connection with
                  mandatory liquidation provisions of the Act or voluntary
                  liquidation of the Company pursuant to the provisions of
                  Section 5.1.4);

        i)        change the place of registered office;

        j)        enter into any agreement with a director, employee or
                  shareholder of a Group Company (other than another Group
                  Company) or an Affiliate of such Persons or effect any
                  transaction with such Persons;

        k)        appropriate  fees  for  the  Directors  or  vary  the  service
                  agreements  of  any Directors; or

        l)        agree or commit to do any of the following.

<PAGE>

4.2        The provisions of Section 4.1 shall not prevent (i) any
           actions or measures by Ernstson or any Group Company necessary to
           comply with the terms and conditions of Section 5 of the
           Lansforsakringar Agreement or (ii) any action taken by Ernstson to
           cause the Company to pay Ernstson such amount as is necessary to make
           Ernstson whole (including settlement costs and reasonable legal,
           accounting and other expenses for investigation or defence) on an
           after tax basis for any wealth tax payable by him in connection with
           his ownership of Shares, provided that Ernstson advises
           Lantbrukskredit, SEFL and Lansforsakringar of any such tax assessed
           and takes any reasonable lawful action jointly suggested by
           Lantbrukskredit, SEFC and Lansforsakringar to reduce such tax
           liability before paying such tax.

4.3        It is agreed that the provisions of Section 7.3 hereof will apply to
           any matter which SEFL grants its consent to under this Section 4.1 or
           under any financing agreement to which SEFL and any Group Company is
           a party.

5.     Option

5.1       Transfer of Shares

5.1.1      Ernstson shall not be entitled to transfer any of the Shares owned
           and held by him, except pursuant to the provisions of this Section 5,
           as long as the Option is in force.

5.1.2      SEFL  hereby agrees and undertakes with Ernstson to acquire, and
           accept sale and transfer from, or to procure the acquisition, and the
           acceptance of the sale and transfer from, Ernstson of all the Shares
           owned by Ernstson, upon the occurrence of any of the following
           events:
(i)                 if Ernstson's employment in the Company should cease,
                    irrespective of the reason therefor, provided, however, that
                    sale and transfer of the Shares shall in such case take
                    place ninety (90) days after written notice pursuant to
                    Section 5.1.3 below;

(ii)                if SEFL or its affiliates or if any  Transferee or its
                    affiliates  should commit a material breach of any agreement
                    to which  Ernstson  or any  Group  Company  is a party
                   (provided  that,  in the  case  of a  breach  of an agreement
                    to  which a Group Company,  but  not  Ernstson, is a  party,
                    such  breach,  if not  cured,  would reasonably  be expected

<PAGE>
                    to impair the solvency of the Company  under Swedish law)
                    which is not cured  within  thirty  (30) days after  written
                    notice  pursuant to Section 5.1.3 below, provided,  however,
                    that the sale and transfer of the Shares shall in such case
                    take place fifty (50) days after such written notice; and

(iii)               if Ernstson gives written notice of his wish to sell and
                    transfer the Shares, irrespective of the reason therefor,
                    provided, however, that the sale and transfer of the Shares
                    shall in such case take place ninety (90) days after written
                    notice pursuant to Section 5.1.3 below.

5.1.3      To exercise the right to sell and to request the obligation
           to acquire the Shares held by him according to Section 5.1.2 above,
           Ernstson shall give SEFL a written notice, specifying the relevant
           triggering event. The purchase price for the Shares under Section
           5.1.2 above and 5.1.4 below shall be SEK one hundred thousand
           (100.000).

5.1.4      In the event SEFL should fail to acquire or procure the acquisition
           of the Shares following notice pursuant to Section 5.1.3 for any or
           the triggering events set forth in Section 5.1.2 (i)-(iii) within the
           time-frames set forth therein, despite the obligation to do so
           according to Section 5.1.2, then SEFL shall have been deemed to have
           automatically acquired the Shares, subject to the Option.

6.         Dealing in Shares

6.1        Written Consent

           Other than in accordance with the provisions of this Agreement,
           Ernstson shall not, except with the prior written consent of SEFL;

6.1.1      pledge,  mortgage,  charge or  otherwise  encumber any Share or any
           interest in any Share held by Ernstson;

6.1.2     grant an option over any Share or any interest in any Share held by
          Ernstson;

6.1.3     enter into any agreement in respect of the votes attached to any Share
           held by Ernstson.


<PAGE>

6.2        Letter of Undertaking

           Except for transfers permitted by Section 5.1.4 above, Ernstson shall
           not, except with the prior written consent of SEFL, effect any
           transfer without the Transferee accepting to be bound by the terms of
           this Agreement by signing a letter of undertaking as if the
           Transferee had been a Shareholder at all times for the purposes of
           this Agreement and had assumed the benefit of the rights and the
           burden of the obligation(s) of a Shareholder under this Agreement.
           Such undertaking shall be delivered to the Company at its registered
           office and a certified copy shall be delivered to SEFL.

6.3        Other Dealings

           Save as specified in this Agreement, if at any time a Shareholder
           desires to effect a transfer otherwise than in accordance with this
           Clause 6 the Shareholders shall procure that no such transfer shall
           take place unless and until the provisions of this Clause 6 have been
           complied with.

6.4         Announcement, Communication or Circular

           Ernstson shall not without SEFL's written consent, make or send any
           announcement, communication or circular relating to the subject
           matter of this Agreement such consent not to be unreasonably
           withheld, provided that this shall not apply to an announcement,
           communication or circular required by law or by any governmental
           authority, in which event Ernstson shall, where practicable, first
           consult with SEFL as to the content of such announcement.


7.                  Indemnification

7.1        SEFL  shall indemnify and hold Ernstson harmless from and against all
           direct or indirect claims, losses, deficits, damages, costs,
           liabilities, tax and expenses (including settlement costs and
           reasonable legal, accounting and other expenses for investigating or
           defending any actions or threatened actions) ("Losses") incurred by
           Ernstson which are resulting from, arising out of or relating to:


         (i)        any action or omission by SEFL or its affiliates or by any
                    Transferee or its affiliates constituting negligence or
                    intentional misconduct or breach or non-fulfilment of
                    agreement to which Ernstson or any Group Company is a party
                    (provided that this clause shall only apply to Losses
                    suffered by Ernstson in his personal capacity and not as a
<PAGE>

                    result of a reduction of the value of the shares in the
                    Company);

        (ii)        any action or omission by Ernstson  which has been directed
                    by SEFL or its  affiliates or by any Transferee or its
                    affiliates;

        (iii)       any obligations of Ernstson to purchase Lansforsakringar's
                    Shares under Sections 6.5.3 and 6.7.2 and 6.7.4 (to the
                    extent a breach of contract has been expressly consented to
                    by SEFL) of the Lansforsakringar Agreement, provided that
                    Ernstson transfers such Shares, or causes such Shares to be
                    transferred, to SEFL or its designee, for no additional
                    consideration;

        (iv)        any such claim described in Section 7.3 below; and

         (v)        any such tax election described in Section 17 below.

7.2        The liability of SEFL under Section 7.1 above shall not
           apply to the extent claims, losses, deficits, damages, costs,
           liabilities and expenses have been caused by actions, measures or
           omissions taken by Ernstson after the closing date which actions,
           measures or omissions constitute gross negligence or fraud or other
           criminal acts or breach of any agreement to which Ernstson is a party
           or breach of any agreement to which a Group Company is a party
           committed by a Group Company (if such breach is knowingly caused by
           the acts of Ernstson), except for breaches which are the result of
           Ernstson's actions or measures pursuant to the provisions of Sections
           4.2 or 5.1.4 above.

7.3       SEFL  undertakes not to, and to cause its affiliates and any
          Transferee or its affiliates, as well as holders of securities in
          SEFL, from time to time not to, make or submit any claim against
          Ernstson regarding any matter resulting from, arising out of or
          relating to this Agreement or any other agreement to which Ernstson or
          any Group Company is a party, provided that this restriction shall not
          prevent claims against Ernstson under Swedish law based on actions,
          measures or omissions by Ernstson after the closing date which
          constitute gross negligence or fraud or other criminal acts or a
          breach of an agreement to which Ernstson is a party or breach of any
          agreement to which a Group Company is a party committed by a Group
          Company (if such breach is knowingly caused by the acts of Ernstson),
          except for breaches which are the result of Ernstson's actions or
          measures pursuant to the provisions of Sections 4.2 or 5.1.4 above.

<PAGE>

7.4        Ernstson shall not settle any claim by a third party which may be
           subject to indemnification by SEFL pursuant to this Agreement,
           without the consent of SEFL, which shall not be unreasonably withheld
           or delayed.

8.         Compliance with this Agreement

           To the extent not prohibited by Swedish law, Ernstson undertakes to
           SEFL that he shall take all practicable steps including, without
           limitation, the exercise of votes it directly or indirectly controls
           at meetings of the Board and general meetings of the Company and any
           Group Company, as the case may be, to ensure that the terms of this
           Agreement are complied with and to procure that the Board and the
           Company and any Group Company, as the case may be, complies with its
           obligations and that it shall do all such other acts and things as
           may be necessary or desirable to implement this Agreement.

9.         Term and termination

9.1        Entry into Force

           This Agreement shall become effective on 5 March 2002.

9.2        Termination

           This Agreement shall remain in force for as long as the Option is in
           force or as long as SEFL is lending money to any Group Company
           whichever later, provided, however, that any termination of the
           Agreement pursuant to this Section 9.2 shall not apply to Sections
           5.1.2-5.1.4 or Section 7.

9.3        Addresses etc

           Any notice or other communication pursuant to, or in connection with,
           this Agreement shall be in writing and delivered personally, or sent
           by first class pre-paid recorded delivery post (air mail if
           overseas), to the party due to receive such notice at its registered
           office from time to time (or to such other address as may from time
           to time have been notified in writing to the other party in
           accordance with this Clause) or by sending it by fax to the fax
           number, if any, of the party concerned set out in this Clause, or to
           such other fax number as may from time to time have been notified in
           writing to the other party in accordance with this Clause) (subject
<PAGE>

           to the original notice or communication being sent by post on the
           same day in the manner specified above):-

  9.4      The  addresses  of each  Party for all  notices  under or in
           connection  with this Agreement are:
           a) in the case of SEFL;

           c/o Michael Ryan
           Mc Cann Fitzgerald
           2 Harbourmaster Place
           International Financial Service Centre
           Dublin 1, Ireland
           353 1 824 0010

           With a copy to:

           President
           US Energy Systems Inc.
           One Lexington
           Fourth Floor
           White Plains N.Y. 10601
           Fax: 914 993 5190

           With a copy to:

           EIC Partners AG
           Generale-Wille Strasse 59 P.O. Box 35
           CH-8706 Feldmeilen Switzerland
           Fax: 41 1318 3411 before 15th April 2002

                  41 4384 410 01 after 15th  April 2002
           b) in the case of Goran Erstson;

           Skoldungavagen 23 B, S-131 46 Nacka, Sweden

           or such other as a Party may notify to the other Party by no less
           than five (5) business day's notice.

           All notices and communication between the Parties shall be in English
           unless otherwise agreed.

<PAGE>

9.5       Communication Served

           Subject to Clause  10.3,  any notice or other  communication  shall
           be deemed to have been served:-

           a)       if delivered personally, when left at the address referred
                    to in Clause 9.4;

           b)       if sent by overnight courier, the day after sending it;

           c)       if a notice is given or deemed given at a time or on a date
                    which is not a Business Day, it shall be deemed to have been
                    given on the next Business Day.

10.        Invalidity

           If any provision of this Agreement is held to be unenforceable or
           illegal, in whole or in part, such provision or part shall to that
           extent be deemed not to form part of this Agreement but the
           enforceability of the remainder of this Agreement shall remain
           unaffected.


11.        Waiver

           The failure to exercise or delay in exercising any right or remedy
           under this Agreement shall not constitute a waiver of the right or
           remedy or a waiver of any other rights or remedies and no single or
           partial exercise of any right or remedy under this Agreement shall
           prevent any further exercise of the right or remedy or the exercise
           of any other right or remedy.


           The parties' rights and remedies contained in this Agreement are in
           addition to, and not exclusive of, any other rights or remedies
           available at law.


12.         Assignment

           This Agreement is personal to the parties and neither the Agreement
           nor any of the benefits arising under them may be assigned without
           the prior written consent of the other party and neither party shall
           purport to assign or transfer the same.

<PAGE>

13.         Counterparts

           This Agreement may be executed in any number of counterparts and by
           each of the parties on separate counterparts each of which when
           executed and delivered shall be deemed to be an original, but all the
           counterparts together shall constitute one and the same agreement.


14.        No Partnership or Agency

           Nothing in this Agreement (or any of the arrangements contemplated
           hereby) shall be deemed to constitute a partnership between the
           parties nor, save as may be expressly set out herein, constitute any
           party the agent of any other party for any purpose.


           In addition, unless otherwise agreed in writing between the parties,
           none of them shall enter into contracts with third parties as agent
           for any member of the Group or for the other party nor shall any
           party describe itself as agent as aforesaid or in any way hold itself
           out as being an agent as aforesaid.


15.         Applicable Law

           This Agreement shall be governed by and construed in accordance with
           the laws of Sweden.

16.        Arbitration

           Disputes related to the Agreement shall be finally settled by
           arbitration under the rules of the Arbitration Institute of the
           Stockholm Chamber of Commerce.

           The proceedings shall be held in English.

17.        US Tax Election

           At the request of SEFL, the Company and every Shareholder shall
           execute a "check the box election" under United States tax laws in
           the form attached as Schedule 1.



                                ________________
<PAGE>


           In witness whereof the parties hereto have signed this Agreement on
           the date first above written:



                                                        /s/ Goran Ernston
           __________________________                    -----------------
           Scandinavian Energy Finance                      Goran Ernstson
           Limited



           PRESENT when the Common Seal of SCANDINAVIAN ENERGY FINANCE LIMITED
           was affixed hereto:




           ___________________________
           Director


           ___________________________
           Director/Secretary