

                         [LETTERHEAD OF MICHAEL F. ZINN]


                                 June 17, 1999


Special Committee of the
  Board of Directors
Besicorp, Ltd.
1151 Flatbush Road
Kingston, New York 12401

Dear Committee Members:

      The following are the principal terms of a proposal (the "Offer") pursuant
to which Besicorp Acquisition Corp. ("Offeror") intends to acquire the business
and assets of Besicorp, Ltd. (the "Acquisition Transaction" and the "Company",
respectively). Besicorp Acquisition Corp. will be a special purpose entity to be
formed for the purpose of engaging in the Acquisition Transaction and will be
controlled by Michael Zinn, currently the Chairman of the Board, President and
Chief Executive Officer of the Company.

1. Certain Factors Influencing Offeror

The Offer is compelled by my conclusion that the Company will be unable to
continue operations, and that its prospects will be extinguished, without a
significant reorganization. Among those factors are the following:

      (a) The Company's current businesses have a history of operating losses,
and it is anticipated that the Company will continue to experience operating
losses in the indeterminate future in pursuit of future opportunities for
growth.

      (b) The Company's cash reserves (generated through a reorganization of its
former owner (the "Spin-off") and through certain non-recurring events) are not
sufficient to fund ongoing operations after November 30, 1999. The Company's
auditors have expressed doubt as to the ability the Company to continue as a
going concern without an infusion of additional capital. Attempts to reduce
operating expenses to preserve cash (other than by reducing costs through a
going private type transaction) will, in Offeror's estimation, impair the
ability of the Company to maintain operations at a viable level.

<PAGE>

Board of Directors
Besicorp, Ltd.
June 17, 1999
Page 2

(c) The Company's access to the capital markets is, accordingly, severally
limited. I have stated before and I reiterate here, I will not agree to any
transaction that would result in a dilution of my equity position. Accordingly,
the opportunity for the Company to attract individual or venture capital
investors is similarly limited. I will not guarantee debt of the Company, and
without a guarantee its ability to borrow is extremely unlikely.

(d) The cost of complying with the securities laws is substantial, but the
Company does not benefit from that compliance commensurate to the costs in terms
of access to the equity capital markets. In addition, the Company operates in a
hostile litigation environment, which as resulted, and may continue to result,
in significant expense and diversion of management attention.

(e) The Company has undertaken indemnity obligations in the Spin-off which are
not quantified or limited. Payment of those indemnity obligations will adversely
impact the Company's financial condition. The existence of those indemnity
obligations creates substantial uncertainties and will, in any event, impair the
ability of the Company to obtain future financing.

(f) I, as well as other members of senior management, have expressed
unwillingness to continue in the employ of the Company under current conditions.

2. The Offer

(a) The Offeror will acquire the business and assets of the Company, subject to
all its liabilities. The Offeror currently intends to effect that acquisition by
its merger (or the merger of an affiliate) with the Company, or such other
transaction which effectively accomplishes its purpose ("Acquisition
Transaction").

(b) The consideration for the Acquisition Transaction is $6.2 million, payable
in cash ("Cash Consideration"). Upon the consummation of the Acquisition
Transaction, each share of the Company's common stock outstanding immediately
prior to the Acquisition Transaction will be converted into the right to receive
$45.46 in cash.

(c) In addition to the Cash Consideration, each share of the Company's common
stock outstanding immediately prior to the Acquisition Transaction will receive
the right to participate, pro rata, in the funds released from the escrow
established by the Company, and others, in the Spin-off.

<PAGE>

Board of Directors
Besicorp, Ltd.
June 17, 1999
Page 3

3. The Company Obligations

The Company, at its sole cost and expense, will comply with the requirements of
the laws, rules and regulations governing the Acquisition Transaction, including
the Securities Exchange Act of 1934 (the "Securities Act") and will prepare and
distribute such documents and information as is required by the Securities Act,
subject to review by the counsel to the Offeror.

4. Conditions To The Offer

The consummation of the transactions contemplated in this Letter are subject to
the following conditions:

(a) The execution of a definitive acquisition agreement ("Acquisition
Agreement") on or before July [ ], 1999, acceptable to counsel to the Offeror
and containing representations and warranties as to:

(i) the due authorization and execution of Acquisition Agreement and the
transactions therein contemplated; and

(ii) compliance with the Securities Act and any other law, rule or regulation
governing the Acquisition Transaction; and

(iii) the absence of any litigation, or threat of litigation, which would
adversely effect the Acquisition Transaction or the Offeror.

(b) The closing of the Acquisition Transaction by September 30, 1999.

5. Third Party Dealing

(a) The Company may, until the date it executes an Acquisition Agreement;

(i) entertain and take part in any discussions, negotiations or arrangements for
or anticipating the sale of all or any part of the Company's business or assets;
and

(ii) make available information concerning the Company, its business and assets.

(b) The Company may, until a date 10 days prior to the date of the closing of
the Acquisition Transaction, withdraw its acceptance of the offer contained in
this letter or in an the Acquisition Agreement if, in the opinion its investment
advisor, it receives a higher and better offer ("Competing Offer") for all or a
portion of its business or assets than is contained in this letter or in an
Acquisition Agreement, from an entity which is

<PAGE>

Board of Directors
Besicorp, Ltd.
June 17, 1999
Page 4

ready and able to complete a transaction contained in such offer and the
consummation of such transaction is likely. In the event such a Competing Offer
is received, Offeror shall have the right of first refusal to match the
Competing Offer.

This letter shall be constructed and governed in accordance with the laws of the
State of New York.

Please confirm your agreement to and acceptance of the terms and conditions set
out in this letter by signing where indicated and returning the enclosed copy.
It is understood that acceptance of the offer is contingent upon the approval
and ratification of the full board of directors of the Company.


                                  Very truly yours,


                                  /s/ Michael F. Zinn
                                  ------------------------------
                                  Michael F. Zinn

ACCEPTED AND AGREED:

BESICORP, LTD.

By:
   ------------------------------------
   Melanie Norden
   Chairperson of the Special Committee

